Details of the 2013 Budget are just being announced as I write this. The fundamental theme would appear to be tax. Not just the promised cut in corporation tax which is supposed to promote growth in 2015, but also an increase in the personal allowance to £10,000. All of this is positive.
However, the Chancellor would appear to have decided that tax avoidance, often described by this government as “aggressive", and tax evasion are now one and the same. He intends to name and shame those companies and firms that construct and promote tax avoidance schemes, create a centre of excellence to clamp down on tax avoidance and fraud, close tax loopholes, and form new agreements with the Isle of Man, Jersey and Guernsey. The list goes on and on.
We know that the UK has signed reciprocal agreements with the US and Switzerland regarding the exchange of information relating to the ownership and details of offshore monies; we know that accountants and lawyers specialising in tax avoidance work and schemes have been scrutinised by HMRC.
However tax avoidance is not illegal, far from it. Tax evasion is illegal. What this government has done, following the American example, is to blur avoidance and evasion until they are indistinguishable and intend to frighten the life out of those who create, and are party to, legitimate avoidance schemes. Legitimate, that is until HMRC gets around to declaring them null and void.
Expect a whole series of disclosure facility agreements with the Channel Isles (the Isle of Man facility is already in force) and high profile arrests and search/seizures of accountancy and law firms this year.
If you have any concerns regarding the above contact Jeffrey Lewis or Siobhain Egan.
