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MPs call on HMRC to ‘name and shame’ tax scheme pushers

by Alex Steger on Feb 19, 2013 at 07:52

MPs call on HMRC to ‘name and shame’ tax scheme pushers

MPs have called on HM Revenue & Customs (HMRC) to name and shame promoters and sellers of tax avoidance schemes which use legal loopholes and abuse available tax reliefs.

The Public Accounts Committee said the promoters of such schemes were ‘running rings’ around HMRC which was losing ‘a game of cat of mouse’ in its bid to shut them done.

Margaret Hodge, who chairs the committee, said the current system worked in favour of the scheme promoters and their clients and that the taxman needed to do more than just publish details of the schemes it successfully closes, and should name and shame the people behind it and it clients.

‘HMRC should publicly name and shame those who sell or use tax avoidance schemes in order to discourage such activity,’ she said.

Hodge singled out film schemes.

‘They create schemes which exploit loopholes in legislation or abuse available tax reliefs such as those intended to encourage investment in British films, and then sign up as many clients as possible, knowing that it will take time for HMRC to change the law and shut the scheme down,’ she said.

‘Their clients can then take advantage of this window of opportunity to make a lot of money at the expense of the UK taxpayer, while the promoter simply moves on to a new a scheme and repeats the process. It is a game of cat and mouse and HMRC is losing.’

Hodge’s comments come as the Public Accounts Committee published its latest report which examined marketed tax avoidance schemes and was based on evidence from HM Revenue & Customs, Tax Trade, Future Capital Partners and Ingenious Media.

10 comments so far. Why not have your say?

Sam De Zoysa

Feb 19, 2013 at 08:30

Please could could the PAC print a definitive list of abusive and presumably abuse-free activities so I know how to behave and instruct my clients to behave in the future?

Presumably anything that is good enough for members of the committee is good enough for the rest of the general public?

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levelplayingfield?

Feb 19, 2013 at 08:37

Perhaps we should go back to the old days and shame those who offend the powerful by putting such people in the stocks? This is lazy politics, backward looking, headline grabbing but does nothing to cure the perceived mischief. I am sure that with a little deft googling and searching at Companies House the majority of scheme promoters and the leaders behind them could be easily identified by The Times reporters.

A simple cure to minimise abusive avoidance? Reduce tax rates to a reasonable level and apply them fairly, not regressively. Draft accurate and simple tax legislation and apply it fairly. Reduce the Civil Service by the 1m headcount added since 1997, use IT to its maximum potential in Government to make even more savings and spend our (taxpayer's money) diligently. Those 1m people could be helping the economy rather than adding to the deficit that our children and grandchildren will have to pay off.

The problem with the above is that Turkeys won't vote for Christmas, so politicians will not follow policies that reduce their spening power and/or voter base. Margaret Hodge still hasn't defined what paying your 'fair share' of tax means and tax connot be raised or collected by such woolly political concepts.

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John Burchett

Feb 19, 2013 at 08:56

All tax avoidance schemes have to be declared and registered with HMRC before they are marketed to clients.

Unfortunately they do not have sufficient staff to close these schemes quickly enough. When they do close them the designers, who are frequently ex-HMRC, find another loophole, register another scheme and so it goes on.

The politicians have no understanding of the process. Tax avoidance is not illegal and quite frankly who wouln't take advantage of a scheme if they could?

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Nick Lincoln

Feb 19, 2013 at 09:09

No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue."

Lord Clyde, 1929 - NINETEEN TWENTY-NINE!!!

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Simon Mansell

Feb 19, 2013 at 09:36

Much better for MPs to name and legislate -that way it would be tax evasion which is illegal rather than avoidance which is legitimate! In a common law system you can't govern off the hoof! If MPs don't like it then legislate against it.

You work half the year for the government before you start to work for yourself!

I suppose the trick is to stop thinking of it as 'our' money, then we wouldn't feel so bad. Still, it's about time the government started to live within its own means, rather than ours.

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Man of Kent

Feb 19, 2013 at 09:38

@ Nick Lincoln - Lord Clyde's words still ring true today. The problem appears to be in the interpretation of the word "honestly", which seems to have now become synonymous with "legally", rather than "morally".

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Dolores Chimichanga

Feb 19, 2013 at 09:53

MPs find the tax schemes offensive. Many people find their over generous pension arrangements both offensive and unfair.

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Sam De Zoysa

Feb 19, 2013 at 10:04

@ Man of Kent

It's a slippery slope to use morality as a starting point. Whose morality? If I said I found women voting, or same sex marriages or non-whites having degrees immoral would that version of morality be unnaceptable?

How about using the law as a starting point? The problem is that we have the 3rd longest tax code in the world after Alabama and India.

Perhaps some clarity and certainty would avoid the need for moral judgements?

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DontTakeTheMoralHighGroundMrMP via mobile

Feb 19, 2013 at 10:10

I agree and endorse all the comments above.

Additionally I'd like to think that those taking advantage of these so-called 'schemes' - as well as other legitimate tax-planning strategies - are 're-cycling' their tax rebates back into the wider UK economy. Thereby effectively chosing where their tax gets spent....rather than relying upon those ill-qualified muppets at Westminster.

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l'ifa passeport en provenance de France

Feb 19, 2013 at 11:30

tax avoidance schemes call on MP's to disclose expenses !

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