Financial experts have expressed concerns over HMRC’s plans to tackle so-called “tax evaders” in a bid to recoup a predicted sum of £7 billion.
HMRC announced in this week’s spending review that they would seek to root out people they deem to be evading tax payments. However finance and tax specialists fear that HMRC will fail to recoup this amount, and also that they could end up targeting innocent individuals, especially if they confuse tax avoidance with tax evasion.
While tax evasion does occur tax avoidance is the perfectly legal practice of planning one’s finances in a comprehensive way that sees the minimal amount of tax being paid. If these legal avoiders are targeted they could seek greener pastures.
Stephen Herring, senior tax partner at accountants BDO, said: “The revenue is sometimes using the word avoidance to apply to any tax planning that is not in writing. This cannot be the case and the revenue needs to be very careful. It cannot stop businesses and individuals planning their tax affairs or they will move their investments to other countries.”