If we want thriving markets in the UK we have to beat tax evasion, but the government is not listening

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I noticed this article in the American Economic Review yesterday:

Nothing surprises me about this finding, which is completely consistent with arguments I have been making for a long time. The simple fact is that if we want an economy where the rule of law is upheld so that a level playing is created on which fair competition can be seen to happen then we have to invest in robust tax authorities.

We do not invest in a robust tax authority in the UK. HMRC is most especially lax when it comes to corporation tax. It asks for tax returns from fewer than half the companies in the UK, assuming that the rest do not have income although they have no evidence to prove that.

Most recent surveys suggest HMRC tolerate up to 20% of companies not making returns requested of them and see companies being dissolved as an alternative to collecting tax owing when the owners who get away with fraud as a consequence can set up a new company the next day without any restriction being applied to them.

If we want thriving markets in the UK we have to beat tax evasion, and this government is still not trying to do that.


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