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HMRC attitude
Well, since HM Customs & Excise amended the wording in their VAT handbook in 2004, to remove the statement that tax planning was lawful, all planning is presumably now criminal:
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."
("VAT Guide - Notice 700 April 2002" and associated "Update 2 to Notice
700 - Feb 2004")
Glad to see the Institutes' responses
In accountancy age:
http://www.accountancyage.com/accountancyage/news/2149130/institutes-slam-taxman-slur
it is reported that the Institutes have condemned the attitude of the Revenue, or more specifically David Varney, on this.
Name the tax advisors involved
Perhaps HMRC could name the tax advisors of MTIC fraud cases for everyone's benefit ?
This way only those with poor client ID procedures would be labelled appropriately rather than all advisors.
I'm all for punishing the guilty (and very severely indeed), the problem is HMRC's scattergun approach harms the innocent as well as the guilty.
And I don't like this idea that MTIC fraud is considered to be tax planning / avoidance as opposed to the fraud that it is.
Storm in a tea cup?
It seems highly unlikly that any of these firms will be able to do anything to prevent the MTIC problem anyhow.
I was going to head my article "Revenue accuse accountants of conspiracy to de-fraud: Do we look bovvered?"
The bigger picture is that we all suffer from HMRC's inability to prevent these sort of international scams.
Not exactly an apology
Was that clarification about his comments? As a fairly average tax adviser I do not view fraud as a tax planning scheme, which I think would land me in jail for up to 14 years. I don't think I'm on my own with that one either. Mr Varney I'd like a proper apology - people that think MITF is tax planning should be correctly described as criminals, not tax advisers. Personally I can't think of any tax advisers promoting MITF - but I can think of a few frauds that have been committed by Revenue employees over the years.
Actually, I had put in a comment which I think was
accidently edited out of this to say that MITC fraud is devised by criminals, and presumably some of those who create or mastermind these types of fraud have a tax background.
Given the complexity of some of these carousels, you cannot deny that accountants may be partly responsible, and yes, HMRC employees could be too.
Varney is just stating the obvious. The problem is that we don't know who is perpetrating this type of activity, and HMRC have to clutch any straws that they can.
Excuse me?
Let me get this straight. The Big 4 have said:
"advise such of our clients to whom this would be relevant " twice
"encourage those of our clients who could be affected" and then refer to risk assessment etc.
So are they going to shop those clients or resign the accounts? Apparently not, even if they could be construed to be conspiring to commit crimes.
You gotta ask where's the integrity in that?