Taxman recoups £301.8m in unpaid tax
Private client law firm Collyer Bristow has estimated that the British taxman snared £301.8m in unpaid property tax during the last year. This has been called an aggressive clampdown on those who actively avoid paying stamp duty.
HMRC’s new Counter Avoidance Directorate collected the monies during the last twelve months as part of an increased no nonsense policy on Stamp Duty and Land Tax (SDLT) avoidance.
Success
The firm said that this data was provided to them by HMRC and indicates that the scheme is proving a success. The Counter Avoidance Directorate was set up in April 2014, with the intention of bringing together HMRC’s work on tax avoidance and policy.
James Badcock, partner at Collyer Bristow, noted, ‘the Government’s aggressive clamp down on SDLT avoidance schemes over the last few years is now bearing fruit. The high returns from compliance investigations mean that this area is likely to remain under the spotlight for some time to come.’[1]
He went on to point out that property values have soared over recent years, particularly in London and the South East. As a result, many taxpayers have seen a more substantial SDLT bill.
Taxman recoups £301.8m in unpaid tax
‘Avoidance schemes were being used to reduce SDLT on what for London are relatively modest properties in the £1m region as well as very high value properties. As well as the Government closing down schemes with legislation, HMRC has tackled previous planning through the disclosure regime, better resourced investigations and litigation,’ Badcock continued.[1]
Advice
Mr Badcock also observed that in many cases, there is likely to be a legal justification for transactions that allowed an SDLT liability to be missed. ‘Individuals who decided to engage in the planning because it seemed so easy at the time may not have the stomach for the fight once faced with a HMRC challenge. This can be expensive but another critical factor is a climate in which engaging in abusive tax avoidance can cause reputational damage to those in the public eye,’ he said.[1]
[1] http://www.propertywire.com/news/europe/uk-property-tax-crackdown-2015120111265.html