Disclosure campaigns generate £1.2bn for HMRC

The data may have taken the best part of seven months to extract from HMRC, but the wait was worthwhile as the latest revenue results from campaigns are an interesting read.

Campaigns involve a window of opportunity for the targeted business sector to voluntarily disclose and pay tax on undeclared income and/or overstated expenditure to HMRC, in return for a reduced penalty. Once the window has closed, HMRC embarks upon follow up compliance activity, which typically includes investigations and prosecutions.

According to the data released by HMRC, over £1.2bn has been generated from the 18 campaigns launched to date. Only  remain live which are the Let Property, Second Income and Credit Card Sales campaigns.
Arguably of more interest is the amount of money HMRC is continuing to collect from the subsequent compliance action. For example, between February 2015 and March 2017, HMRC delivered nearly £25m from the ongoing pursuit of doctors and dentists in the aftermath of the Tax Health Plan campaign, even though the disclosure opportunity closed all the way back in June 2010.

During the same time frame nearly £18m was extracted from online traders, even though the E marketplaces campaign closed in September 2012.

Top five

Here are the top five revenue generating closed campaigns:

1. Tax Health Plan (doctors and dentists) – £24.7m
2. E marketplaces (online traders) – £17.7m
3. Property Sales (UK and foreign residential disposals) – £14.6m
4. Offshore New Disclosure Opportunity (UK based individuals/businesses with an offshore account/asset) – £10.8m
5. VAT Outstanding Returns (window for VAT registered businesses to get uptodate with late VAT returns) – £8.0m

These figures cover the period between 1 February 2015 and 31 March 2017.

Let Property

The money being delivered by the Let Property Campaign also appears to be gathering momentum with £135.2m accumulated by 31 March 2017.

Launched in September 2013, the campaign initially delivered just over £0.5m on average per month, but that average has gradually climbed and is now close to £5m a month based on this latest data.
 

Date	Amount collected (£m)	Increase (£m)	Average per month (£m)
Launch – 30 October  2014	7.8	N/A	0.60
31 January 2015	20.0	12.2	4.06
30 June 2016	92.0	72.0	4.23
31 March 2017	135.2	43.2	4.80

Source: HMRC

Complete picture

Once a campaign window has closed, it must be tempting for that particular business sector to breathe a sigh of relief and to assume HMRC has moved on to different targets. There is an element of truth in that presumption, however there is also a false complacency in assuming HMRC has moved on completely.

As the figures show, the follow up compliance action continues for a long time, with HMRC still highly active with some campaigns six, seven, even eight years after the disclosure window has closed.

Of course the sensible solution is to have fee protection insurance in place, just in case HMRC does begin a tax enquiry after a campaign. If you are a taxpayer, speak to your accountant about ensuring you have the necessary cover just in case your business sector is chosen by HMRC.

Here is the complete table setting out the latest results:
 

Campaign  Launch  31/1/15 (£)  31/3/17 (£)  Increase  Closure date/Live  Offshore Disclosure Facility  2007  512,190,000  512,455,397  265,397  November 2007  Offshore New Disclosure Facility  2009  156,923,070  167,759,651  10,836,581  March 2010  Tax Health Plan  2010  70,961,034  95,661,578  24,700,544  June 2010  Plumbers Tax Safe Plan  2011  22,166,777  23,877,100  1,710,323  August 2011  Tax Catch Up Plan  2011  2,968,808  3,785,832  817,024  March 2012  VAT Initiative  2011  22,271,526  22,711,137  439,611  December 2011  E marketplaces  2012  9,379,361  27,175,038  17,795,677  September 2012  Electricians Tax Safe Plan  2012  15,803,609  16,633,824  830,215  August 2012  Tax Returns Initiative  2012  86,279,162  86,412,021  132,859  October 2012  Direct Selling  2012  505,617  757,568  251,951  February 2013  Let Property  2013  20,017,365  135,243,635  115,226,270  Live  My Tax Return Catch Up  2013  33,137,621  39,795,869  6,658,248  October 2013  VAT Outstanding Returns  2013  38,696,945  46,719,118  8,022,173  February 2013  Property Sales  2013  8,245,782  22,869,794  14,624,012  September 2013  Health Wellbeing Tax Plan  2013  936,315  3,031,057  2,094,742  April 2014  Second Income  2014  0  4,882,373  4,882,373  Live  Solicitors Tax Campaign  2014  0  1,337,482  1,337,482  June 2015  Credit Card Sales  2014  0  398,386  398,386  Live  Campaign Consequential Disclosures    5,536,921  20,455,297  14,918,376    Totals    1,006,019,913  1,231,962,157  225,942,244

Source: HMRC

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