Middle-class tax avoiders target of new clampdown


The Crown Prosecution Service is joining HM Revenue & Customs in a new initiative to reduce middle class tax evaders who push or invest in dishonest schemes.

Director of Public Prosecutions Keir Starmer is expected to unveil plans for a fivefold increase the number of tax files handled by the CPS to 1,500 a year by 2014-5.  This is expected to significantly ‘ramp-up’ the breadth of its coverage and provide more resources to target consultants who push dishonest schemes and those who invest in them.

It is estimated that such tax avoidance schemes cost the British taxpayer the equivalent of £533 per household per year.

The CPS’ current conviction rate is 85% and in 2010 they secured over 200 convictions against tax evaders.

Multinational companies are also being investigated over £1bn of UK taxes that may have been avoided by transferring profits earned in the UK to parent companies or lower tax jurisdictions.

HMRC’s Large Business Service is stepping up it’s scrutiny of companies such as Amazon, Google and Facebook after a series of  high profile tax avoidance cases last year.

They will be particularly investigating an accounting method known as transfer pricing which can involve a parent company charging it’s regional divisions in the UK a royalty fee for its brand name and corporate marketing benefits whilst payments are directly transferred to the head office overseas.

Over the last 12 months HMRC have investigated £1bn worth of assets involved in transfer pricing, representing an increase of 47%.

The government has recently increased the resources to investigate potential tax avoiders and many different groups such as tradesmen, the self-employed and online traders have found themselves under increased scrutiny by the taxman. 

However, despite the increased publicity that tax avoidance has received over the past 12 months, it should be remembered that there may not be more evasion around than there used to be - rather that with the government under pressure to bring in more revenue, they are becoming more determined in tracking down those who have not been paying their fair share.

 


  • Date posted:
    21/01/2013
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