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HMRC claims £2bn from tax avoiders

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HM Revenue & Customs has taken more than £2bn from tax avoiders since the launch of new accelerate payment rules introduced by in 2014.

The measures, introduced to collect disputed tax while affairs are being investigated, build on HMRC’s track record of winning 80 per cent of avoidance cases that go to court.

The tax office has now issued more than 41,000 accelerated payment notices since the launch of the scheme, and expects to have raised over £5bn by March 2020.

HMRC is now issuing more than 3,000 notices every month.

Treasury financial secretary David Gauke describes the accelerated payment scheme as “a game changer”.

He says: “HMRC already wins the vast majority of cases that go to court and now HMRC has taken more than £2 billion from tax-avoiders who would have otherwise benefitted from that cash while they were being investigated.

“It should be absolutely clear to anyone who is tempted by these schemes that tax-avoidance does not pay.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Great to see HMRC going after the relatively small fry here – average case under £50,000. They can celebrate with a nice coffee from Starbucks perhaps?

  2. Paul, tax evasion is tax evasion and some of these schemes are just stupid and immoral – we all use hospitals, schools and there I say infrastructure.

    It always amazes me how tax avoiders justify it by saying that they give large amounts of money to charity. It’s funny that we never see paying tax as a needy cause.

    • And that is exactly the poor judgement that HMRC seems to be applying when grouping these cases together, as there are many difference types of cases.

      Tax evasion is illegal and should be subject to criminal prosecution in addition for the APN action.

      Tax Avoidance is LEGAL and a good portion of people on here contribute towards that in advising clients to invest in product A not product B. How would we all feel if suddenly every IFA was accused of aiding tax avoidance by helping people plan IHT with Trusts or Sipps etc.

      Howeer HMRC wouldn’t look very good if they said that actually they’ve only taken a handful of cases to court since the mid 2000s and the core of the £2b hasn’t come from those cases directly, but from bullying individuals within the schemes rather than the schemes or companies providing the advice.

  3. Thank you for the patronising comments Peter. I am well aware of what tax evasion is and why we need hospitals.

  4. Peter, article was about avoidance and not evasion!

    We all use tax avoidance to a certain extent as for the morality, well that is very subjective!

  5. We have moved on people! There is no longer a black-and-white distinction between illegal tax evasion and legal tax avoidance.
    The landscape is now three-dimensional; divided between illegal tax evasion, legitimate TAX-PLANNING using the explicitly laid-down reliefs such as ISAs, pensions, VCT / EIS, etc., and ARTIFICIAL TAX-AVOIDANCE using contrived schemes that pick out various parts of the tax manual, stitch them together in a (frequently) obtuse way that only the promoters and clever tax accountants can understand, and market them to unsuspecting punters who are told that they can obtain tax-relief via these schemes in ways that Parliament never intended.
    The Government has tasked HMRC with cracking down on the third are and clawing back tax-relief that many of these artificial schemes have claimed in the past.
    This is not to say there isn’t a problem and HMRC hasn’t gone too far (or they wouldn’t lose 20% of cases), but this reflects what I call the ‘pendulum principle’. This states that when you try to counter a problem that has gone to an extreme, like a pendulum you will not come back to equilibrium at the first attempt, but like a pendulum, will at first move almost as far in the opposite direction.

  6. I find some of the distinctions within Tax Avoidance somewhat phoney.

    All of these things are done to legally avoid tax. A cash ISA as much as any of the others.

    The real reason to use a Cash ISA rather than a standard Bank deposit is tax.

    Trying to make this distinction is purely spin. Nice people like us only do nice tax avoidance.

  7. Paul and John

    There is a vast difference between using an ISA, pension or even an investment bond to some of the schemes available by certain tax planning accountants and financial adviser.

    I’m sorry but I really do have a problem, when I see a celebrity lecturing people why we should give money to charity when that same celebrity has used some fancy trust structure to funnel money through Belize or even Bermuda to zero their tax bill. See Channel 4 program How the rich stay rich.

    Do I feel sorry for the individuals who used Eclipse 35 for example the answer to that is NO.

    I hear an awful lot from unauthorised and unregulated tax planners who state that some of these schemes are being checked out by Queens Counsel when in fact no such check has been carried out.

    If you cannot see that this is wrong and immoral and when these schemes start to become chargeable on the FSCS I hope advisers like you agree to pay a higher level of fee.

    For everybody who might say that tax planning is not regulated activity nor was advice in connection with Harlequin Property but we still ended up paying higher fees.

    It is the duty of every IFA to give sensible tax planning advice but it isn’t our job to go out of the way to deliberately break the tax system to the detriment of everybody.

    Eclipse 35 investors are already seeking compensation through FSCS.

    http://www.professionaladviser.com/professional-adviser/news/2425469/fscs-tax-claims-relate-to-advice-in-noughties

  8. All this yet again rather misses the point. Tax avoidance is legal, tax evasion is not. It is no good getting huffy if those with the wherewithal employ clever people to legally minimise or negate their tax bills. The problem lies with the fools in Westminster. On the one hand they want to trawl as much tax as possible and on the other want to make the UK attractive to foreign investments. As the CEO of Google has said, the UK tax system is a mess. It is up to Government to sort it and understand the difference between avoidance and evasion. (As should journalists, not to mention advisers!)

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