Partner Article

Thomas Eggar on tackling tax avoidance

Richard Jordan, lawyer and tax expert at Thomas Eggar, shares his thoughts following Margaret Hodge’s comment in recent Public Accounts Committee report that HMRC needs to be “more aggressive and assertive in confronting corporate tax avoidance.“

Anyone who has experienced a tax investigation knows that HMRC is tough and ruthless, and exploit its considerable powers to impose the maximum inconvenience on immoral but legal tax avoiders. However, HMRC carefully picks its battles and chooses to spend the tax payer’s money only on cases that it has a realistic prospect of winning. To do otherwise would be madness, and yet this is what Labour MP Margaret Hodge suggested on Radio 4 yesterday in proposing that it should spend tax payers’ money challenging more tax cases to demonstrate a ruthless streak, despite having no prospects of winning. The cost of litigation is immense and, if there is one good way to demonstrate inefficient and wasteful public spending, it would be to litigate on lost causes.

If MPs are unhappy, then they should change the law to make the corporations pay more tax. The problem is that, unlike HMRC employees, MPs today have rarely worked in the real world of commerce which means they lack any commercial common sense. We need MPs who truly understand how business works. HMRC employees have a lonely and thankless job to do, but they do it well. It is disappointing to see them publicly undermined and criticised by some MPs in this way

This was posted in Bdaily's Members' News section by Thomas Eggar .