Taxman claws back record £21bn

Her Majesty's Revenue & Customs clawed back a record £21bn from tax avoiders and evaders last year, as the Government's clampdown finally bore fruit.

Tough austerity measures have put the spotlight on tax payments and HMRC netted 31 per cent more from compliance investigations into avoidance in the year to 31 March than the year before.

Then the Inland Revenue recouped just £16bn, according to the accountancy firm UHY Hacker Young.

The taxman retrieved just £6.9bn in the year to 31 March 2005.

Roy Maugham, tax partner at UHY Hacker Young, said: "HMRC's approach is becoming more hard-line with each passing year, and that is reflected in these figures. This is the approach HMRC must take if it is to meet the very ambitious compliance yield targets set by the Chancellor."

HMRC's campaign has targeted about 30 business sectors where it believes tax avoidance is particularly prevalent. These include London lawyers, online traders and the construction industry.

However, Mr Maugham warns that the HMRC is under such great pressure to claw back taxes that it could put law-abiding firms at risk.

"There is a real danger that these tax inspectors, who swamp a sector, will be forced to keep digging until they find something – anything – to justify the noise HMRC has made about its taskforces," he said. "It used to be that compliant businesses had nothing to worry about, but this is changing as inspectors come under huge pressure to increase yields," he added.