Agencies to be targeted by HMRC in tax crackdown

Estate agencies face being targeted in a new HMRC crackdown on tax avoidance announced by Chancellor Jeremy Hunt (main picture) in last week’s Budget.

The Chancellor said private debt collection agencies would be used to identify companies that have failed to pay tax, The Times reports.

He gave HMRC an extra £35 million a year for the task, and said that hundreds of officers would help raise £4.5 billion within five years.

Clampdown

A clampdown on cryptocurrency tax evasion that is expected to bring in £205 million over the next five years, was also announced.

A total of £43.9 billion is owed to HMRC, up from £20 billion before the Covid pandemic.

Tax dodge

In October, HMRC warned landlords that a new kind of tax dodge scheme being promoted to landlords is illegal and may result in a bigger bill.

The schemes, which are sometimes called ‘hybrid business models’, are advertised as a way of avoiding capital gains and inheritance tax.

Daily fines

Bypassing mortgage interest relief restrictions is one of the ways the schemes are designed to reduce tax, HMRC said.

Any individual who is behind one of these schemes can be fined £600 per day initially, rising to a penalty of £1 million.

Late payments

Meanwhile, the cost of late payments to small businesses has more than doubled in two years to £1.6 billion, according to accountancy firm Xero.

Xero found that small firms were on average paid six days beyond their agreed terms, The Times reports.