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In recent years, HMRC has been granted significant new powers to combat offshore tax evasion, including the ability to fine enablers such as accountants, lawyers, and bankers who facilitate these activities. However, despite these enhanced powers, HMRC has yet to issue any fines to these enablers in the past five years. This lack of enforcement has raised concerns and criticism about the effectiveness of HMRC’s approach.
Why the Lack of Action?
The new laws, introduced in 2017, were designed to create a level playing field and ensure that those who help others evade taxes would face consequences. Yet, despite the potential for robust action, figures show that no fines have been levied under these enhanced powers.
This has sparked criticism from various quarters, including tax experts and think tanks. Michelle Sloane, a tax disputes partner at Reynolds Porter Chamberlain, pointed out that while HMRC has focused on enablers, the lack of fines shows a gap between rhetoric and action. Similarly, Dan Neidle, founder of Tax Policy Associates, emphasised that new powers are ineffective if not utilised.
The Tax Gap and Political Pressure
The UK's tax gap – the difference between the tax that should be paid and what is collected – was £36 billion in 2021/22. Both major political parties have expressed intentions to crack down on evasion to boost Treasury funds. Despite HMRC claiming to have raised an additional £34 billion by tackling various forms of noncompliance last year, the inaction against enablers of offshore tax evasion remains a glaring issue.
What This Means for You
At MS Taxes, we understand how complex and daunting tax issues can be, especially when it involves HMRC. Our mission is to support individuals and businesses in navigating these challenges and resolving tax disputes. The current situation highlights the importance of staying compliant and seeking expert advice if you have concerns about your tax affairs.
With HMRC under increasing pressure to close the tax gap and utilise its enforcement powers, now more than ever, it’s crucial to ensure that your tax matters are in order. If you’re facing complications with HMRC or need assistance in dealing with offshore tax matters, MS Taxes is here to help you every step of the way.
Get in touch with us for confidential and no-obligation tax advice.
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0333 577 6909
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info@mstaxes.co.uk
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Contact Tofail Rahman on: info@mstaxes.co.uk
Tofail is a qualified Chartered Accountant with over 15 years of experience in accountancy and taxation. He has worked alongside a former Inspector of Taxes gaining invaluable insights of inner HMRC workings, which he utilises to support clients through tax challenges and steer clear from possible investigations. Contact Tofail Rahman on: info@mstaxes.co.uk
Tim has a wealth of experience dealing with all types of International Payroll Tax and IR35 Tax Investigations. Tim has worked within Financial Services and Accounting since 2001 including working with HMRC on VAT investigations. He is a specialist in International Taxation Experience, International PEO Employment Solutions as well as in providing solutions for contractors and limited companies.
Contact Tofail Rahman on: info@mstaxes.co.uk
Andrew began his career in HM Customs & Excise and subsequently moved to HMRC (then called the Inland Revenue) on appointment as one of HM Inspector of Taxes. completing his training he was sent as District Inspector in charge of West Midlands and was soon transferred to Head Office as a fraud investigator in Enquiry Branch (now Fraud Investigation Services) where he spent eight years conducting Code of Practice 9 investigations on a wide variety of individuals, partnerships and companies.
Contact Tofail Rahman on: info@mstaxes.co.uk