At Wednesday’s 1st November 2017s, Prime Minister’s questions, Jeremy Corbyn devoted all 6 questions to the issue of tax avoidance, in particular a scheme allegedly involving private jets in the Isle of Man in order to avoid VAT. Although the opposition does not make the law it undoubtedly influences what is on the political agenda.
The motivation was quite clear when you looked at how the questions were framed. The opposition believes that the tax gap is anywhere between HMRC’s figure of £34bn and the estimates of the Tax Justice Network of somewhere north of £119bn. The narrative was that if the Government was more successful at collecting taxes then there would be extra money for public spending.
The Government defended itself by pointing out the richest 1% were paying 28% of all (income) taxes and that they had collected £156bn in additional taxes since 2010.
What is clear however is that there are no votes in being “soft” on tax avoidance and that as and when more draconian measures are unveiled and greater numbers of tax inspectors are recruited to deploy them, that those measures will have an easy ride through Parliament.
We can therefore expect a further crackdown on tax avoidance in the next budget.
Primondell is running a series of seminars on tax planning, professional conduct with relation to taxation and how to assist clients in tax investigations.
