The Government will raise £9bn over the next five years by cracking down on tax avoidance and evasion, Chancellor George Osborne has declared.
In today’s Autumn Statement, Osborne said the Government will be clamping down on employed individuals who are registered as self-employed and other means of ”tax evasion”.
The Autumn Statement also sets out that where a scheme is found in court to be a tax avoidance scheme, anyone who used that scheme will be penalised.
Osborne said: “Today we set out in detail the largest package of measures to tackle tax avoidance, tax evasion, fraud and error so far this parliament. Together it will raise over £9bn over the next five years.
”We’re going to tackle the growth of intermediaries disguising employment as false self employment, depriving workforces of basic employment rights like the minimum wage in a bid to avoid employer national insurance.
”We’ll halve the final period exemption for capital gains tax private residence relief. We will end the abuse of dual contracts, offshore oil and gas contracting, derivatives linked to profits and share buy backs.”
The Autumn Statement says: “The Government is acting now to level the playing field so that companies cannot use employment intermediaries to disguise employment as self-employment and thus avoid employment taxes and deny employment rights to their workforce.
”The Government will legislate to prevent employment intermediaries from being able to use contrived contracts to disguise the employment of workers. This will take effect from April 2014 and raise around £400m each year.”
Other measures to tackle tax evasion and avoidance announced in the statement include the introduction of capital gains tax on gains made by non-residents disposing of UK residential property, and introducing a new power requiring taxpayers using avoidance schemes that have already been defeated in the courts to pay the tax they are trying to avoid upfront.
On users of failed avoidance schemes, the Autumn Statement says: “This measure will introduce a new obligation for users of an avoidance scheme that HMRC have defeated in a tribunal or court hearing in another party’s litigation, to concede their position to reflect that decision.
“When there has been a relevant decision HMRC will issue a notice to all users of the scheme in question requiring them to amend their return or advise HMRC why they believe they should not. A tax-geared penalty would be charged if they failed to amend their return and it was subsequently found the avoidance scheme they used failed on the same point of law.”
The Statement notes taxpayers will be able to appeal against the penalty.