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Middle-classes to face tax crackdown

The head of the Crown Prosecution Service says his agency has aimed its sights on 'middle-class' tax evaders.

Middle-classes to face tax crackdown

Middle class tax avoiders will be targeted in a new crackdown by the Crown Prosecution Service (CPS).

Keir Starmer, director of public prosecutions, will set out a new hard-line approach to ‘dishonest tax avoidance schemes’ in a speech tonight.

The CPS is asking for more funding from the government to reach its target of increasing tax evasion prosecutions five-fold to 1,500 a year by 2014/15. Lawyers and accountants using illegal schemes to evade tax and those using complex schemes to legally avoid tax will both be targeted.

Starmer will say: ‘Let us bury – once and for all – the myth that tax evasion is a victimless crime. We all pay for it in the end, directly or indirectly.

‘Tax evasion is not a victimless crime. It is not a ‘fiddle’ in some sort of legal grey area. It is ordinary fraud involving dishonesty and greed. And we all pay for it.’

The government has already vowed to tackle those who are working outside of the letter and the spirit of the tax laws, following public outrage at the avoidance schemes used by celebrities and businesses to side-step tax bills.

Starmer said the CPS and HM Revenue & Customs were not just tackling illegal evasion but also avoidance by middle-class professionals.

‘I want to highlight an important breakthrough in another part of the prosecutorial forest, namely the ability of HMRC and the CPS to extend the reach of the criminal law by including a further category of offender in the list of successfully prosecuted cases – namely, those who devise and operate sophisticated schemes to abuse direct tax regimes: dishonest tax avoidance schemes,’ he will say.

‘These cases typically involve highly intelligent individuals, not infrequently skilled professionals with close knowledge of the tax laws, who go to great lengths to dress up a dishonest ad fraudulent tax evasion scheme as a legitimate investment scheme attracting tax relief or other tax advantages.’

Richard Jordan, partner at law firm Thomas Eggar LLP, said the tougher stance being adopted by the CPS was welcome but said more money needed to be targeted on tax avoiders.

‘Keir Starmer has perhaps realised that the CPS contribution to improving tax collections has lacked positive PR in recent times. Losing the Harry Redknapp case was a big blow and one which, if won, may have had the same impact that the imprisonment of the late Lester Piggott had all those years ago.

‘When Starmer says he is going to get tough on tax fraud, it is implied that in recent times they have been more lenient or lacking in resource. I welcome the decision and agree that the threat of prosecution and possible imprisonment needs to be real.’

Jordan added that ‘the token extra funding announced before Christmas [to target tax evaders] was not enough, if there is any money earmarked for investment in UK plc, please earmark a good chunk to the enforcement arm of HMRC.’

13 comments so far. Why not have your say?

Alasdair Lawrance

Jan 22, 2013 at 17:00

Item 1: Vodafone. Item two: that retail chap whose wife lives in Monaco or somewhere and gets all the profits delivered to her on a silver salver as 'dividend income'

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Jan 22, 2013 at 17:37

This PR statement by HMRC confirming they are to crack down on those not 'paying their share' seems to be targeting both tax evaders (illegal) and tax avoiders (legal). Personally, I think it is a waste of tax-payers money chasing legitimate tax avoiders. HMRC will not win these cases and the only beneficiaries will be the tax lawyers.

Surely it will be better for UK Plc if HMRC spends that resource on working with the legislative authorities to write better tax law............... it is a simple (but often denied fact) that, if we make tax simpler and make rates lower then more people will pay more (net receipts increase). This will also have the bonus effect that owners, rather than use their own "intellect" to avoid paying tax, will then be able to divert that intellect/resource to better use - like growing their business (which, in turn, will increase HMRC receipts).

If you try to tax everyone at 54%+ (which is the current average rate of overall tax payments here in the UK currently, once all taxes are taken into account), then, yes, those with intellect will busy themselves trying to reduce that.

The sad fact is that people are tiring of the excuses from government; who say that everyone must 'pay their share'. What about the line that we are all paying far to much and, more importantly, what we do pay gets wasted (£9bn NHS computer integration disaster - £500 completely wasted for each and every single UK tax payer. Not a single benefit to show for it).

I am not surprised that thousands seek to avoid tax. I am only surprised that the numbers are not higher.

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Jan 22, 2013 at 18:37

Pity they didn't harry the expense fiddlers (paying no tax) into the dock and hefty fines for not paying tax on their ill gotten gains whilst we had to pay tax for them to fiddle.

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Peter B Hicks

Jan 22, 2013 at 19:28

"the late Lester Piggott"? Michelle, unless I've missed something your man at Thomas Eggar is being a little premature in reporting the great jockey's demise.

While on the subject, it would have been almost impossible for even the most uninterested or cash-strapped tax authority to lose the case against Lester. My understanding is that both parties had agreed a deal, but the "Long Fellow" made the fatal mistake of paying them with a cheque from an account he hadn't told them about during the negotiations. Sort of fell at the last hurdle, really.

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Jan 22, 2013 at 19:33

Perhaps HMRC should take a look at the 'Self Employed', how many times have you been told by a builder, plumber, electrician etc that if you pay cash you can avoid VAT. What they don't say is that by paying cash this probably doesn't go through their books and consequently tax free for them. And take a deeper look at cab drivers, how many of them declare earnings that would,t keep a cat alive let alone a family. Just check on the property they live in and ask yourself how could they have afforded this on what they have declared over the years.

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MG via mobile

Jan 22, 2013 at 19:40

Totally agree with morpheus. This is fueled by ridiculous high taxes with the money wasted on over generous social security and an inefficient public sector. Only an idiot would not try to avoid paying tax in the UK. Furthermore, there is nothing wrong with tax avoidance - if income tax was 15% then why bother but at UK rates what do they expect. Just reinforces that the country is run by idiots

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Foston Yokel

Jan 22, 2013 at 20:44

Why is this government so insistent that our money actually belongs to them? I hear HMRC end of tax year ads on the radio - "don't forget to pay what you owe" - which are patronising and threatening at the same time. As above, I would mind less if the money collected wasn't hosed into one of Mr Brown's still open maws; it would seem that our coalition is unable to put the cork back into the bottle.

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Lucy O

Jan 22, 2013 at 21:25

And I am completely and utterly p***ed off with listening to HMRC radio blurbs and reading their adverts. There can't be anyone left on the planet who doesn't know that Jan 31st is cut off date. STOP WASTING OUR MONEY

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Jan 22, 2013 at 22:27

If the idiots that waste taxpayers money on a gargantuan scale on things that very few of us want our money wasted on actually spent our tax pounds wisely and carefully then perhaps, just perhaps, many of us might feel less aggrieved by the State sanctioned theft of large portions of our income. Instead these nonjob bureaucrats feel that further intimidation is justified, perhaps for the next wonderful chapter ahead for Britain, namely the mass feeding, housing and funding of another million unwanted immigrants from Eastern Europe this time! Personally I say to hell with these pratts. Best of luck to anyone trying to avoid the UK's obscenely high and wasteful taxes!!

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Jan 22, 2013 at 22:34

The truths about money

1. It is an invention of governments

2. It has zero intrinsic value

3. The Govt could make ALL money worthless tomorrow

4. The people who regard money as more important than honesty and integrity are to be pitied for the dull, lifeless schmucks they are.

Rik (after a good red wine, well worth the piece of paper I swapped it for!)

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Jan 22, 2013 at 23:08

Are we talking avoidance (2nd para) or evasion (3rd para)?

Evasion, in it's simplest form is not declaring income and not paying tax - clearly illegal, whereas avoidance, in it's most widely used and government sanctioned form would be putting funds in an ISA wrapper - clearly not illegal.

Where do you draw the boundaries?

It is up to HMRC to define the boundaries, which I would suggest would be far more easily defined by simplification of the tax system, rather than threatening people who are using what they believe to be legitimate and acceptable methods of tax avoidance to minimise their tax bill.

Of course we should all pay our due taxes but we also (as others have mentioned) have a right to expect that our tax pounds will not be squandered.

I for one don't want to see my taxes going to fund housing and legal aid for terrorists living in this country.

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Alan via mobile

Jan 22, 2013 at 23:43

Really excellent posts above on this subject. Morpheus sets it out clearly and others add well to the notion that the government arrogantly believes it can help itself to as much of our hard-earned cash that it can get its hands on to squander at will.

Having seen billions of our taxes wasted by successive bloated waster governments over the years, I say good luck to anyone who can keep a bit back for themselves. Scroungers who are already here, or are are making their way here, have no qualms whatsoever in taking as much as they can without putting in any effort whatsoever.

They really must sort out those issues before they start threatening people who are actually working and already making some contribution.

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mr rowe

Jan 23, 2013 at 10:11

Ignore it, just a press release designed to make it look like they are watching over you by choosing some arbitrary category of the population to make it look direct and threatening. Next week they will be going after people called Trevor.

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