HMRC claws back money from CGT evaders
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The taxman has clawed back 23% more Capital Gains Tax through investigations in the last two years by clamping down on evaders.
A Freedom of Information request by UHY Hacker Young accountants revealed £73.6m was taken after investigations in 2009/10 compared with £59.7m in 2007/8.
But HMRC says that although they are stepping up work in this area the money taken from investigations is simply part of their ongoing job.
A HMRC spokesperson says: “Our enquiries are risk based, enabling us to concentrate our resources on the non compliant, reducing the burden on honest taxpayers.
“We risk assess returns using a variety of methods, as well as cross-matching database information, both our own and external. Enquiries into the disposal of second homes is just one area we look at.”
Last tax year HMRC collected £2.458 billion in CGT revenue, a huge drop from £7.852 billion from the previous year.
Roy Maugham, tax partner at UHY Hacker Young claims HMRC set up a specific team to tackle CGT evasion and maximise receipts and will step up activity in coming years.
He adds: “With an increase in CGT a probable outcome of the emergency budget, we expect this to go hand in hand with more aggressive compliance work to counteract the subsequent surge in CGT avoidance and evasion it might bring.”
UHY Hacker Young says that one area where taxpayers often make mistakes is when claiming the cost of work carried out on property against CGT bills.
Maugham adds: “Many HMRC investigations lead to disagreements over whether some costs are repair costs or enhancement to the property. HMRC often challenges the records for expenditure going back 20 years or more.”
According to UHY Hacker Young, the yield achieved per CGT investigation shot up 79% from £6,000 in 2007/8 to £10,800 in 2009/10 despite the number of enquiries into CGT falling 31% from 9,900 in 2007/8 to 6,800 in 2009/10.
