Tax avoidance – no more than cheating

Over the past decade the distinction between 'tax avoidance' (a legitimate way to minimise one's tax liability) and

'tax evasion' (a criminal offence) has become increasingly blurred.

The phrase 'tax cheats' is also now part of common Government parlance. Qdos Consulting gives their view on the latest developments.

Qdos Consulting writes:

On Monday, September 21, Stephen Timms, Financial Secretary to the Treasury addressed an international conference on institutional taxation analysis. His speech included some further insight into HMRC's attitude towards tax avoidance and the war that the Department intends to wage upon those who indulge in the dark art.

He said: "Today I am highlighting recent action, domestically and internationally, that changes the game for those who bend the rules on tax, and for those who break them…" and "….I want it to become increasingly clear to taxpayers and tax agents that for tax cheats, the game is up". .

In conclusion, Mr Timms stated:

• "We are today in a different world for tax…."
• "We will continue to help the vast majority who want to live up to their responsibilities. But those who try and cheat will find themselves increasingly isolated: by their peers; by Governments; by the international community – as the G20, and, in Britain, our pre-budget report, will show."
• "The changed strategic context should be clear. Tax cheats need to think again."

These comments coupled with the tone of some of the language in the first drafting of the Taxpayer's Charter only further demonstrate that HMRC believe that those who engage in deliberate bending of the rules, taking avoidance to the limits, are just as much 'tax cheats' as those who intentionally evade tax and break the rules. It is understood that this mentality will bear further witness in the Pre-Budget Report which may well spring some surprises.

It is somewhat ironic that a politician should liberally use the word 'cheat' to describe those who seek to skirt around the rules and the system.

Takes one to know one!

Qdos Consulting