Posted by: the3rdi | September 23, 2010

Individuals and businesses targeted by the taxman

THE CRACKDOWN on tax evasion announced by Nick Clegg could mean lengthy investigations for innocent businesses and individuals, say tax experts.

The Treasury is to increase the number of high net worth taxpayers targeted for special enquiries from 5,000 to 15,000. This could see one in every two, 50 per cent rate taxpayers, under scrutiny.

The coalition has also unveiled plans to invest more than £900m in a bid to target tax avoidance and tax evasion.

Rachel Murphy, tax partner at accountancy firm Hurst, says:

“Everyone knows taxes are largely a given but there are many legitimate ways they can be managed to lessen the burden. The risk is that the Treasury is increasingly merging the two premises of avoidance of tax – which is legitimate – and evasion, which is illegal, couching it in terms of what is ‘acceptable avoidance’ and ‘unacceptable avoidance’.

“However, with the economic situation as it is, we have to be aware of the political sensitivities and the pressure the Treasury are under to raise revenues. Individuals and businesses need to be aware of this and the increasing scrutiny their tax affairs will be under.

“If HMRC does start going through the affairs of business or individuals, it’ll take time and energy to answer their queries. If you do get a letter or a call, don’t ignore it – speak to your tax advisor about how to deal with it.”

The clampdown has been launched in a bid to claw back the gap between those taxes received to those expected which reached £42m in 2008/09.

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