Tax hitmen to track your spending
Up to two million people are to have their credit files secretly checked under a crackdown on tax evasion to be unveiled by George Osborne to help raise another £10 billion.
Credit reference agencies will cross-check details of the income people declare on their tax returns against their spending patterns to identify “high” and “medium” risks of both illegal and legal tax avoidance.
People identified to HM Revenue and Customs will then be subject to more detailed investigations. About two million people are expected to be scrutinised under the programme, which may lead to privacy concerns.
HMRC will today unveil the “successful” results of a pilot programme involving about 20,000 people which will now be extended nationally.
Many of those who are expected to be identified are likely to be self-employed workers who have under-declared their income to the authorities.
However, those who have benefited from secret windfalls – such as an inheritance or a bonus – and people with secret offshore accounts could also be highlighted.
Mr Osborne is preparing to deliver the Autumn Statement on Wednesday, in which he is expected to announce another extension to the Government’s austerity programme. Spending cuts and tax rises are now expected to last until at least 2018.
The Chancellor indicated yesterday that he was preparing a new round of welfare cuts – and tax rises for the wealthy – this week. The renewed crackdown on avoidance is also expected to play a key role.
Treasury sources said that “hundreds of millions” are expected to be raised from the greater use of third-party data, such as that supplied by credit reference agencies.
Ministers also wish to encourage more whistle-blowers to come forward with details of offshore bank accounts.
Mr Osborne said: “While most taxpayers are doing their bit to help us balance the books, it is unacceptable for a minority to avoid paying their fair share.”
Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, added: “It is simply not fair that at a time when most people are making a contribution to balancing the nation’s books, there is a small minority of taxpayers who try to escape their responsibility.”
The Chancellor will this week extend the austerity programme after admitting it is “clearly taking longer” to deal with the country’s debts than “anyone would have hoped”.
The credit-reference scheme is among a series of initiatives to be outlined today to reduce tax avoidance and evasion among wealthy Britons and multinational companies.
Mr Osborne will also announce an agreement with Switzerland which will give the British authorities access to the details of the offshore savings of thousands of Britons.
Information will also be routinely shared between the British and American authorities.
The Treasury is to provide an extra £77 million a year to HMRC over the next two years to increase its investigative capability. The “affluent unit” which targets the wealthy is to take on 100 extra staff.
Meanwhile, a parliamentary committee will today attack HMRC for being “way too lenient” in its treatment of multinational companies.
The public accounts committee will accuse international firms of “insulting” ordinary Britons by funnelling profits off shore.
Yesterday, Starbucks announced it had entered talks with HMRC about paying more tax in the UK following reports it had paid just £8.5 million tax on its British profits since 1998.
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