Should the government grant a general tax evasion amnesty?

A recent survey by Crowe Clark Whitehill has discovered that more than 75% of UK accountants favour the idea of a general amnesty for tax evaders.

Accountants from 97 firms were questioned about the LDF and the Anglo Swiss tax agreements and found that most preferred the idea of a General Disclosure Facility. In fact 79% said they would refer a GDF to their clients.

The most important feature of a GDF would be the guaranteed immunity from prosecution according to 33% of respondents. The promise of low fixed-rate penalties was thought most important by another 31% of accountants.

HMRC introduced the Liechtenstein Disclosure Facility in 2009, but 40% of accountants haven’t mentioned it to any of their clients.

Sean Wakeman, from Crowe Clark Whitehill, said the results of the survey clearly indicate that the time is right for the government to introduce a general UK tax amnesty and accountants would be happy to promote such an amnesty to all of their clients.

If a general domestic tax amnesty was sold correctly, it could raise billions of pounds for the Treasury. According to the Revenue, £14.5 billion in direct taxes went uncollected in 2009-10. Direct taxes include capital gains tax, income tax and national insurance. Wakeman believes that a general amnesty would redress at least some of this imbalance.

The present government is determined to stamp out both tax evasion and tax avoidance, but the consensus among the accounting profession seems to suggest that it is going about achieving this in the wrong way.

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