Taxation avoidance, evasion and compliance

 

March 8th, 2017

The whole tone of the Chancellor’s budget speech suggests a high degree of suspicion of those of us who earn a living other than as an employee. The Chancellor also showed some suspicion about those who traded within LLPs or personal service companies.

 

The whole question of how people trade is within the remit of the Taylor Review. In saying “People should have choices about how they work, but those choices should not be driven primarily by differences in tax treatment,” the Chancellor has pointed Mr Taylor in the direction he would like him to go.

 
Chancellors have repeatedly expressed concerns around the alleged widespread abuse of the intermediaries legislation, more commonly known as IR35, and secondly the use by the public sector, including the likes of the Civil Service itself and the BBC of individuals working through their own company.
 
Until the Taylor Report is published later this year, it is difficult to plan ahead. For now, we must work with what we know but for the “entrepreneurs and the innovators” whose virtues Mr Hammond extolled and encouraged there might be difficult times ahead.
 
As ever, no budget would be complete without measures to tackle tax avoidance. This budget is no different and includes measures to charge penalties on individuals promoting tax schemes, there are also provisions dealing with specific forms of identified avoidance, including appropriations into trading stock and certain off-shore pension arrangements.
 
HMRC will undoubtedly continue to wage its war on what it sees as tax avoidance, unfortunately there is not always universal agreement on what ‘tax avoidance’ actually is.