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How to Navigate HMRC’s Tax Avoidance Crackdown
As the UK Government implements plans to curb tax avoidance, here's what you need to know.
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How to Navigate HMRC’s Tax Avoidance Crackdown
As the UK Government implements plans to curb tax avoidance, here's what you need to know.
Last updated 06/05/2025
The UK Government has begun implementing plans to curb tax avoidance in the UK.
The plans involve giving HMRC more powers to identify and stop tax avoidance schemes, as well as introducing harsher penalties for people and businesses who try and avoid paying what they owe.
As well as this, the Government is even offering whistleblowers who inform the HMRC about tax dodging a slice of any money collected as a result of their reporting. This is a move to entice those who would turn a blind eye to tax avoidance to do their bit in closing what the Chancellor, Rachel Reeves, has called the “tax gap”.
What is Tax Avoidance?
It’s a term we’ve all heard of, and one that often gets a lot of attention from the media, but what is tax avoidance?
Well, put simply, it’s using legal means to slash the amount of tax you pay. It’s not to be confused with tax evasion, which is using illegal methods (like the faking of financial documents) to avoid taxes. While there’s no suggestion that people and businesses that avoid tax are doing anything illegal, the UK Government has said that it considers tax avoidance to be unfair and wants to do more to ensure that avoidance becomes harder.
What Does All This Mean for Your Business?
With the government crackdown set to be well underway by the time you read this, the one thing on your mind is probably ‘does it affect me?’. Well, we can’t answer that easily, as it depends on your business’s approach to taxation. However, you don’t want to fall foul of the rules.
Helpfully, the UK Government has said that it will be specifically targeting tax avoidance schemes. Even more specifically, it will be making it harder to use tax avoidance schemes, increasing the chances of getting caught if you use them, and introducing more severe measures against those who do get caught.
Want to know more about Taxation?
Taxes are confusing. If you want to know more about how taxation works for businesses and how you can gain more of an understanding of business accountancy more generally, read our comprehensive guide on business accountancy.
How to Stay Within the Rules
If you have a complex tax structure, the new rules could affect your business. HMRC is due to become a lot more scrupulous, looking closely at businesses (especially those with complex tax structures) with the specific intention of catching businesses that are not acting ‘in the spirit of the law’.
To help with their extra efforts, HMRC are planning to recruit 5,000 new compliance officers and 1,800 debt collectors. With more manpower, the aim is to make the job of clamping down on tax avoidance easier. They’ll also be AI software introduced to analyse businesses in a way not possible until recently, all to help them identify possible tax avoidance more efficiently.
All this means it’s in your best interest to go over your tax affairs and make sure everything is set up how it should be. If you’re a small business and you’re still finding your feet with business accountancy, it’s more important now than before to ensure you’re getting everything right. This is exactly why outsourcing your accountancy is a great idea – because it takes all the stress and pressure away from you and gives it to professionals who know what they’re doing.
Get Ahead of HMRC With Commercial Experts
If you’re not sure about taxation, how much you should pay, or if you could fall foul of the new rules, one of the best things you can do is outsource your accounts to someone who does. Let’s face it, doing your own accounting is boring if nothing else. And, with all these new rules, there’s more pressure now than ever before to get it right.
Luckily, that’s where we can help. We can help you get ahead of HMRC; just answer the question below to start our quick questionnaire, then, based on your responses, you’ll receive a range of personalised business accountancy quotes tailored to your unique needs.
This service is completely free, and there’s no obligation to commit. So, if you’re not happy with the options, you can walk away without spending a thing.
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