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HMRC to soften stance on tax avoidance

by Daniel Grote on Aug 20, 2010 at 08:53

HMRC to soften stance on tax avoidance

HM Revenue and Customs is to soften its stance in resolving tax disputes with businesses in a bid to unlock billions tied up in court battles over avoidance, according to the Financial Times.

Dave Harnett, permanent secretary for tax at HMRC, told the paper that officials had sometimes been too 'tough' in disputes over tax assessments. 'HMRC is packed full of very intelligent people, but we are sometimes too black-and-white about the law,' he said.

HMRC's new approach is focused on businesses rather than individuals. Harnett said its litigation strategy introduced in 2007 had sometimes been misunderstood. 'I think we got it a bit wrong in the way we explained it to people. They thought it was a great sword of justice.'

The Financial Times said that HMRC will be asked to reach agreements where amounts of tax owed could vary depending on different legal interpretations, and that the Revenue is planning a pilot project to test the use of third-party mediation in some cases.

4 comments so far. Why not have your say?

Harry K

Aug 20, 2010 at 12:39

As I said in the previous article (why do you repeat these?)

Please explain Avoidance is LEGAL evasion is not - so are you using definitions carelessly?

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Brian (a different one, there seems to be a few of us)

Aug 20, 2010 at 13:41

Harry, I think the point being made was where legal "avoidance" has actually been illegal "evasion" - hence the HMRC court case/s...

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Aug 20, 2010 at 14:29

I am sure that HMRC are here referring to the Civil Courts which would quite properly be used to test the legitimacy of tax avoidance schemes.Legislation is to say the least complex and often ambiguous so open to interpretation - if the taxpayer is using an interpretation that results in a lower liability then if no agreement can be reached it is open to HMRC to make a legal challenge. Evasion would be prosecuted in the Criminal Courts.

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Harry K

Aug 20, 2010 at 17:21


Thanks for that. It would seem that the bloodsuckers want it all their own way - so I guess that's nothing new - it's just they play less and less fair. A good plan can now be chucked out on what is almost a whim with the new powers these people have.

Sensible people with money are just leaving. How many more will follow Phillip Green's example? But for that you gotta trust the wife!! Anyway why not - if you look at it logically she'll cop for a hefty wad if there's a divorce anyway - so stick with it and stuff the taxman - far more rewarding.

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