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The Government's plan to ramp up the fight against tax dodging with a multi-million investment has been welcomed by the Chartered Institute of Taxation (CIOT) as a 'sensible' move.
The chief secretary to the Treasury, Danny Alexander, yesterday announced to the Liberal Democrat conference that extra resources are to be made available for tackling tax avoidance, evasion and fraud.
He revealed that £900 million will be put aside over the spending review period to fund measures including:
- a fivefold increase in the number of criminal prosecutions against tax evasion;
- a crackdown on offshore evasion, with the creation of a dedicated team of investigators to catch those hiding money offshore;
- a tougher stance on evasion and avoidance by those liable for the 50% tax band;
- further investment in in-house collection capacity to increase HMRC’s internal debt collection rates; and
- more registration checks to stop people claiming tax repayments when they are not due.
The CIOT's tax policy director, John Whiting, responded to the news by saying ‘all right-minded tax advisers will welcome this increased emphasis on tackling tax evasion’.
He added that his organisation ‘has long argued that 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, as well as the more traditional smuggling and hidden economy, is sensible.’
Mr Whiting acknowledged the Treasury’s proposal to better tackle tax avoidance, saying it is an understandable desire, but that it ‘should be put into the context of all the changes made in recent years, including the disclosure regime and effective targeted anti-avoidance rules.
‘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,’ commented Mr Whiting.
