HM Revenue & Customs’ extension of power
Spot-checks for companies and self-employed people who run their businesses from home
From next April tax inspectors will be able to carry out spot-checks on all companies and self-employed people who run their businesses from home. Inspectors under the new scheme will be permitted to visit businesses with no warning to “inspect records, assets and premises.” At present, HM Revenue & Customs’ (HMRC) must open an inquiry into a company and then give 24 hours’ notice of a visit. However, VAT officials will lose the power to turn up at people’s homes without notice.
This extension of HMRCs power comes as it also prepares to address the issue of tax loopholes in the coming year. The Treasury claims that the crackdown, which it calls “protecting tax revenue”, will raise £660 million in revenue next year alone.
A spokeswoman for HMRC said: “The aim of the Powers Review is to align and modernise the powers and taxpayer safeguards that HMRC inherited from Customs & Excise and the Inland Revenue. The intention is to provide greater consistency and alignment of our access to records and information.”
In an unusual move, the Treasury has backdated one of the tax amendments to 1987, meaning that companies or individuals who have taken advantage of tax-planning measure since then could be hit with a hefty tax bill in the coming months.
Any companies or individuals who have used trusts to take advantage of double taxation treaties to minimise their tax bills could be affected. The HMRC spokeswoman said: “There has been highly aggressive avoidance with the clear intent of frustrating [the] previous legislation, hence the clarification.”
The other measures include tightening special stamp duty exemptions for those who take out Sharia mortgages, stopping people from setting up loss-making businesses to minimise their tax bills and a crackdown on the way in which North Sea oil and gas companies calculate their tax liabilities. The Revenue will also clampdown on companies using UK-controlled offshore vehicles to minimise their tax payments.
Levels and bases of, and reliefs from, taxation are subject to change.
