Budget: Rebalancing of rhetoric on tax compliance a step forward

Tax advisers have noted that the Government today extended the gamut of tax compliance measures from tackling evasion, avoidance and planning to also encompass tackling ‘imbalances in the tax system’.

Commenting, CIOT Tax Policy Director Patrick Stevens said:

“In the past, Governments have announced each year how much tax receipts are going to be increased by tackling evasion and avoidance. Many of the changes made are then simply changing tax rules rather than closing down some abuse of the system. So many rule changes and demands for action have been referred to as anti-avoidance, nobody really knows what the phrase now means.

“In this respect today’s Budget is a step forward. As well as stopping evasion and avoidance, the Chancellor is now "rebalancing the tax system" to get a result that he thinks is fairer. This is helpful as he is no longer referring to many old activities as avoidance. He is just changing his mind about what he thinks the rules should say. It is to be hoped that more transparency in this area will make it clear that many activities of taxpayers, complained about by politicians, are not avoidance but a previous policy someone did not like.

“This new category of tax changes will contribute to the promised £5 billion a year of additional compliance revenue by the end of this Parliament. Some will question whether this moves the goalposts in this area to bring in changes most would consider simply tax increases.”

CIOT has also welcomed the announcement of extra resources for HMRC but called for some to be spent on improving the service the tax authority provides to taxpayers. Patrick Stevens said:

“HMRC has been given an extra £750m to increase its tax collection activities. This must surely be a good decision for the country but part of the money should be spent on getting the general activities of the Department back under control. Recent revelations about the failure of many taxpayers to get through to HMRC by phone and hundreds of thousands of unanswered letters mean that some of the Revenue's new resources must be spent there.”


1.       As announced at the Summer Budget, the government is restricting tax relief for finance costs on residential properties to the basic rate of income tax from April 2017.