Revenue chief warns of "ruthless" crackdown

Inland Revenue Chairman, Nick Montagu, has announced a "ruthless" crackdown on 'artificial tax avoidance' schemes.

Speaking at the annual lunch of the Chartered Institute of Taxation (CIOT),

Mr Montagu said: "The link between taxes and the social goods that would be impossible without them is the very foundation of tax morality and cannot be stated too often. The public at large resents large-scale avoidance as dodging the contribution to the UK's needs. So we will continue to provide

Ministers with the advice and support they need to block avoidance measures promptly."

The Revenue chief warned his department would be ruthless in pursuing individuals and companies "who persisted in dodging their obligations.

"We simply cannot afford to go soft on fraud and avoidance, nor will we be doing so. We will scrutinise artificial schemes very carefully to see whether they involve dishonesty and warrant prosecution. That means help and support to get things right - and a tough response to those who still won't," he said.

The announcement comes just two months after the Revenue published new legislation to amend regulations governing the use of Employment Benefit

Trusts (EBTs).

The Treasury announced the introduction of IR35 in 1999 to counter what it saw as tax avoidance by freelancers.

In August, 2001, Chancellor Gordon Brown announced the Treasury would mount a crackdown on what he called 'the bogus self-employed,' starting with those in the construction sector.