Around 100 residential property developments in the UK have been branded "high risk" by the tax office as a new anti-avoidance task force gets to work on targeting offshore developers, IBTimes UK can reveal. A large number of those developments are in London, where investors have cashed in on a booming property market over recent years.
A Treasury spokesman said the new "non-resident UK property development task force", unveiled by Chancellor George Osborne in his 2016 Budget, will bring together existing staff in HM Revenue & Customs (HMRC), though external experts would be brought in to advise.
Establishing a task force, he said, will focus HMRC's attention on a specific area and will begin work more or less immediately. Provisional research into offshore developers has already taken place. Extra resources have not been provided.
The HMRC task force will work alongside new legislation targeted at ending tax avoidance by offshore property developers. According to budget documents, the government will introduce legislation in the Finance Bill 2016 "to ensure offshore structures cannot be used to avoid UK tax on profits that are generated from developing UK property".
While the estimates are uncertain, and past revenues from closing tax loopholes have disappointed, the Treasury believes it will raise £2.28bn (€3.54bn, $4bn) by 2020 in this particular crackdown. "In every budget I've given, action against tax avoidance and evasion has contributed to the repair of our public finances," Osborne told the House of Commons during his budget speech. "And this budget is no different."