Tax evasion crackdowns: they don’t work, but HMRC won’t stop

Industry news roundup: week ended 10 Oct 2013:

I’m not here to say that tax evasion isn’t a problem in the UK right now, but HMRC is going the wrong way about it – and I’m not the only one that thinks so.

In fact, new estimates from a recent research study revealed that there’s nearly £18 billion lost every year because of tax evasion, but much of it – almost £13 billion – is likely to be accidental. Instead of tough crackdowns, perhaps it’s time to have a tax amnesty instead, which would go much further in reclaiming those billions in tax revenue than going after tax evaders on a case-by-case basis.

The survey found that an overwhelming 96 per cent of accountancy experts felt that an amnesty would be a brilliant idea. Additionally, more than 8 out of every 10 survey respondents said that the amnesty offer would be smashing for encouraging disclosure, as taking away the threat of investigation and penalties would make it easy for people to come forward and settle up their accounts.

Of course HMRC isn’t hearing any of this, which is absolutely mad considering that even though last year saw the amount of tax reclaimed from small firms went up by 31 per cent, it still only accounted for £565 million in tax revenue according to another report released recently. This is truly just a drop in the bucket compared to that £13 billion figure, isn’t it?

Not only that but let’s be honest here – employing tens of specialised taskforce teams to investigate tax evasion costs money, and with the Government already on austerity measures can we really justify spending money to bring in such pocket change when there’s literally billions to be made by simply declaring an amnesty? Not only that, but why is the taxman targeting small businesses so much? Why can’t they go over large multinationals that funnel hundreds of millions overseas to the Cayman Islands or some other similar tax haven? Instead they have to go after the little bloke trying his hardest to contribute to the economic recovery?

I swear it’s enough to send you round the bend, especially when you can see that there’s an easier and less expensive way. For what it’s worth, I think that HMRC and the Treasury have to pull their heads from their proverbial arses and start thinking clearly about mending the shambolic economy before it’s to far gone to do anything about!

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