HM Revenue and Customs powers

Deterrents and safeguards: security for payment of PAYE
Offshore tax evasion
Modernisation and compliance checks

Deterrents and safeguards: security for payment of PAYE

HM Revenue & Customs are to be given powers to require a financial security from employers where amounts due under PAYE or NICs are considered to be "seriously at risk." Furthermore it is HM Revenue & Customs who will have the power to determine the amount of the security based on their view of the potential tax liability.

These measures are intended to be applied to those employers with a history of serious non-compliance in terms of payment. The safeguard mirrors the current powers with regard to VAT.

These measures will introduce a criminal offence in the event of failure to provide a security which is punishable with a fine of up to £5,000.

These measures are expected to be applied as from 6 April 2011.

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Offshore tax evasion

Increased penalties are expected to apply from 1 April 2011 for individuals and businesses with financial interests outside the UK who are found to have failed in their obligations to declare the full extent of their [offshore] income tax and capital gains tax liabilities. These liabilities will be tax-geared. Where the non-compliance arises in a jurisdiction which has agreed to exchange information with the UK, but does not automatically share that information, the penalty percentages will be 1.5 times those laid out in the penalties legislation, and where the jurisdiction has no agreement to share information with the UK the penalty will be twice the rate laid down in the existing legislation.

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Modernisation and compliance checks

With effect from 1 April 2012 there are increased requirements allied to the HM Revenue & Customs compliance framework. These measures will update the compliance checking framework for excise duties, including:

  • Modernising information and inspection powers; and
  • Aligning the record keeping rules and the time limits for assessments and claims with changes made to other taxes and duties.

Current law and proposed revisions

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