Know your enemy

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The Daily Telegraph is among the papers reporting doubts in the accounting profession about the attack on tax evasion being promoted by HM Revenue and Customs as their counterbalance to cuts. As they note:

Stephen Herring, senior tax partner at accountants BDO, said: “Every Chancellor says they will clamp down on tax evasion, but they always find it more difficult than they thought.

“Everyone wants to stop people from hiding their income in offshore accounts and it is right and proper that they devote resources to that and there has been some success.

“But 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.”

Similar comments are reported from KPMG and Baker Tilly.

I deeply resent being a member of a profession that says this sort of thing: that implies that of course tax evaders should be pursued but if we push them too hard people will leave the country. And anyway, they imply, it is the Revenue's job to leave smart accountants alone.

I would remind a profession that the National audit office recently noted that the tax returns of those who used accountants were more likely to include mistakes  than the tax returns of those who did not.

And I would remind the profession that whenthe biggest firms of accountants are be found in every tax haven in the world it is entirely appropriate that scrutiny be turned on them.  They are only there to sell tax avoidance services. They can claim for ever that they are legitimate,but that is only proven when a tax authority has had the opportunity to appraisethe schemes that are being put in place.As a consequence of the secrecy in many of these jurisdictions that is not always possible.

I'm sorry to say it, but the profession has a long way to go before it can criticise the activities of the Revenue in chasing tax evasion. When, and if, the profession is seen to be promoting tax compliance then they can criticise the actions of the Revenue. Until thenthe Revenue should rightly consider the profession to be the enemy, because to put it bluntly, in far too many cases they are.