HMRC and taxpayers disputes increase 43%

The number of disputes between taxpayers and HMRC has risen by 43%, according to analysis by accountancy firm Price Bailey.

This increase has been recorded over the past two years, with there being 7,377 first-tier tribunal cases in 2017/18, up from 6,559 in 2016/17 and 5,161 in 2015/16.

Every year, roughly £11bn is estimated to be lost through tax evasion and recently HMRC has ramped up its efforts to crack down on tax evaders.

The accountancy firm said the increase was due to HMRC’s access to taxpayers’ data through its Connect software. Because of this, it can analyse personal and commercial information through data obtained from the likes of banks and foreign tax authorities .

Price Bailey partner, Richard Grimster, said: “The amount of data it is able to marshal allows it to paint a much more detailed picture of an individual’s or a business’s tax affairs. This means that HMRC can instigate a greater number of reviews at a significantly lower cost.

“HMRC is now able to spot discrepancies much more efficiently. Its software can automatically check information reported in tax returns against bank accounts and make sure they tally. Previously, checks of this kind would have been laborious and time-consuming but HMRC’s software can spot any inconsistencies swiftly and flag those for further investigation.”