This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
| 2 minutes read

Spring Statement 2022: key announcements for tax compliance

It comes as no surprise that the Spring Statement 2022 is focused on the cost of living crisis exacerbated by the war in Ukraine. As well as the anticipated fuel duty cut and raised National Insurance threshold, the Government has pledged to reduce the basic rate of income tax to 19% from April 2024. With these tax reductions, HMRC is sure to be more focused than ever on minimising the tax gap and doing so by reference to higher profile targets who are less impacted by the cost of living.

As part of that, it is evident from the Statement that a large element of this will be a continued investment in tackling fraud.

In the Spending Review 2021, HMRC was provided with an additional £292m across three years to bear down on tax avoidance and evasion, and the Spring Statement includes £161m to be used over the next five years to fund matters including ensuring large and mid-sized businesses pay the tax they owe and to reduce fraud. This is forecast to be a very impressive investment, with the exchequer impact estimated to be more than £3bn over the next five years.

Another area where concern over abuse has grown in recent years is R&D tax reliefs. This was highlighted in the Autumn Budget 2021, and in November a new cross-cutting HMRC team was created to specifically deal with the issue. New measures set to tackle the abuse will take effect from April 2023, and the Spring Statement notes that the Government will consider what more can be done ahead of Budget 2022.

HMRC is likely to be assisted in its quest to combat avoidance and fraud with the Economic Crime (Transparency and Enforcement) Act 2022 requiring greater transparency in the ownership of UK land and property.

HMRC has been keen to embrace the challenges of dealing with fraud in the modern world. They have, for example, been adept at dealing with new and evolving technologies as evidenced by the recent seizure of three NFTs as part of a probe into a suspected VAT fraud – the first UK law enforcement agency to make such a seizure. We are already seeing significant involvement from HMRC in cryptocurrencies and, as HMRC said at the time they seized the NFTs, it “serves as a warning to anyone who thinks they can use crypto assets to hide money from HMRC.

It will certainly be interesting to see what further measures are introduced in Budget 2022, and if there will be more of a focus on the uncertain area around the taxation of crypto assets.

See our other commentary from the Spring Statement which covers the key points for private clients.

This blog was first published on Lexis®PSL.

The 2022 statement has been announced, outlining the Government’s plans to ease the cost of living crisis.

Tags

litigation, spring statement, tax policy, hmrc, tax, petf, tax investigations, tax disputes, petf enquiries

Latest Insights

post featured image
post featured image