New data has revealed that the number of tax disputes launched through the courts against HM Revenue & Customs (HMRC) has risen by around 43 per cent in the last two year.
According to official figures, the number of cases dealt with by the First Tier Tribunal in 2015/16 was 5,161.
However, in 2017/18 this figure rose to 7,377 and in the 2016/17 tax year there were also 6,559 cases, which means that in the last year alone the number of cases has also risen by 12 per cent.
It is thought that the sudden rise in cases has been driven by the more aggressive tactics of the tax authority and it‘s access to new data using the latest technology, which has led to more cases being investigated in the first place.
The implementation of HMRC’s Connect system in 2010 is thought to have had a considerable impact, as it has made the process for investigating tax affairs far cheaper.
The system also facilitates, what it thought to be HMRC’s main area of focus, which is reducing tax losses resulting from undeclared income or gains arising offshore.
HMRC has been aided in this thanks to greater collaboration and data sharing between nations and organisations.
Another key target for HMRC’s software and enforcement action in recent years has been small businesses and sole traders, who typically have less access to effective tax advice and are therefore easier targets.
In light of this rise, taxpayers are being encourage to seek additional support as and when they require it.