HM Revenue & Customs (HMRC) collected an additional £140m from investigations into unpaid capital gains tax (CGT) over the last financial year.
Through analysing data from HMRC, £55m of the figure came from investigations relating to ‘wealthy individuals’ and mid-sized businesses with the remaining £85m stemming from regular taxpayers and small businesses.
The substantial numbers involved make it clear HMRC is focused on this area and taxpayers should be sure to have their affairs in order.
“The Revenue has kept the spotlight on CGT avoidance schemes, abuse and error over the last year,”.
“It has proved a fruitful area for enquiries and they are likely to continue in this vein. A continuous stream of high-profile tax avoidance cases in the media – including the Panama Papers Scandal – means that pressure on HMRC to stamp out what it sees as abuses remains intense.”
CGT is paid on profit when disposing of an asset or, more specifically, on all personal assets worth £6,000 or more, property other than a taxpayer’s main home, any shares not in an ISA or Personal Equity Plan and business assets. New CGT rates were introduced in last year’s Budget, with the higher rate dropping from 28% to 20% and the basic rate from 18% to 10% from April 2016 onwards.
Investors should be aware of how the HMRC are attacking this and “Ensuring tax affairs are in order and seeking professional guidance where necessary should be considered paramount if taxpayers wish to avoid lengthy investigations and hefty penalties if underpayment is uncovered.”
“HMRC can be expected to look closely at anything which it thinks goes against the spirit of the law and of course any deliberate or negligent underpayment so, while in many cases there is likely to be a legal justification for any scheme or discrepancy, taxpayers need to be prepared to answer any questions.”