The Taxman Cometh

Much attention has recently been paid to how the Treasury is responding to significant public disquiet on the issue of tax avoidance by big companies. Carolyn Byrne of Chattertons Solicitors said, “HM Revenue & Customs new aggressive approach to closing tax loopholes and increasing revenues is having some interesting effects”.

Companies are allocating larger and larger reserves of cash to settle disputes with the Treasury and thereby avoid embarrassing headlines. There is also evidence that companies are less likely to follow through on a good old-fashioned technical argument with the Revenue, even where there is no suggestion of any actual wrong doing. Company executives fear that a negative result will be seized upon by the press and that they will simply be lumped together with high profile tax dodgers and cheats.

High profile individuals are also increasingly taking the route of early settlement with HMRC to minimise the risk of damaging headlines. Interestingly however, there is evidence that less prominent wealthy individuals are becoming more combative and are more likely to fight the demands of HMRC through the courts. These individuals are also showing an appetite, when they lose a case, to sue their financial advisors on the basis that they would not have invested in the scheme of they had been fully aware of the risks.

If you would like assistance on tax issues, call Carolyn on 01522 541 181 or email her at carolyn.byrne@chattertons-mckinnells.com for further information.