Member Article

Lawyers targeted in crackdown on tax dodging

A series of new “taskforces” to tackle tax dodgers have been launched by HM Revenue & Customs today, including one that will target those in the legal profession.

The teams are expected to recover more than £19.5m as they target those who do not pay the right amount of tax, across industries such as retail; hair and beauty; restaurants; and the motor trade, as well as the legal profession.

Visits to traders will be made in order to examine records and carry out other investigations, as this latest wave of taskforces will complement initiatives started earlier in the year.

David Gauke, the Exchequer Secretary, said: “We have made it clear that we will not tolerate tax evasion and we are determined to crack down on the minority who choose to break the rules. Everyone needs to pay the taxes they owe in full. It is not fair that at a time when most hard-working people are paying the right tax, others are trying to get out of paying what they should.”

HMRC’s Mike Eland, Director General Enforcement and Compliance, said: “These taskforces bring together specialists from across HMRC to find people who are not paying what they should. If you have paid all your taxes you have nothing to worry about. But for those deliberately evading tax, be warned that HMRC is coming after you.

“This is not an empty threat - HMRC can and will track you down if you choose to break the rules. We are on target to collect more than £50 million as a result of taskforces launched in 2011/12.”

The chairman of the Bar Council in England and Wales, Michael Todd, told the BBC the body was “unaware” until yesterday that HMRC had specific concerns about the tax affairs of lawyers.

He said: “We are concerned that HMRC has chosen to proceed in this manner, rather than using the channels of communication with the relevant professional bodies, which have always been open. In future, we would welcome a greater level of engagement with HMRC, so that we can better assist it in carrying out its duties to the public.”

Gary Ashford, who represents the Chartered Institute of Taxation, on HMRC’s Compliance Reform Forum, said: “The range of groups targeted in this latest announcement shows how widely HMRC are casting their net – from high street barbers to high court barristers.

“The use of a taskforce tells us that HMRC have evidence of evasion in the sector that they are targeting. Lawyers are the first professional group to be covered by a taskforce. Previously doctors and dentists, and tutors and coaches have been covered by disclosure campaigns.

“Last year’s taskforces have already led to at least 13 criminal investigations. It is clear that HMRC are getting increasingly tough in their determination to reach their target of bringing in an extra £7 billion over the Parliament through initiatives to tackle tax avoidance, evasion and fraud.

“Whether they are in a sector affected by the taskforces or not, anyone who is worried that they have been underpaying tax – whether deliberately or in error – should get professional advice without delay. Penalties will generally be less severe for taxpayers who come forward voluntarily to put their affairs in order with HMRC.”

For a regional perspective, see Short Richardson and Forth LLP’s take.

This was posted in Bdaily's Members' News section by Tom Keighley .