Investigation and compliance work from HMRC saved £4bn in taxes from being lost in the last quarter, nearly double the £2.2bn for the same period last year.
HMRC’s ability to conduct the necessary compliance work was affected by having to reallocate a large portion of its staff to manage the furlough scheme throughout 2020. With the scheme now coming to an end, HMRC has been able to refocus on tax investigation activity.
The £4bn figure saved in the last quarter is an illustration of HMRC’s determination to minimise the ‘tax gap’ – the difference between the amount of tax that should be collected and the amount of tax that is collected.
Reducing the tax gap will be an important part of HMRC’s strategy to help recoup funds to make up for the money spent financing the coronavirus support programmes. This pressure on HMRC is expected to result in an increase in the number of tax investigations, for both businesses and individuals.
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