More funding for HMRC? Will this help?

by | Nov 22, 2023 | Tax

The Chancellor announced that an additional £163m of funding is being provided to HMRC so that it can improve its ability to manage tax debts and continue tackling the ‘Tax Gap’. The investment is aimed at allowing HMRC to increase its debt collection activity, distinguishing between and pursuing those with tax debts who can afford to pay but choose not to, from those who are temporarily unable to pay and need support. HMRC will also continue to reduce opportunities for tax fraud in the construction industry and take strong action against promoters of tax avoidance. Whilst increasing tax revenues that will contribute to funding public services is of course good news, from our experience, what HMRC could actually do with is funding for additional staff / for improving and managing the productivity of its existing staff.

From January 2024, the government will implement a measure that requires certain digital platforms to report to HMRC information about the income of sellers of goods and services on their platform in line with rules developed at the OECD. This is aimed at individuals currently failing to declare incomes generated through these platforms but no doubt also aimed at increasing the levels of VAT and income tax revenue.

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