An article in the Times yesterday very accurately described the motivation behind the HMRC 'crackdown' on both individual and corporate tax avoidance. It's worth reading, simply to understand (with crystal clarity) the motivation behind the persecution we are experiencing.
The article is titled "Osborne 'relies on tax cash to fill black holes'" and appears on page 45 of the Times yesterday (Monday 3rd December 2014). I cannot reproduce the whole article (for copyright reasons), but, I have summarised below - and, for those who subscribe to the Times on-line, here is the link to the full article:
Osborne
The article states that the Office for Budget Responsibility (OBR) will publish a review into whether the government's revenue-raising estimates from anti-avoidance measures can be relied upon. The OBR is expected to raise concerns about the Treasury's growing reliance on these measures to balance the nation's books. The articles states that George Osborne has used anti-avoidance increasingly to bolster the public finances in each of his budgets and autumn statement's since 2012. The Chancellor has leaned heavily on tax avoidance income to fill the black hole in public finances, which the OBR (said yesterday) has grown by about £10 billion this year - and is expected to unveil another £1-£2 billion (yesterday). In a letter to the Treasury last June, Robert Chote (Chairman of the OBR) said: "The yield from anti-avoidance measures is generally more uncertain than that from other policy measures". Chris Sanger, head of tax policy at EY, said: “It is right that the OBR is raising questions about these revenues, as they are inherently difficult to estimate".
There are two inescapable conclusions:
(1) No matter what the Government or HMRC may say to the contrary, the over-riding motivation behind the oppression that we are experiencing from HMRC is not a legal objection (i.e. tax planning and avoidance breaks laws), neither is it a moral objection (i.e. tax avoiders don't pay a fair share) - it is financial (i.e. the Government needs to balance the budget ...), and political (... because then it will get re-elected).
(2) This Government is gambling that receipts from this persecution will go a long way to balancing future budgets.
In my opinion:
(A) The Government and HMRC may find that alienating 40,000+ intelligent, hard-working, honest voters (plus the employees of 10,000+ companies under threat) will have serious legal and political consequences both next May and beyond, and
(B) The OBR is correct - the revenues ultimately realised will be fraction of that estimated by the Government/HMRC. I say this with some (minor) inside knowledge - I personally know six contractors who are being chased for tax as a result of membership of EBT schemes. Of those, one has settled (for a relatively small amount), one will probably settle when the FN/APN arrives, and the other four (including myself) will not pay (mostly because they can't, and never will be able to) and they will tough it out to the bitter end - which may include personal bankruptcy and/or moving abroad permanently.
Thoughts ?
The article is titled "Osborne 'relies on tax cash to fill black holes'" and appears on page 45 of the Times yesterday (Monday 3rd December 2014). I cannot reproduce the whole article (for copyright reasons), but, I have summarised below - and, for those who subscribe to the Times on-line, here is the link to the full article:
Osborne
The article states that the Office for Budget Responsibility (OBR) will publish a review into whether the government's revenue-raising estimates from anti-avoidance measures can be relied upon. The OBR is expected to raise concerns about the Treasury's growing reliance on these measures to balance the nation's books. The articles states that George Osborne has used anti-avoidance increasingly to bolster the public finances in each of his budgets and autumn statement's since 2012. The Chancellor has leaned heavily on tax avoidance income to fill the black hole in public finances, which the OBR (said yesterday) has grown by about £10 billion this year - and is expected to unveil another £1-£2 billion (yesterday). In a letter to the Treasury last June, Robert Chote (Chairman of the OBR) said: "The yield from anti-avoidance measures is generally more uncertain than that from other policy measures". Chris Sanger, head of tax policy at EY, said: “It is right that the OBR is raising questions about these revenues, as they are inherently difficult to estimate".
There are two inescapable conclusions:
(1) No matter what the Government or HMRC may say to the contrary, the over-riding motivation behind the oppression that we are experiencing from HMRC is not a legal objection (i.e. tax planning and avoidance breaks laws), neither is it a moral objection (i.e. tax avoiders don't pay a fair share) - it is financial (i.e. the Government needs to balance the budget ...), and political (... because then it will get re-elected).
(2) This Government is gambling that receipts from this persecution will go a long way to balancing future budgets.
In my opinion:
(A) The Government and HMRC may find that alienating 40,000+ intelligent, hard-working, honest voters (plus the employees of 10,000+ companies under threat) will have serious legal and political consequences both next May and beyond, and
(B) The OBR is correct - the revenues ultimately realised will be fraction of that estimated by the Government/HMRC. I say this with some (minor) inside knowledge - I personally know six contractors who are being chased for tax as a result of membership of EBT schemes. Of those, one has settled (for a relatively small amount), one will probably settle when the FN/APN arrives, and the other four (including myself) will not pay (mostly because they can't, and never will be able to) and they will tough it out to the bitter end - which may include personal bankruptcy and/or moving abroad permanently.
Thoughts ?
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