Compliance

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M Higgins (TC4259)

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The HMRC division dedicated to investigating the affairs of affluent taxpayers collected £137.2m in additional tax in 2013/14, up from £85.7m in 2012/13, an increase of 62%, according to law firm Pinsent Masons.

Around 500,000 individuals are potential targets of the Revenue team that focuses on UK residents with an annual income in excess of £150,000 or wealth of more than £1m. They are people not deemed rich enough to be the concern of the tax department’s high net-worth unit.

The tax system costs businesses up to £10bn in hidden costs a year, with small and medium-sized enterprises (SMEs) bearing the brunt, according to research by the Association of Accounting Technicians (AAT).

The organisation’s survey of 500 firms found that each SME pays an average of £4,376 in tax compliance costs, just under half the £8,907 paid by larger businesses.

Lessons learned from compliance reviews

Charities have been issued with stern government guidance on the right way to take advantage of tax breaks.

The Charity Commission’s document explains that reasonable use of fiscal reliefs and tax planning is necessary and sensible, but urges trustees to have regard to their duty to act prudently in the best interests of their charity and not enter into arrangements that could damage the reputation of the organisation.