HMRC’s approach to compliance

Over the years HMRC’s approach to compliance has evolved depending on the different types of threats the department believes it is facing and the most efficient way to address them. For avoidance schemes the department came up with accelerated payment notices (APNs) and follower notices. For assets held overseas there were a number of information exchange agreements and more recently the common reporting standard. However arguably the biggest threats to HMRC are the significant cuts to finances and technically capable staff.

Now in order to ‘function’ it appears HMRC is focusing its meagre budgets on methods to obtain the best return regardless of the impact on taxpayers.

One-to-many letters

When HMRC first began to issue nudge or one-to-many letters it was suggested that the department had identified areas of difficulty and was targeting the taxpayers whom HMRC had identified as being at...