HM Revenue and Customs is planning to spend £1bn - a quarter of its £4bn budget - on enforcement and compliance in a bid to cut down the rate of tax avoidance.
A business plan that was published by the department yesterday, shows that HMRC is aiming to bring the level of tax dodging down to £2.4bn, the Times reports.
Leslie Strathie, HMRC's chief executive and permanent secretary, who stepped into the role five months ago, has previously indicated intentions to do more to clamp down on those who 'bent or broke the rules'.
The approach from HMRC follows last year's 'litigation and settlement review' in which the department promised to increase the number of people it took to court in an effort to recover taxes, instead of agreeing to out-of-court settlements. However this tack has proved more expensive, as companies and individuals have been prepared to mount a court defence challenging HMRC.
Andrew Shaw, national tax managing partner at Begbies Traynor believes that HMRC needs to treat tax evasion just as seriously as tax avoidance cases otherwise 'people will perceive that those who evade tax get away with it and instead of encouraging compliance you will actually reward those that act illegally'.
Shaw said:'Tax Avoidance should be dealt with by amending the legislation to close loopholes rather than trying to litigate against people who made use of the loophole.'
The business plan also indicated that 21% of HMRC's £4bn budget will be spent on IT and 18% on personal tax.
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