THE TAXMAN COMETH – AVOIDING PRISON

Check your tax-planners’ guarantees. In the USA, UK and EU, there are finely balanced legal distinctions between tax avoidance, evasion and criminal fraud or false accounting.

As the UK tax collectors wake from their post-Thatcher and Reagan, thirty-five year sleep, yawn, recall their nastier interpretations of the law, stretch their long arms, and reach out with mean, bony fingers for your tax-returns, skewed valuations of assets transferred, management charges, inter-company and transfer pricing invoices, funny-money interest charges, income pretending to be loans, income from abroad pretending to be capital, directors’ fees dressed as dividends, dummy and off-shore firms, dodgy residence and domicile set-ups, hidden bank accounts, etc. – to avoid prison, just pay up and do not tell lies. If the investigators start to ask you questions – they already know the answers. It is the numbers and import of the lies you tell that can tip the balance from tax, penalties and interest to criminal charges.

So – dust off the past 30 year’s professional planner’s letters, advice and calculations – ensure the law the advice referred to is USA or UK or EU law etc – NOT some shifty little island’s or “tax-free” State’s own, helpful home-baked laws but are the laws in your country – and check the guarantees you’ve been given, and check the advisers’ Professional Indemnity Insurances. If your old tax advisers disappear – maybe you should also.

FEELING CHIPPER?  – A tax barrister just before a UK High Court case was alarmed that the client was quite certain that he had all the answers. And the lawyer warned, “You won’t be feeling so cocky, Mr. Smith, when you are clutching the bar at the Old Bailey”. (Read the small print below – and get a copy of your country’s tax laws).

The Mail on Sunday (a UK, right-wing, popular newspaper) 22 SEPT 2012 – “In an interview with the Mail on Sunday, Chief Secretary to the Treasury Danny Alexander promised an extra 100 HM Revenue and Customs staff devoted to fighting tax avoidance by people with assets worth more than £1m. Previously the threshold was £2.5m”

Tax inspections plan for affluent

Anybody worth more than £1 million faces coming under scrutiny from inspectors in a fresh crackdown on tax avoidance announced by Liberal Democrat Treasury Chief Secretary Danny Alexander. The move will mean 200,000 more people will be targeted by HM Revenue and Customs' affluence unit, set up originally to study the affairs of the 300,000 with assets and property of more than £2.5 million.

"The measure will apply to people with homes and assets of more than £1 million," he said. "The wealthiest did best in the boom years and it is right they should pay more now." Mr Alexander said the affluence unit, boosted from 200 to 300 staff, would cross-reference files and records to spot signs of avoidance. "They will look at anomalies and sniff out any problems," he said.

A new coalition drive to hit the rich will also include separate moves to stop high-earning BBC personalities from using tax avoidance schemes and fines for tax-dodging footballers

Accountancy Age 19 Sept 2011.

2,250 tax inspectors lined up for avoidance focus by Kevin Reed

MORE THAN 2,000 tax inspectors will target tax avoidance and evasion in new roles, according to chief secretary to the Treasury Danny Alexander.

In his speech to the Lib Dems' Autumn conference, Alexander called on working towards a fairer tax system. An additional 2,250 HMRC staff will move into new anti-evasion and avoidance jobs, with more than 1,000 of these jobs being advertised this month. Read more:

http://www.accountancyage.com/aa/news/2110028/-250-tax-inspectors-lined-avoidance-focus#ixzz27IABd6dm

IT PAYS TO READ THE SMALL PRINT - THE LAW OF THE LAND: 

PROSECUTIONS AND THE "HANSARD" PROCEDURE: THE CONSEQUENCES OF REGINA V W AND ANOTHER

[Inland Revenue Tax Bulletin, issue 35, June 1998, p. 544]

The Court of Appeal ruling in Regina v W and Another was reported in The Times on 24 March, and caused something of astir in the press. It has now been fully reported at [1998] S.T.C. 550. Readers may be interested in the Revenue's view of the implications of the ruling.

The case concerned a prosecution for alleged conspiracy to defraud, brought by the Crown Prosecution Service. The Indictment was lodged in 1995. The first count to be tried will be a charge of false accounting, where the motive is alleged to be tax evasion. One of the defendants was involved in negotiations that led to a financial settlement with the Inland Revenue in 1997. The settlement related to the tax liabilities of two companies allegedly controlled by the defendants in respect of periods covered by the forthcoming prosecution for false accounting based upon alleged tax evasion. The judgment of the Court of Appeal made it clear that the acceptance by the Inland Revenue of such a settlement did not prevent the Crown Prosecution Service from continuing with the pre-existing prosecution.

There has been some concern that this decision appears to pull the rug from under the feet of tax professionals and Revenue officials conducting investigations and negotiations under the so-called "Hansard" arrangement, set out in Code of Practice 9(although the "Hansard" arrangement specifically does not offer immunity from prosecution). Such concerns are misplaced. In fact, the role of the Crown Prosecution Service has not changed. In a statement in the House of Commons on 8 April 1998, the Attorney-General made it clear that primary responsibility for prosecution in relation to tax evasion remains with the Inland Revenue. The Crown Prosecution Service will ordinarily only bring proceedings that encompass charges relating to tax evasion where that evasion is incidental to allegations of non-fiscal criminal conduct. That was the case in Regina v W and Another.

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