The Profession Witnesses An Increase In HMRC Activity

One of the government’s recent consultations has been in relation to the options for improving the quality of data received from third parties to ensure that HMRC gets “the right data, of the right quality, at the right time” as mentioned in the Foreword of the Consultation, ‘Better use of new and improved third-party data to make it easier to pay tax right first time’ and this consultation has been met with support from the tax and accountancy bodies.

However, in addition to the support, there has been concerns raised in relation to the data being provided securely and accurately, and that the scope of errors in matching information to taxpayer’s records is minimised.

This all comes with the announcements in relation to HMRC’s drive to increase their activities, with an expected increase in the number of enquiries that they are likely to raise over the next few years, especially with the increase in the number of “compliance” staff who will be looking at closing the tax gap which is currently in the region of £40 billion through their increased work and also other actions taken by HMRC.

In addition to the increased activity from HMRC in relation to enquiries, they have also been introducing new penalty regime’s over the last few years, with both VAT and now for self-assessment (with its introduction of Making Tax Digital (MTD)), moving to a points-based system. This will affect both businesses and individuals, however the time limits for the late payments arising have decreased with penalties from 1 April 2025 now starting after more than 15 days at a rate of 3% moving to a daily rate of 10% after 31 days or more.

As yet, these changes do not affect Corporation Tax, however there is an expectation that this will follow in the future when MTD is introduced for companies which is not expected to be mandated before April 2026.

Disclaimer - All information in this post was correct at time of writing.