21st March 2017
The Chancellor’s budget earlier this month revealed a government crackdown on tax evasion. It has pledged to issue heavy fines to professional organisations who help devise elaborate avoidance schemes in a move which further reinforces the government’s tough stance on the subject. So what does this involve and how will it affect recruitment agencies?
The government’s ‘war on tax evasion’
Philip Hammond declared in his budget that “since 2010, we have secured £140bn in additional tax revenue by taking robust action to tackle avoidance, evasion and non-compliance. But there is more that we can do. We will introduce a tough new financial penalty for professionals who enable tax avoidance arrangements that are later defeated by HMRC”. It is hoped that fines will serve as a deterrent to those lawyers, accountants and professional advisors who, at present, largely remain unscathed even if their clients receive hefty tax bills and costs once caught.
The new penalty – which would see enablers fined up to 100% of the tax their client avoided – is due to come into force in July and is expected to raise at least £10m this year alone. Few will have forgotten the widely reported schemes that hit the headlines in 2012 which allowed high profile celebrities to evade huge amounts of tax. The K2 system involving Jimmy Carr and Wayne Rooney, as well as one run by Ingenious Media which saw David Beckham firmly in the spotlight for the wrong reasons are just some of the schemes that the new penalty system hopes to combat.
How to stay on the right side of the law amid government crackdown on tax evasion
With the government taking steps to crackdown on the professional organisations that help individuals save on their tax bills, it is even more important that recruitment agencies stay on the right side of the law. However to stay up-to-date with what can only be described as an incredibly complex legislative landscape is no easy task. It is wise that recruitment companies engage with a specialist that is an expert in this field. Failing to do so could result in hefty penalties or even jail – get in touch with us today to see how we can ensure you stay on the right side of the law.