HMRC’s investigations and compliance department saved £4bn in taxes from being lost in the last quarter, nearly double the £2.2bn for the same period last year, according to new data shared with City A.M.
The increase in the amount of taxes saved will be due in part due to the winding down of the furlough scheme and HMRC having more personnel and time available.
As HMRC reallocated a significant portion of its staff to manage the furlough scheme in 2020, its ability to conduct compliance work was affected
With the furlough scheme winding down, it has been able to again to direct its focus on tackling tax evasion.
HMRC stops tax being lost through carrying out tax investigations, recouping money owed and also ensuring that fraudulent repayments are not made.
Throughout the year HMRC has been escalating its campaign to prevent tax from being lost. The £4bn saved by HMRC in the first quarter of 2021 was more than four times that saved in the second quarter of 2020, where HMRC prevented just £870m from being lost.
Over the past eighteen months, the government has spent vast sums of money to stabilise the economy and ensure people have steady income, through the furlough scheme
The government will be looking to recoup funds to make up for the money spent financing the coronavirus support programmes.
This may well mean that HMRC will be under increasing pressure to ensure the ‘tax gap’ – the difference between the amount of tax that should be collected and the amount of tax that is collected – is as small as possible.