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HMRC predicts tax avoidance crackdown to create massive row

The Government’s new tax avoidance crackdown will be going into effect next month, and Her Majesty’s Revenue & Customs is preparing for a massive siege.

How is HMRC and the Treasury preparing, do you ask? Well first of all there are shedloads of new judges being recruited even as we speak in order to handle what’s most likely to be a record-breaking workload once these new regulations go into effect. The Government is investing some £7 billion into what it feels is a very serious problem, so the big guns are absolutely coming out.

And these big guns are going to be targeting more or less anyone who uses any sort of tax avoidance scheme that’s deemed ‘aggressive and contrived.’ It doesn’t matter if you’re a multinational company the size and breadth of a major online retail chain (are you listening, Amazon?) or simply a contractor who works out of your own garage – if you’re caught using any of these tax avoidance schemes, HMRC is going to very politely ask you to pay up what you might owe up front instead of having to wait for the results of an investigation.

Now I’m all for squeezing tax cheats until they bleed – and I also know how sneaky these big companies can be with ferreting their money away from the ‘grasping’ hands of the Treasury – but a rule like this is kind of questionable because this is going to effect everyone and not just large firms with deep pockets. Whilst a small contractor might not owe nearly the same amount as a multinational if he or she is suspected of using a tax avoidance scheme, the financial impact of having to pay the difference up front will be able to be absorbed by a big company but not nearly as easily for a self-employed freelancer or the like. I certainly hope that when these new regulations are unveiled there will be some exceptions made for just such an occurrence – otherwise the zeal in which the Treasury seeks to line its pockets is going to do more potential harm than good, despite whatever original impetus was behind the new arrangements.

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