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HMRC’s approach to compliance

Sledgehammer to crack a nut?

Key points

  • Significant budget cuts are a big threat to HMRC’s efficiency.
  • Nudge letters blur the line in whether a disclosure is prompted.
  • Treating all taxpayers equally is not the same as treating everyone equitably.
  • HMRC’s blinkered approach to reaching a settlement.
  • Taxpayers seem to be required to prove their innocence rather than HMRC prove their guilt.

Over the years HMRC’s approach to compliance has evolved depending on the different types of threats the department believes it is facing and the most efficient way to address them. For avoidance schemes the department came up with accelerated payment notices (APNs) and follower notices. For assets held overseas there were a number of information exchange agreements and more recently the common reporting standard. However arguably the biggest threats to HMRC are the significant cuts to finances and technically capable staff.

Now in order to ‘function’ it...

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