HMRC predicts £1.2bn tax windfall as offshore clampdown gets Royal nod
New tax avoidance measures aimed at tackle VAT fraud and close offshore tax loopholes have now become law in the UK.
The Finance Act 2018, which includes these measures and has just received Royal Assent with HMRC predicting that it will help to raise an additional £1.2bn into UK coffers.
Mel Stride, financial secretary to the Treasury and Paymaster General said: “The UK’s tax gap is at a record low and one of the lowest in the world but we are not resting on our laurels.
“Today’s changes show our determination to ensure the tax system remains fair for the honest majority of people and businesses who pay the taxes they owe.”
The Treasury said that as a result of this new legislation:
- online marketplaces will become more responsible for paying the unpaid VAT of their sellers
- people will not be able to avoid paying UK tax on the funds they withdraw from offshore trusts, as the government closes loopholes in existing anti-avoidance rules
- companies will not be able to claim relief for losses on the disposal of shares which do not reflect losses incurred by the wider group
- companies will not be able to claim unfair tax relief on their intellectual property
- highly paid people cannot use complicated structures to avoid reporting how much they really earn
- rogue operators of illegal landfill sites will be forced to pay tax, preventing them from undercutting honest waste management businesses
The Treasury added in a statement announcing the rubber stamping of the bill that since 2010, the UK government has introduced over 100 such measures in this space, helping to “secure and protect” over £175bn in tax that would otherwise have gone unpaid.