Tax under scrutiny: HMRC disputes and pressure points
HMRC’s approach to tax compliance is becoming increasingly proactive. With tax revenues rising, political pressure to close the tax gap intensifying, and HMRC investing heavily in data driven enforcement, businesses are operating in a far more assertive compliance environment than before.
What is HMRC focusing on? What areas of tax are at greatest risk? How can you adjust your approach to protect against enquiries and investigations? How can you ensure you are litigation ready? These are questions we have sought to answer by collecting and analysing HMRC’s investigation and litigation activity since 2018.
Our analysis of HMRC’s data, combined with insights from recent court judgments, reveals a landscape where international tax issues dominate, employment related risks are accelerating, and corporation tax exposures have tripled over six years.
HMRC is bolstered by thousands of newly recruited compliance officers, expanded digital reporting requirements and strong information gathering powers. This may result in an increasingly proactive HMRC and deeper tax scrutiny.
As HMRC’s compliance strategy is becoming more sophisticated, taxpayers need to match this. Stronger governance, retention of evidence, early engagement with advisors, and well-documented positions are essential foundations for reducing risk.
Whether you are dealing with complex cross border arrangements, managing large contractor workforces, or operating in a high growth sector, the direction of HMRC scrutiny is predictable and managing dispute risk is possible for those who prepare early.
CMS has published its data-driven findings and analysis in a new report, Tax under scrutiny: HMRC disputes and pressure points.
Click here to request your full copy.
