View the article online at http://citywire.co.uk/money/article/a652831
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 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.’
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by Daniel Grote on Jan 30, 2015 at 17:06