Crossing the line from avoidance to evasion

There is a serious enforcement gap in HMRC’s approach to tackling tax fraud whereby criminal tax behaviour is systematically dealt with through civil channels as long as it has the superficial appearance of tax avoidance finds a new report from the All-Party Parliamentary Group for Anti-Corruption and Responsible Tax and TaxWatch.

The report Putting a stop to the tax fraud game explains that even if the tax is recovered the underlying criminal behaviour goes unpunished. As a consequence unscrupulous advisers promoters and enablers face no serious downside risk in selling aggressive avoidance schemes to taxpayers.

Dame Margaret Hodge chair of the APPG said: ‘The myth that tax avoidance is legal and tax evasion is illegal is a false distinction which is reinforced by the tax industry and HMRC’s feeble approach to enforcement. Our bold new paper attempts...