The agency was formed in 2014 to improve operational efficiency by bringing together most operational and policy work on marketed avoidance schemes, users and promoters.
According to a freedom of information request from law firm Collyer Bristow, cited by online accountancy magazine CCH Daily, HMRC’s investment in CAD employees rose to £58.6m ($76.6m, €64m) in 2015/16 from £54.9m.
The directorate says this concentration of expertise has proved successful, with undertaken investigations resulting in additional income tax receipts rising by 79% to £886m in 2015/16, up from £494m in 2014/15 .
According to Collyer Bristow, the increased investment in staff comes ahead of the introduction of the Criminal Finances Act on 30 September, which will allow the taxman to impose much tougher penalties on accountants and advisers who market tax avoidance schemes.
Implications
Once the act comes into force, if an employee is suspected of facilitating tax avoidance then the company they work for will also be automatically under suspicion and criminally liable.
“HMRC’s latest investment shows it’s continuing to turn up the heat on marketed tax avoidance schemes,” said James Badcock, partner and head of the private client team at Collyer Bristow.
“A growing array of hurdles have been placed in their way meaning participants can become embroiled in lengthy and costly investigations and legal proceedings.
“With this in mind, many companies are likely to reassess their offering with regards to avoidance schemes.”
Stepping up efforts
In January 2017, HMRC announced it would add up to 200 full-time equivalent staff to the Counter-Avoidance team each year from 2018-19 to 2021-22, a 20% increase in resource, to ensure that the anti-avoidance measures it has at its disposal can be used to the full.
“The return on this investment is estimated to bring forward over £450m in expected tax revenues by 2021-22. This package won’t necessarily increase the overall tax take but will accelerate the collection of tax from the mid-term to the shorter term,” HMRC said.
