Tax Avoidance

No Budget would be complete without announcements designed to discourage those that deliberately evade tax.

This year the Chancellor has decided to use the name and shame tactic. The names, addresses, and professions of taxpayers who are found to have deliberately understated their tax liabilities by £25,000 or more will be published on the HMRC website. This will apply to businesses as well and individuals, but only after the case has been closed and the penalties have been agreed. Any taxpayer who makes a full disclosure of the tax due to HMRC will not be named in this way.

Another way of clamping down on tax evasion by large companies is to make the company accountant personally responsible for the accounting system which is used to hide the tax evasion. The accountant will have to pay any penalties for tax evasion personally. This will only apply to companies defined as large by the Companies Act 2006, which is really very large, but it is an interesting new approach.

Finally there will be no escape for tax defaulters. Where HMRC has lost track of a taxpayer who owes them money, an employer or company will be forced to hand-over contact details of that individual.