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Coalition government will be on the lookout for tax evaders

Coalition government will be on the lookout for tax evaders

Danny Alexander likened tax evaders to benefit cheats when he unveiled the government’s new plans to crackdown on fraud and tax avoidance.

The Treasury chief secretary told the Lib Dem party conference that some people think it is socially acceptable not to pay their fair share of tax, whereas in reality it is morally indefensible.

He went on to say that the coalition will be ruthless with businesses, contractor accountants and individuals who believe paying tax is an optional extra. To help catch tax evasion offenders, the government plans to make £900m available to HMRC, a measure which could see £7bn a year in lost taxes recovered by 2015.

Some of the money will be spent on setting up a dedicated team of investigators who will focus on online tax evasion as well as offshore tax havens. The hope is that this team will increase the number of prosecutions against tax evaders five-fold. HMRC will also be able to utilise the services of private debt collectors in order to recoup outstanding taxes.

John Whiting from the CIoT said that tax advisers will welcome the news. By cheating HMRC, offenders are robbing the government of the money it needs to fund public services and that has the knock-on effect of making everybody suffer.

However, not everyone is convinced by the new plans. Richard Murphy from Tax Research UK says that the problem is systemic and therefore it can only be tackled by systemic reform.

Robert Gaines-Cooper, the British born entrepreneur who fought a long running battle with the Revenue over his tax residence status, said that the government thinks of the words avoidance and evasion as meaning the same thing. He says that avoiding taxes is OK as long as it’s done legally, whereas evasion is definitely illegal.

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Image: Beach Viewer HDR B+W by rockmixer

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