Putting a stop to the tax fraud game
Yesterday saw the launch in Parliament of a major joint report published by the APPG on Anti-Corruption and Responsible Tax and by TaxWatch.
The report explains that there exists a serious enforcement gap in HMRC’s approach to tackling tax fraud, whereby criminal tax behaviour is systematically dealt with through civil channels provided that it complies with the “rules of the game” i.e. it has the superficial appearance of “legal” tax avoidance.
This means that, even if the tax is recovered, the underlying criminal behaviour goes unpunished. The deterrent effect of the criminal offence of “cheating the public revenue” is therefore disapplied in this context by HMRC policy, with the consequence that unscrupulous advisers, promoters and enablers face no serious downside risk in selling this kind of behaviour to taxpayers. This leads to a large amount of antisocial tax behaviour and substantial revenue losses.
We argue that HMRC should enforce the law of the land rather than merely the “rules of the game”.
Read our report on this important topic here.