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Government launches £900m tax evasion clampdown

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20th Sep 2010
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Chief secretary to the Treasury Danny Alexander has unveiled new plans to pursue taxes lost through evasion and avoidance.

Likening tax evaders to benefit cheats, Alexander said the government would make £900m available over the spending review period to tackle tax avoidance, evasion and fraud.

"There are some people who seem to believe that not paying their fair share of tax is a lifestyle choice that is socially acceptable," Alexander told the Liberal Democrat party conference in Liverpool recently.

"Just like the benefit cheat, they take resources from those who need them most. Tax avoidance and evasion are unacceptable in the best of times but in today's circumstances it is morally indefensible.

"We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra."

The government said its new measures could help to recover £7bn a year by 2015 in taxes lost through avoidance evasion and fraud.

HMRC will be given extra resources to create a dedicated team of tax investigators to focus on offshore tax havens and online tax evasion, with a target of increasing the number of prosecutions for tax evasion to five times the current figure. Private debt collections will also be brought in to recoup tax debts.

Speaking on the BBC’s Andrew Marr show at the weekend, deputy prime minister Nick Clegg insisted the government was committed to ensuring that everyone paid their “fair share” of tax.

"You cannot ask millions of people in this country to have restraint in pay, to have their pensions looked at again because we are having to deal with the deficit and allow people who can pay an army of lawyers and accountants from getting out of paying their fair share of taxes."

Mixed reactions
Despite the government’s promises, not everyone in the accounting and business communities was convinced by these new plans.

“The problem with uncollected tax is not the peripheral issue that Clegg and Alexander are claiming – it’s systemic. That means only systemic reform will tackle this issue. And they’re not delivering that,” wrote Richard Murphy of Tax Research UK in his blog this week.

The conflation of tax evasion and tax avoidance was also a problem for many commentators, who suggested that those who work hard to create wealth shouldn’t be penalised in the same way as benefit cheats for attempting to minimise their tax liabilities within the confines of the law.

“Our job as tax advisers is just to see that our clients work within the law. But don't try to make doing so sound like a crime,” wrote AccountingWEB’s West Country blogger in his Practitioner’s Diary this week.

“One thing that upsets me is the hijacking of the word ‘avoid’. One should try to avoid taxes, not evade them,” British born entrepreneur Robert Gaines-Cooper, who has fought an epic battle against HMRC over the issue of his tax residence status, told AccountingWEB recently. “In the 2005, the government’s chief tax inspector said that from now on he would regard avoidance and evasion as the same thing – but of course they’re not. If a bus is coming down the road straight at you, you try and avoid it. Avoidance of taxes is the right thing to do (as long as it’s legal); evasion is illegal”.

However, according to John Whiting, tax policy director of the Chartered Institute of Taxation (CIOT), all “right minded” tax advisers should welcome the increased emphasis on tackling tax evasion. “Tax evasion is not a victimless crime. Cheating the Revenue robs the Exchequer of the money the government need to fund public services and makes us all suffer,” he said.

“More effort needs to be put into investigating and tackling people who seek to evade tax. Cutbacks at HMRC should not mean lessening of efforts to tackle evasion. Putting resources into pursuing newer forms of evasion such as cyber crime (or e-evasion) as well as the more traditional smuggling and hidden economy is sensible”.

“We can also well understand the desire to further tackle avoidance – but that should be put into the context of all the changes made in recent years, including  the disclosure regime and effective ‘Targeted Anti-Avoidance Rules’ (TAARs). Ever more complex rules risk becoming administratively burdensome for all concerned and even creating further loopholes. At the same time, a good deal of the supposed avoidance is dependent on obfuscation and concealment and is better classed as evasion,” he added.

 

Replies (33)

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By Gina Dyer
20th Sep 2010 15:27

More comments

Understandably, this story has generated lots of comments, so I'll try and keep this updated as they come in.

You can catch up with what members are saying about it in this Any Answers thread. Below is a comment that popped into my inbox just now.

John Cassidy, tax investigation and dispute resolution partner at PKF, comments: “HMRC has built up a mountain of information on offshore account holders over the past three years, but has so far failed to investigate many of the individuals involved. To date, it has just relied on making vague threats and offering tax amnesties to encourage people to come forward voluntarily and pay up what they owe.”

"Past funding problems have meant that the teams working on data obtained from banks have been reorganised every few months resulting in little real progress against determined tax evaders. This new funding should enable HMRC to finally get its act together and aggressively pursue those who have spurned chances to use either of the past amnesties: the Offshore Disclosure Facility or the New Disclosure Opportunity.

“It remains to be seen how effective the new HMRC team will be. But if it collects anything like the £7billion in additional tax revenue that the Government is predicting, that means an awful lot of people who don’t take the chance to put their tax arrears right now will be paying very large tax bills – and, some of them will wind up in court.”
 

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By malisajama
20th Sep 2010 16:09

Everyone avoids paying too much tax!

Both the last government and this one have vowed to clamp down on tax 'avoidance' - presumably as they deem it to be morally wrong. Yet, every (reasonable) person avoids paying too much tax. The problem is that politicians and their minions have equated 'avoidance' with 'evasion' for purely political reasons - in much the same way that Gordon Brown successfully blamed the recession entirely on 'casino bankers' when it was much more a failure of regulation and 'prudence'. It is rather depressing that the popular media have gone along with these falsehoods.

Our tax system is full of 'incentives' in the form of different tax rates or allowances. Presumably, each such incentive was created by government with the express purpose of encouraging the generation of income in certain ways. There would be little point in tax avoidance if all income was taxed at the same rate.

Now, forgive me if my logic is flawed, but it seems to me reasonable for anyone to minimise the tax they pay within the rules that successive governments have established. If the government of the day doesn't like the current tax rules then it should change them!

Now that 'avoidance' is a dirty word, what we need is a new word or phrase that means 'paying the correct amount of tax'. Perhaps we already have such a word in common usage: 'planning'. So, I would urge all tax professionals to use 'planning' wherever you might have used 'avoidance': both in writing and verbally.

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By malisajama
20th Sep 2010 16:40

The Daily Telegraph gets it wrong again

This illustrates my point exactly!

Danny Alexander paid the correct amount of tax based on the law. He did not take advantage of a 'loophole' (as The Daily Telegraph put it) but rather a legitimate CGT exemption that was created and supported by successive governments. The property was his main (and only) residence until 2007, when he was obliged to designate it as his 'second home' for Parliamentary purposes. He sold this property in 2009, well within the three-year limit. For most of the time he owned the property, he was not even an MP and therefore was not claiming any expenses for it. Most (if not all) of the capital gains occurred before he entered Parliament, so there isn't even a moral case to answer.

A much greater scandal than Parliamentary expenses is the huge number of overpaid quango jobs created by the last government and filled with Tony's cronies. The cost to us? About 1,000 times the cost of a few impoverished MPs 'maximising' their expenses.

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By johnjenkins
20th Sep 2010 21:53

Legal

You don't even have to use "planning". Just use "legal".

So it's "yes HMRC I have paid the legal amount of tax due".

Let's take this a stage further. Nick Clegg is clamping down on tax payers who pay the legal amount of tax. He is also clamping down on those that "evade" tax. My calculations seem to indicate that he will be clamping down on everybody, including himself.

 

Go for it Nick!!!!!!!!!!

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By Mike Carter
21st Sep 2010 10:47

Work more hours

It occurs to me that if I work 30 hours instead of 37 hours I'm paying less tax. Is that tax avoidance?

Maybe everyone should be made to work 48 hour weeks. Surely anything less is tax avoidance. Surely the only reason that anyone works 30 hours rather than 48 hours is to avoid tax!

Tax law defines in which circumstances tax is payable and how it varies between circumstances. If your circumstances match one scenario and not another is that wrong? If your circumstances change so that they match one scenario and not another is that wrong?

If they don't like the tax laws they can change them. Otherwise it seems unfair to rail against the way lawful taxpayers.

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By Gina Dyer
21st Sep 2010 17:54

Comments received

Richard Mannion, tax director, Smith & Williamson:

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"One of the factors that will undoubtedly have had an impact on the size of the tax gap in recent years is the massive reduction in HMRC’s headcount from approx 95,000 to 69,000, with more reductions expected. Moreover it would seem that HMRC has lost a disproportionate percentage of its more experienced staff. Bearing in mind that each trained inspector brought in extra tax worth many times their employment costs the decision to cut jobs seemed barmy.

"The impact of this loss of experienced staff can be seen in the various “tax amnesties” that have been offered in recent years. The bottom line is that whilst HMRC was in possession of warehouse loads of information about potentially undisclosed income it just did not have the staff to follow up, hence the decision to ask taxpayers to own up and do all the work themselves in return for a lower penalty.

"With that background it is interesting to hear that government now plans to spend £900,000 on setting up a new specialist enquiry team as part of their plan to reduce the tax gap by approximately 10% this year (£4bn) and there have also been anecdotal reports that Inspectors have been looking for some quick wins by being more inclined to reach pragmatic settlements to settle longstanding enquiries than before".

James Abbott, tax partner, Baker Watkin:

“I fear that Nick Clegg’s comments will find favour with the ‘average’ person on the street but genuine tax planning should not be frowned upon. 

“Many of the tax breaks are available to encourage certain behaviours, such as entrepreneurial spirit or using green cars, for example. 

“An accountant’s role is to make clients aware of the tax breaks available and assist their clients in making the most of them. There is nothing morally wrong with that.”

Cormac Marum, partner, Harwood Hutton Tax Advisory LLP:

“If our tax laws are not fit for purpose, it is the duty of Nick Clegg and his Coalition partners in government to make the changes they think are necessary and answer, in due course, to the electorate for their decisions. 

“It is dishonest to blame accountants and tax advisers for the problem. We don't make the rules, we simply try to understand them and apply them in the best interests of our many and varied clients.”

 

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By gilbertdeclare
22nd Sep 2010 01:33

MPs should set a good example

 

by repealing all legislation which gives them discriminatory favourable treatment over and above  other tax payers. The HMRC should publish  summary details of  how well MPs are meeting their tax obligations, how many are being investigated and how many are subject to civil and/or criminal actions.  

 

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By mydoghasfleas
22nd Sep 2010 11:32

“fair share” of tax

Can someone tell me what a "fair share" is please?

In another existence, training as an "Inspector of Taxes" my tutor said, "Never get drawn into a debate with a taxpayer (now a customer) over the fairness of tax.  You are responsible for administering the law and if Parliament legislates that you should tax blue eyes, you tax blue eyes!"

When someone speaks about "fair shares", it becomes akin to an irregular verb.  I pay too much, you should pay a little more, he/she/it should pay much more etc.

All the contributors know the difference between avoidance and evasion.  Unfortunately the media does not bother to distinguish.  The number of times you hear a financial reporters refer to a company as a firm is indicative of how little they think about what they write.  Politicians are not called to task over loose references in speeches.  The result is general confusion amongst the public.

 

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By The Black Knight
22nd Sep 2010 11:38

visiblity

A crack down on Evasion ! fantastic and good news.

The trouble is HMRC have no mechanism to spot tax evasion (even when it is placed in front of them) and would not listen to those of us who see it on a daily basis. To complete the task set by their political masters they set the dogs on tax avoiders who are visible who have not concealed their cunning plan.

This is not really that difficult,

One can only assume that there is an avoidance scheme to prevent addressing the problem of tax evasion.

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By Karen Watson
22nd Sep 2010 12:12

Behind Blue Eyes

(And there's a title that dates me <g>)

<<You are responsible for administering the law and if Parliament legislates that you should tax blue eyes, you tax blue eyes!">>

Let's take that the other way, as a tax relief:-

Compliance is when you claim and *have* blue eyes.
Avoidance is when you pay for contact lenses
Evasion is when you keep someone's else's eyes in your freezer :-)

 

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By lawmaniz
22nd Sep 2010 12:31

Tax avoidance.

Now that the UK coalition government has made the policy decision to make tax avoidance illegal and place it on a par with tax evasion, perhaps it should be (or already is?) a criminal offence for accountants (riff-raff and chartered) to give tax advice to clients as this is from now on likely to amount to a criminal conspiracy.

 

 

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By Bluffer
22nd Sep 2010 12:49

Avoidance and evasion of tax

In the past month I have socialised with my closest friends and over a drink each of them admitted that they are aware that  they are underpaying tax or have underpaid tax in recent years. One is self-employed and the others are regular employees. The underpayments are due to a variety of reasons, some honest errors, others arise through not understanding the law, and the remainder are just theft.

As a taxpayer, it concerns me that several people (basically selected randomly) are ALL underpaying tax. I wonder what proportion of taxpayers actually do pay the "right amount of tax"?

It also concerns me that HMR&C doesn't seem to have the resources to detect potential underpayments.

I think that I welcome the initiative that has been announced. Hopefully it will deal with and eliminate the large-scale evaders, and in time will move down the ladder and target smaller businesses and individuals.

In my experience, smaller businesses are well aware that they are under the radar, as HMR&C has its sights set on far larger targets. Cash jobs, over-claims of expenses, benefits in kind going unreported etc. are all very very common; much more common than most people would imagine.

Of course, I control my own clients so they are not at risk. But it does make me wonder whether all accountants actually know what their clients are up to.

I'm not attacking the profession, but something somewhere is very very wrong.

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By Gina Dyer
22nd Sep 2010 12:49

More comments

Clive Gawthorpe, Partner, at UHY Hacker Young:

“This is a huge increase in the tax gap at a time when the Treasury can least afford it. HMRC is already under immense pressure to bring in more tax. These figures will simply add to its woes.”

“HMRC now has a huge compliance burden on its hands. It recently indicated that it would contest fewer tax disputes in the courts, but whatever approach it adopts, it desperately needs to reduce the amount of evasion and avoidance.”

“The concern now is that HMRC will ramp up its compliance activity. This could mean more tax enquiries. Inevitably innocent taxpayers will get caught up as collateral damage.”

“Despite a raft of anti-avoidance measures during the last 13 years aimed at reducing corporation tax avoidance, HMRC appears to be losing the battle. With the recession having dented corporate profits, companies are looking for ever-more ingenious ways to reduce their tax liabilities.”

“You can’t help thinking that the labyrinthine complexity of the UK tax system, far from reducing non-compliance, has actually fuelled avoidance and evasion as well as genuine errors. This is something that the coalition needs to look at as a matter of urgency.”
 

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By Johhny
22nd Sep 2010 12:54

Tax avoidance

On the (possibly wild) assumption that when talking about "avoidance" the Government really means complicated schemes that rely on the grey matter that is a pushing the boundaries interpretation of legislation, treaties or words that a judge once said, how about the same Government declaring that it will not award consultancy contracts to accountancy practices that in any way engage in devising and selling such schemes?

I realise that the tecchies who sit in darkened rooms making them up might eventually hive off into boutique firms but that could easily be covered and they would still need support from their previous masters for quite some time thereafter.  

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By Donald2000
22nd Sep 2010 13:10

Tax Avoidance and Evasion

From what I can see of this announcement, it shows that the government are not at all sure what is tax avoidance and what is tax evasion and herein lies the problem.

As someone who has worked both in HMRC and does pro bono work for clients, from what I can see of it, avoidance is the attempt on the part of the taxpayer and his or her adviser to minimise the tax liability within the law, so if a client has legitimate expenses to set against income, any good adviser would attempt to offset them. Thats my argument about what it means to avoid tax; to get the best possible deal for the client using legitimate accounting principles.

It does not mean wrapping up liabilities which would be due under UK tax law and shipping them abroad so that they do not fall under UK tax jurisdiction, nor does it mean collating an elaborate package of measures to pay employees in Boots tokens or dividends, or deferred shares, or share options, or saying that someone else earned the money, or it was not actually credited, or any other mechanism. If these are tax avoidance mechanisms then my name is Aunt Sally. Of course they are evasion dressed up as avoidance.

We all know that the banks are some of the foremost creators of these clever "tax avoidance" packages and that there are also some pretty "high and mighty" people within this Realm that have indulged in this practices. To this end Richard Murphy is right: the figure is more likely to be over the £100BN mark.

Thats why I find it all pretty disgraceful that Danny Alexander has said that they have a cunning plan to pick up an additional £7BN worth of taxes over the five years. When the real amount owed to the Exchequer is 12 times that amount. What they plan to do is tokenism, no more no less. Until they entirely reorganise the Revenue and give it the teeth that it used to display in the 1980's, these "measures" are all pretty forelorn hopes in my estimation. Sadly this government does not really seem to have a grasp on any of it and they do not seem to be listening to us. I would suggest a Select Committee therefore whereby we could put our evidence as a profession and be taken seriously. This dithering and half hearted attempts at stern measures is causing a ripple of laughter round the United Kingdom and is just making us look soft and stupid. Very sad.

 

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By The Black Knight
22nd Sep 2010 13:29

Donald

I disagree, the foreign boots token avoidance is still avoidance if it is legal. i.e within the legislation.

I accept that some avoidance, may be morally unacceptable (depending on whos morals you are using) or not within the spirit of the law but that does not mean it falls to be evasion.

Avoidance is legal , evasion (dishonesty) is illegal.

Avoidance can be addressed by better drafted legislation. Evasion is just theft .

I would argue that some forms of avoidance actually serve a purpose in shaping our tax law.

after all tax law is a man made set of rules and continually changes not like a law of physics.

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By Donald2000
22nd Sep 2010 13:40

Evasion and Avoidance

Most avoidance is based on accounting principles; I am all for avoidance whereby there is a properly structured set of accounts so that one can follow what has been computed for tax purposes and I am sure that all of us will have been able to create an audit trail to identify to the Revenue what our mindset has been when we do a set of accounts.

I am not however prepared to tolerate schemes whereby people just devolve assets and payments abroard, or pretend they are non dom or non resident, as are their companies, just to evade paying UK taxation.

I dont think that HMRC can ever dictate to us what our accounting principles should be, except in the rare cases of depreciation (they call it capital allowances etc) BUT the use of accounting principles does not result in millions of pounds of company assets being put off balance sheet or devolved abroad. If it is and the Revenue can see it is, then they must act.

This leads me to surmise that there just is not the level of accounting expertise within the Revenue that is commonly trumpeted and we need to investigate this phenomenon. Otherwise we need to drastically simplify tax law so that Noddy and Big Ears can ubderstand it. Either way, something is rotten in the state of Denmark.

 

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By Chris Floyd
22nd Sep 2010 14:45

Am I missing something...

 

"...make £900m available over the spending review period to tackle tax avoidance, evasion and fraud."

Isn't this another example of the government wasting our money?

Aren't two of the functions of HMRC to detect and deal with tax evasion and fraud?  And isn't it parliaments job to look at tax avoidance and change the legislation to prevent avoidance that is deemed social unacceptable?

Why then do they need an extra £900m to do their jobs?

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By nekillim
22nd Sep 2010 15:56

Tax Avoidance

Should start with Philip Green

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By Donald2000
22nd Sep 2010 15:57

They are not doing the jobs

@Chris

 

Its obvious they are not doing the jobs; I dont think they have the staff available to do the jobs anyway. I dont think they are trained and qualified, except on HMRC in house courses, which dont teach anything except the segments which the officers will be required to know to tap on their keyboards and look at their screens. Its not holistic training and it does not give an overview of what is required within the jobs. They dont have accounting degrees, are not legally trained and most of them have not the faintest idea of tax principles. I have clients who have waited six months for their results to be confirmed. Its not rocket science that they dont know what they are doing in HMRC and those of us who have worked in HMRC and who are now qualified know that pretty well.

The difficulty in all this is explaining this to government, who also think they know what they are doing but are also as qualified as the average gnat.

Unless and until we are able to get rid of all these ignorant people and train them in the ways of accounting, which is never going to happen, then we are going to continue to be the government's unpaid advisors. The HMRC would collapse without the profession and I think they should hold a Select Committee of enquiry into the dogs breakfast which is the HMRC and ask some of us to attend, so that we can put them straight on what is required and for them to stop playing the giddy goat.

 

£900M indeed........

 

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By cymraeg_draig
22nd Sep 2010 18:41

To much tax

I'm not attacking the profession, but something somewhere is very very wrong.

 

Posted by Bluffer on Wed, 22/09/2010 - 12:49

 

The simple fact is that we are the most heavily taxed western nation.

I'll pose a simple question - lets say that you were offered a way to steal with a 99.9% certainty of getting away with it. 

Would you take the chance for, say £20 ?   No - not worth it.

But ask yourself, would you take the chance for a 99.9% chance of getting £1million - quite possibly - I believe most people would.

That is the problem - the level of taxation in the UK is so high (thanks to Brown) that it is now worth fiddling.

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By SXGuy
22nd Sep 2010 23:12

Tax Avoidance is legal, get over it.

If i hear one more time, the word "avoidance" being used in the same context as "evasion" i will go mad.

One is illegal, one is not. How HMRC have the cheek to clamp down on Accountants and the like advising people on how to pay "the right tax" (I say the right tax because to much is never right) is beyond me.

Its about time we stood up for what is right, and over paying tax is not, so why is paying the correct amount wrong?

If people evaid tax through legal loopholes, fix the law, but do not for one moment come down hard on people who are genuine and use the tax system to pay what they owe, not what others think they should owe.

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By mikewhit
23rd Sep 2010 08:04

Thinking must have changed between 2002..04 - VAT guide updates

Anyone recall the change in wording in the VAT Guide:

" "VAT Guide - Notice 700 April 2002" and associated "Update 2 to Notice 700 - Feb 2004".

The update is a set of amendments to the original booklet, including the following:

>>
2 Administration of VAT
2.3 Tax avoidance

Delete the first two sentences from "Tax avoidance is [not illegal] ..." up to "... tax simplification measures"
and replace with "Tax avoidance is the use of contrived arrangements or structures to achieve a tax advantage - an increase in tax recovery, a reduction in the tax due or a tax deferral - contrary to the purpose and spirit of the legislation. Tax avoidance puts at risk Government revenues. It can also give a business an unfair advantage over others and threaten tax simplification measures."
<<

So in other words they withdrew their assertion that tax avoidance is not illegal and replaced it with a lecture about the "evils" of tax avoidance !

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By North East Accountant
23rd Sep 2010 08:38

HMRC try for soft targets.

I agree whole entirely with malisajama and sxguy!

We all understand it suits HMRC purposes to muddy the water between evasion and avoidance.

As no one has said it yet so I quote

Lord Cylde (1929 case of Ayrshire Pullman Motor Services V Inland Revenue) "No man in the country is under the smallest obligation, moral or otherwise, so as to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest shovel in his stores"

and

Lord Tomlin (1936 case of Duke of Wellington V Inland Revenue) "Every man is entitled, if he can, to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be"

End of story HMRC.

 

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By ronmorris23
23rd Sep 2010 08:41

Tax avoidance/evasion

Tax evaders should be pursued with vigour as with any other criminal activity. 

Tax avoidance is down to sloppy legal draftmanship and a tactic approval by those 'in charge' to allow it! 

'Tax cheat' - equals weak terminolgy.

 

Ron Morris

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By malisajama
23rd Sep 2010 16:24

Avoid 'avoidance'

"Tax avoidance is the use of contrived arrangements or structures to achieve a tax advantage - an increase in tax recovery, a reduction in the tax due or a tax deferral - contrary to the purpose and spirit of the legislation." - Feb 2004

So, in 2004, the government changed its definition of tax avoidance to mean using entirely artificial methods to reduce one's tax liability. This is the definition used by government agencies and politicians ever since. However, the accounting profession has continued to use the previous definition: legally arranging one's affairs to minimise one's tax liability.

The problem is that ordinary people never understood and still don't understand either meaning. To most people, 'avoidance' sounds very similar to 'evasion': they could even be synonymns. The subtle but important distinction is lost on them, which makes it easy for politicians to muddy the waters.

I don't think we have any chance of rescuing the original meaning of the word, which is why this profession needs to be realistic and use a new word in place of 'avoidance'. I have suggested 'planning' as it is already in common usage.

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By mydoghasfleas
23rd Sep 2010 16:32

Who should be targeted?

A colleague was taking a tribunal case recently.  A chat ensued with the HMRC representative after the hearing with the normal putting the world to rights.

A question asked was, "rather than pursuing the Phillip Green's who were probably behaving completely legitimately and paying the right amount of tax under the rules, would HMRC's time not be better spent with the Fred's and Joe's working in the "hidden" economy or simply skimming cash out of the books?  The average Inspector would get far more out of these than a whole team of Inspectors working on one individual who was properly advised on tax planning."

If anyone is still reading, the curious thing is that the question was posed by HMRC after mentioning that it was the Inspectors who did the enquiries into the small and medium size businesses and pulling in their own costs 6 and 7 times over that were being eased out.

I know it is all very well saying that it is picking on the little person but it has a policing effect.  The only successful zero tolerance schemes have succeeded by starting with the small things that earn the law and its enforcers respect before moving on to the big ones.

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By Donald2000
24th Sep 2010 18:52

As above

The point of what I am saying is that they are trying hard neither with the little man, or the big man. They would no sooner go after the taxi driver who is evading paying tax than Philip Green. In short HMRC have lost their way and have lost the will to either collect tax or assess tax. They are as much the product of the soundbite generation as the politicians.

I dont know why we keep making excuses for them, I really dont. This Department needs to be radically hauled into shape. I cannot see the present government doing it, anymore than NuLab had the will to do it. Unless and until we can do this, then HMRC will continue to be a dead man walking with all the resultant chaos that this will bring for the Exhequer.

Oh hang on a minute; no further problem. I am sure their mates at NatleysBarclaysHSBCLloyds will give them a few more quid in return for bonds. Case solved. Phew, thank the Lord for that,

 

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By tedbuck
27th Sep 2010 10:50

TAX EVASION

Every one in Government thinks tax evasion is the prerogative of the rich but this is far from the case. Generally the rich can afford to pay their taxes and do so relatively philosophically. Yes they will take care not to pay more than their need but that is surely only reasonable.

The people who are professional tax evaders are the tradesmen, the plumbers, decorators, carpenters and general handymen who will do your job for you but won't give a receipt and want to be paid in cash. Firstly they avoid tax and NIC and then they claim tax credits because their income is low so that we subsidise them twice. Does HMRC want to know about this? No they don't - because it might take a bit of effort. But it doesn't all they have to do is look at the low earning self employed and google their addresses and then look at the value of their property and the rating list and the results will be self evident in most cases. Google maps even gives you a pretty picture of the £500,000 house that the £7,000 a year tradesman occupies. It can't be much easier than that can it? My apologies to the honest people included above because there are many of them but there are a huge number who are playing the system because HMRC are so inept and the system is so badly designed that it has few checks and balances.

If you don't believe me try getting a decorator or plumber in London to give you a receipt for work done. Blood from a stone isn't in it.

 

FEDUP TAXPAYER

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By The Black Knight
27th Sep 2010 13:18

hear hear ! Ted

and it's not just london either.

The government have no idea how much is missing ! Which is why my tax bill is so high ! to make up for these bloodsuckers.

You are right HMRC do not even seem to care, tax investigations should/could be the most effective use of HMRC time and very profitable.

Would we have a deficit even ?

Frustrating isn't it.

Especially as it is quite obvious from the accounts in many cases.

would they listen ? mmm

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By johnjenkins
27th Sep 2010 17:19

Ted

How many plumbers live down millionaires row?

As it happens HMRC do have the knowledge as to someone earning £7k and owning a £500k house and yes they do use it.

Where do you think the dodgy trades people learned how to be dodgy??????? Possibly from the dodgy rich people who they are doing the work for so they don't have to pay the VAT etc. etc.

All in all the "cash in hand" scenario doesn't affect the tax intake very much. Reason being that most cash dealings go back into the real economy in one way or another. You can't do much with cash except spend it. 

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By mikewhit
01st Oct 2010 09:52

Enumeration

Well, they could do a lot worse than just to check that they have an active tax record for every person on the electoral roll, or a valid alternative eg. unemployment registration.

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