2017 legislation gave HMRC powers to go after organisations that facilitate tax evasion. In five years Zero companies have been prosecuted.
HMRC given powers but no resources. The law might be in HMRC's favour but nothing else is. All the brainy tax avoidance creatives work for the industries, not the authorities, because the politicians don't bite the hands that feed. "Aggressive" tax avoidance usually starts out within the letter of the law at the time, cynically exploiting the merest hint of a loophole or gap or interpretation. See Sky TV, Starbucks, Amazon etc etc. So when the gaps get closed, even if the revision is retrospective, the initial conduct rarely if ever falls outside the prevailing legislation at the time of the 'breach'. "Failure to prosecute" makes for a punchy headline with which to berate the tax authorities but it is over simplistic to the point of redundancy.
Rishi has earmarked £6bn of tax cuts to be funded by clamping down on avoidance. As you say, cant be done without resources. Doesnt mention past Covid tax fraud. Written off?
What is Covid tax fraud?
Do you mean the lowlifes who claimed benefits / loans they should not rather than tax?
I have sympathy with the government on this. Almost impossible to roll out a scheme at no notice that doesn’t have flaws. Sadly our fellow citizens took what they should not in some cases. Claiming back no doubt difficult practically. You only write off what becomes uneconomic to get back.
The VIP lane for mates of the Tories to provide ppe for our frontline workers who put their lives on the line. Most of the ppe wasn't fit for purpose and has cost the tax payer millions of pounds to buy, store and destroy.
Companies with a record of ppe procurement were overlooked in favour if Tory mates.
Some of those should be in jail for profiteering at the expense of the workers health.
The question was about ‘tax’ not the stuff you reference.
2017 legislation gave HMRC powers to go after organisations that facilitate tax evasion. In five years Zero companies have been prosecuted.
HMRC given powers but no resources. The law might be in HMRC's favour but nothing else is. All the brainy tax avoidance creatives work for the industries, not the authorities, because the politicians don't bite the hands that feed. "Aggressive" tax avoidance usually starts out within the letter of the law at the time, cynically exploiting the merest hint of a loophole or gap or interpretation. See Sky TV, Starbucks, Amazon etc etc. So when the gaps get closed, even if the revision is retrospective, the initial conduct rarely if ever falls outside the prevailing legislation at the time of the 'breach'. "Failure to prosecute" makes for a punchy headline with which to berate the tax authorities but it is over simplistic to the point of redundancy.
Rishi has earmarked £6bn of tax cuts to be funded by clamping down on avoidance. As you say, cant be done without resources. Doesnt mention past Covid tax fraud. Written off?
What is Covid tax fraud?
Do you mean the lowlifes who claimed benefits / loans they should not rather than tax?
I have sympathy with the government on this. Almost impossible to roll out a scheme at no notice that doesn’t have flaws. Sadly our fellow citizens took what they should not in some cases. Claiming back no doubt difficult practically. You only write off what becomes uneconomic to get back.
No. Various individuals registered new companies, or revived dormant ones, took advantage of generic addresses for directors and invented companies with employees to receive furlow payments, or had a sudden mock recruitment drive. Given the whole shebang was run by HMRC who had records of all companies/employees currently paying tax, there was no cross-checking. It is relatively easy to chase down these shysters, as they are named directors and the addresses of convenience (accountants, lawyers) can be threatened with conspiracy to defraud if they dont give up real whereabouts.
However the Tories seem to have no motivation to chase billions of taxpayers stolen money.
Yes. So I think you really are talking about payments received less about tax not paid.
I understand the frustration but processes at short notice are hard to do.
I agree that cross checking with HMRC now might seem plausible. But I don’t know why government would not pursue what they can. No advantage in not to my simple mind.
My anger is reserved most for the claimants who amidst a national emergency try and profit.
2017 legislation gave HMRC powers to go after organisations that facilitate tax evasion. In five years Zero companies have been prosecuted.
HMRC given powers but no resources. The law might be in HMRC's favour but nothing else is. All the brainy tax avoidance creatives work for the industries, not the authorities, because the politicians don't bite the hands that feed. "Aggressive" tax avoidance usually starts out within the letter of the law at the time, cynically exploiting the merest hint of a loophole or gap or interpretation. See Sky TV, Starbucks, Amazon etc etc. So when the gaps get closed, even if the revision is retrospective, the initial conduct rarely if ever falls outside the prevailing legislation at the time of the 'breach'. "Failure to prosecute" makes for a punchy headline with which to berate the tax authorities but it is over simplistic to the point of redundancy.
Rishi has earmarked £6bn of tax cuts to be funded by clamping down on avoidance. As you say, cant be done without resources. Doesnt mention past Covid tax fraud. Written off?
What is Covid tax fraud?
Do you mean the lowlifes who claimed benefits / loans they should not rather than tax?
I have sympathy with the government on this. Almost impossible to roll out a scheme at no notice that doesn’t have flaws. Sadly our fellow citizens took what they should not in some cases. Claiming back no doubt difficult practically. You only write off what becomes uneconomic to get back.
No. Various individuals registered new companies, or revived dormant ones, took advantage of generic addresses for directors and invented companies with employees to receive furlow payments, or had a sudden mock recruitment drive. Given the whole shebang was run by HMRC who had records of all companies/employees currently paying tax, there was no cross-checking. It is relatively easy to chase down these shysters, as they are named directors and the addresses of convenience (accountants, lawyers) can be threatened with conspiracy to defraud if they dont give up real whereabouts.
However the Tories seem to have no motivation to chase billions of taxpayers stolen money.
Yes. So I think you really are talking about payments received less about tax not paid.
I understand the frustration but processes at short notice are hard to do.
I agree that cross checking with HMRC now might seem plausible. But I don’t know why government would not pursue what they can. No advantage in not to my simple mind.
My anger is reserved most for the claimants who amidst a national emergency try and profit.
Nothing to do with tax, this is furlough payments for fictitious employees. Not fraud by individual claimants but by businessmen who knew the system. Question is, how did the word get around? It was widespread.
2017 legislation gave HMRC powers to go after organisations that facilitate tax evasion. In five years Zero companies have been prosecuted.
HMRC given powers but no resources. The law might be in HMRC's favour but nothing else is. All the brainy tax avoidance creatives work for the industries, not the authorities, because the politicians don't bite the hands that feed. "Aggressive" tax avoidance usually starts out within the letter of the law at the time, cynically exploiting the merest hint of a loophole or gap or interpretation. See Sky TV, Starbucks, Amazon etc etc. So when the gaps get closed, even if the revision is retrospective, the initial conduct rarely if ever falls outside the prevailing legislation at the time of the 'breach'. "Failure to prosecute" makes for a punchy headline with which to berate the tax authorities but it is over simplistic to the point of redundancy.
Rishi has earmarked £6bn of tax cuts to be funded by clamping down on avoidance. As you say, cant be done without resources. Doesnt mention past Covid tax fraud. Written off?
What is Covid tax fraud?
Do you mean the lowlifes who claimed benefits / loans they should not rather than tax?
I have sympathy with the government on this. Almost impossible to roll out a scheme at no notice that doesn’t have flaws. Sadly our fellow citizens took what they should not in some cases. Claiming back no doubt difficult practically. You only write off what becomes uneconomic to get back.
No. Various individuals registered new companies, or revived dormant ones, took advantage of generic addresses for directors and invented companies with employees to receive furlow payments, or had a sudden mock recruitment drive. Given the whole shebang was run by HMRC who had records of all companies/employees currently paying tax, there was no cross-checking. It is relatively easy to chase down these shysters, as they are named directors and the addresses of convenience (accountants, lawyers) can be threatened with conspiracy to defraud if they dont give up real whereabouts.
However the Tories seem to have no motivation to chase billions of taxpayers stolen money.
Yes. So I think you really are talking about payments received less about tax not paid.
I understand the frustration but processes at short notice are hard to do.
I agree that cross checking with HMRC now might seem plausible. But I don’t know why government would not pursue what they can. No advantage in not to my simple mind.
My anger is reserved most for the claimants who amidst a national emergency try and profit.
Nothing to do with tax, this is furlough payments for fictitious employees. Not fraud by individual claimants but by businessmen who knew the system. Question is, how did the word get around? It was widespread.
That’s why I queried your first post where you said :
‘Doesnt mention past Covid tax fraud. Written off?’
We are on the same page.
I’d only add business men are individuals. They as a human being chose to defraud / bend the rules beyond what the schemes intended.
2017 legislation gave HMRC powers to go after organisations that facilitate tax evasion. In five years Zero companies have been prosecuted.
HMRC given powers but no resources. The law might be in HMRC's favour but nothing else is. All the brainy tax avoidance creatives work for the industries, not the authorities, because the politicians don't bite the hands that feed. "Aggressive" tax avoidance usually starts out within the letter of the law at the time, cynically exploiting the merest hint of a loophole or gap or interpretation. See Sky TV, Starbucks, Amazon etc etc. So when the gaps get closed, even if the revision is retrospective, the initial conduct rarely if ever falls outside the prevailing legislation at the time of the 'breach'. "Failure to prosecute" makes for a punchy headline with which to berate the tax authorities but it is over simplistic to the point of redundancy.
Rishi has earmarked £6bn of tax cuts to be funded by clamping down on avoidance. As you say, cant be done without resources. Doesnt mention past Covid tax fraud. Written off?
But tax avoidance is not illegal unless there's a change law that makes it so. ISAs are tax avoidance schemes which are legal unless they are made illegal.
Anyone on here caught up in The Loan Charge Scandal? Legal tax avoidance until a new law was introduced making it illegal, but the Tory bastards/HMRC backdated it's introduction 20 years catching out over 60k people. 10 suicides so far.
When I started work in Westminster in 1972 there was a tax office in Victoria where you could walk in and wait for face to face advice at the counter. Problems sorted on the spot.
So much easier than call centres,
When I started working for HMC&E back in the late 80s they had 5 VAT offices just covering central London - City (Gresham Street), Holborn, Euston, West End (Shaftesbury Avenue) and Westminster. They also had a ring of offices covering outer London, at places like Stratford, Orpington, Croydon, Hammersmith, Finchley, Ealing, etc.
Every office had it's own enquiry team which would deal with phonecalls and personal callers - no appointment necessary, just walk in and someone would come out to see you.
Now that's utterly bonkers, just in terms of the cost of renting and running that many offices alone, but then to have so many people in such a small area all doing essentially the same thing and duplicating work was mental. So it was ripe for change.
Fast forward 30 years and now you can't even get to speak to one on the phone, let alone face to face. And the levels of incompetence when you do eventually get to speak to someone is absolutely staggering.
And in that time the "tax gap" has gone up to £35 billion per year!
Thanks for posting this. I found it very informative and put a lot of things into context which are often talked about without any backing or detail. Three especially interesting points
1. "What does history tell us about the record of past governments at reducing the tax gap? They’ve not done too badly. (over 20 years)"
2. "So, can the tax gap be reduced further? Probably – though the law of diminishing returns may mean further marginal gains are becoming harder to come by. Ambitious targets are to be applauded but our advice to politicians of all parties is not to spend the money before it’s been collected."
3. "How would you reduce it?
As noted above almost half the tax gap (£16 billion) is now taxpayer mistakes (error and carelessness). The next government should:
Help wannabe-compliant taxpayers to be compliant by investing in HMRC customer service so they can get answers to their queries
Focus on simplification – a simpler tax system, with clear rules and easy to navigate guidance would lead to fewer mistakes by both taxpayers and tax authorities
Invest in digitalising the tax system but review the process to focus it more on the needs of taxpayers"
Yes, I found it really informative too.
We hear various people going on about "tax avoidance", and while £1.4 billion is certainly not to be sneezed at , it's not the huge hole in the finances or cash cow that some seem to think it is. HMRC's own figures prove this - albeit I think these can be taken with a large dose of scepticism, because it's HMRC marking their own homework after all!
In quoting that relatively small figure, HMRC is ignoring the elephant in the room, the global corporate giants who - in the case of what were dubbed the FAANGS - HMRC are simply unable to challenge, due to lack of resource, and also political unwillingness to do so. However if we go back to the case that first made me realise the scale of the problem, there are figures available. I’m talking about the Vodafone case way back in 2009, which was uncovered a couple of years later: https://www.bbc.com/news/business-16253205
Well worth reading. £6bn in disputed tax payments written off over dinner, and the subsequent MP Select Committee claiming that the amount owed by big corporations at that time might be £25bn. 15 years ago, and before Google and Facebook had even warmed up.
That’s where the big money leaks away.
Says who?
And why wouldn't it be included in those figures?
If its avoidance then it will be included in the figures. If its a difference of legal interpretation then it will be included in the figures.
If its neither of those then it won't. A bit like setting up a company and paying yourself via dividends rather than a salary.
Wrapped up the last of the 'online paperwork' to do with the sale of my flat as a non-resident landlord and I can't fault the HMRC with what they've done. Processed within a couple of weeks and job done. Obviously I got lucky with the person I was dealing with.
When I started work in Westminster in 1972 there was a tax office in Victoria where you could walk in and wait for face to face advice at the counter. Problems sorted on the spot.
So much easier than call centres,
When I started working for HMC&E back in the late 80s they had 5 VAT offices just covering central London - City (Gresham Street), Holborn, Euston, West End (Shaftesbury Avenue) and Westminster. They also had a ring of offices covering outer London, at places like Stratford, Orpington, Croydon, Hammersmith, Finchley, Ealing, etc.
Every office had it's own enquiry team which would deal with phonecalls and personal callers - no appointment necessary, just walk in and someone would come out to see you.
Now that's utterly bonkers, just in terms of the cost of renting and running that many offices alone, but then to have so many people in such a small area all doing essentially the same thing and duplicating work was mental. So it was ripe for change.
Fast forward 30 years and now you can't even get to speak to one on the phone, let alone face to face. And the levels of incompetence when you do eventually get to speak to someone is absolutely staggering.
And in that time the "tax gap" has gone up to £35 billion per year!
Thanks for posting this. I found it very informative and put a lot of things into context which are often talked about without any backing or detail. Three especially interesting points
1. "What does history tell us about the record of past governments at reducing the tax gap? They’ve not done too badly. (over 20 years)"
2. "So, can the tax gap be reduced further? Probably – though the law of diminishing returns may mean further marginal gains are becoming harder to come by. Ambitious targets are to be applauded but our advice to politicians of all parties is not to spend the money before it’s been collected."
3. "How would you reduce it?
As noted above almost half the tax gap (£16 billion) is now taxpayer mistakes (error and carelessness). The next government should:
Help wannabe-compliant taxpayers to be compliant by investing in HMRC customer service so they can get answers to their queries
Focus on simplification – a simpler tax system, with clear rules and easy to navigate guidance would lead to fewer mistakes by both taxpayers and tax authorities
Invest in digitalising the tax system but review the process to focus it more on the needs of taxpayers"
Yes, I found it really informative too.
We hear various people going on about "tax avoidance", and while £1.4 billion is certainly not to be sneezed at , it's not the huge hole in the finances or cash cow that some seem to think it is. HMRC's own figures prove this - albeit I think these can be taken with a large dose of scepticism, because it's HMRC marking their own homework after all!
In quoting that relatively small figure, HMRC is ignoring the elephant in the room, the global corporate giants who - in the case of what were dubbed the FAANGS - HMRC are simply unable to challenge, due to lack of resource, and also political unwillingness to do so. However if we go back to the case that first made me realise the scale of the problem, there are figures available. I’m talking about the Vodafone case way back in 2009, which was uncovered a couple of years later: https://www.bbc.com/news/business-16253205
Well worth reading. £6bn in disputed tax payments written off over dinner, and the subsequent MP Select Committee claiming that the amount owed by big corporations at that time might be £25bn. 15 years ago, and before Google and Facebook had even warmed up.
That’s where the big money leaks away.
Says who?
And why wouldn't it be included in those figures?
If its avoidance then it will be included in the figures. If its a difference of legal interpretation then it will be included in the figures.
If its neither of those then it won't. A bit like setting up a company and paying yourself via dividends rather than a salary.
The answer to your question is that HMRC have not been reported as seeking to claim any disputed tax from Google and co. so it would not show up in the figures for that reason. You may have forgotten, or never seen, the C4 documentary on the Weish village that got together to replicate the Google “Dutch sandwich “ approach. That it was allowed kind of indicates that HMRC can’t work out what is wrong with it. For the benefit of others, its essentialy this: it relies on the preposterous fairy tale that when Google sales people stroll round from their Kings Cross HQ, to (hypothetical example) the Mayfair HQ of WPP’s media agency, to negotiate £100m worth of ad space on behalf of Unilever UK, to target exclusively UK consumers, the revenue from that deal is booked in Google Ireland. Thats because a computer somewhere churns out an invoice with the Irish address on it. Google then say that this is “where the deal was concluded”.
By the way, while of course its deniable, past dialogues between us suggest that your last sentence is a dig at me. So for the avoidance of doubt, in most years I drew a salary from it, because only that way could I make contributions to my SIPP. And of course the salary was taxable income, in th UK.
I’m always up for you seeking to subject me to a reality check. Sometimes you succeed, and I deserve it. Whether you’ve succceded here is for others to take a view on.
Comments
I understand the frustration but processes at short notice are hard to do.
‘Doesnt mention past Covid tax fraud. Written off?’
We are on the same page.
Anyone on here caught up in The Loan Charge Scandal? Legal tax avoidance until a new law was introduced making it illegal, but the Tory bastards/HMRC backdated it's introduction 20 years catching out over 60k people. 10 suicides so far.
And why wouldn't it be included in those figures?
If its avoidance then it will be included in the figures. If its a difference of legal interpretation then it will be included in the figures.
If its neither of those then it won't. A bit like setting up a company and paying yourself via dividends rather than a salary.
I’m always up for you seeking to subject me to a reality check. Sometimes you succeed, and I deserve it. Whether you’ve succceded here is for others to take a view on.