The government have set out plans to discover the names of rich individuals that are engaged in tax avoidance schemes. The plans will give HMRC more power to drag details out of the accountants who offer these schemes to their clients and the people involved in operating them.
By allowing taxmen to retrieve information on those behind the schemes, they can track down the people responsible and make them accountable even if companies are dissolved, move over seas or disappear through other means.
There were fears that these new powers would result in government officials producing lists of tax avoiders, but it has been confirmed that the information will not be made public. The identities of people using the schemes will be kept by HMRC and used to ensure that all the taxes are paid by the people on the lists.
The Treasury Minister, David Gauke, announced the plans in a speech in which he said he had “little sympathy” for those who avoid pulling their weight in society, especially when the financial situation is what it is. It’s not just the failure to pay tax though; Mr Gauke went on to say “They harm businesses by distorting competition. They damage public confidence and they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride.”
He warned that those behind the schemes had plenty of ways to avoid detection and were always ready for a fight, keeping money aside specially for prolonged legal battles. The new powers were necessary so the HMRC could compete with these firms and bring both those responsible and those who use them to account.
Public anger at tax avoidance has surged in recent years, and the revelations that Jimmy Carr was engaged in a scheme to pay less tax grabbed headlines throughout the UK a couple of months ago. With these new plans soon to be implemented, what difference they make and whether there is a noticeable increase in the amount of tax the rich pay will be carefully observed.