TaxPersonal TaxDumb-down fears over chancellor’s tax avoidance crackdown

Dumb-down fears over chancellor's tax avoidance crackdown

A new offence of 'knowingly failing to meet basic tax obligations' could lead to 'legal dumbing down' and would threaten honest taxpayers with a loss of their right to trial by jury, experts fear.

Accountancy experts are also concerned that the proposals have not been given enough time for proper consultation.

The warnings came as the proposed measures were published in a Treasury report on the shadow economy which lays out new incentives for tax compliance and sanctions for those who deliberately defraud the state.

The new offence would cover fraud involving smaller sums that would be tried in magistrates’ courts when normally only large-scale tax fraud is dealt with using criminal proceedings.

Precise details of the new offence, suggested in Lord Grabiner’s report, The Informal Economy, will be announced in the budget on 21 March but many remain convinced more time is required to consider the measure.

John Gwyer, director of tax investigations at Parnell Kerr Forster, said: ‘My real concern is that individuals would lose their right of trial by jury in crown court if the offence is tried in a magistrates court. It would represent a dumbing down of the legal process.’

Gwyer also fears magistrates may not be qualified to judge the subtle issues involved in a fraud case and has equal worries about the competency of advice given to defendants.

Francesca Lagerberg, technical manager of the English Institute’s Tax Faculty, claims the report has been produced too close to the budget for its measures to be given full consideration.

She said: ‘Whilst not condoning tax evasion in any form, I do think the new rules appear to offer wide-ranging powers to the tax authorities over and above what is necessary.

‘They therefore could be detrimental to an honest taxpayer.’She said ‘representative bodies’ should be consulted before the measure is enacted.

Grabiner’s report also concludes that increasing the fines for those evading income tax is no solution. He reports that he does not recommend any kind an amnesty for offenders, despite rumours in the press that the measure might be included on the Budget. Grabiner does however suggest setting up a confidential phone line offering advice on how to leave the shadow economy.

Chancellor to reveal details of tax dodge clampdown in Budget

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

4d Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter