A Taxing Time Ahead: The Reality Behind The Rhetoric In 2013 a raft of measures were introduced by the government to crack down on tax evasion both on an individual and on a corporate basis. In these stringent economic times, the political imperative was at the very least for the government to be seen to be doing something to address the perceived unfairness of high net worth individuals and corporations avoiding their fiscal responsibilities. After all, as the politicians were so keen to remind us, we were all in this together. The measures ranged from headline grabbing international tax treaties with the Swiss and other European countries; greater co-operation with the US and our off shore dominions as well as increased funding being diverted to tackle tax evasion on the home front. The impetus being to increase revenue through recoupment and fines, close down aggressive tax avoidance schemes and apparently to divert the enforcement process through the civil and regulatory route and avoid the criminal process wherever possible if the cost benefit analysis was in favour of it. Mediation was also advanced as an alternative to time consuming litigation in tax tribunals as there appeared to be a concerted and joined up approach by HMRC to increase revenue recoupment on an expedited basis. Their was also a concerted press and public relations offensive to apply pressure on multi national corporations to comply with their corporate tax obligations. It seemed that a brave new world was being entered into by the government and there would be no hiding place for the fiscal miscreants of this world. Whilst the rhetoric was impressive and the measures outlined above appeared to be setting a new agenda in the financial world, the reality has been somewhat different. The international tax treaties have not recouped the level of monies envisaged by the HMRC (as money located in Switzerland was simply transferred out of its jurisdiction to other parts of Europe or elsewhere) and the multi national corporations paid lip service to responsible compliance with their corporate tax responsibilities, whilst apparently constantly looking for the most cost efficient tax location to base their financial hubs. In relation to tax avoidance schemes, whilst the pre-registration scheme introduced by the government has seen a reduction in the number of schemes being disclosed, is that because of the effectiveness of the governmental approach or a scenario where tax professionals are reluctant to engage with a system in which they do not fully trust the undertakings given at
A Taxing Time Ahead: The Reality Behind The Rhetoric In 2013 a raft of measures were introduced by the government to crack down on tax evasion both on an individual and on a corporate basis. In these stringent economic times, the political imperative was at the very least for the government to be seen to be doing something to address the perceived unfairness of high net worth individuals and corporations avoiding their fiscal responsibilities. After all, as the politicians were so keen to remind us, we were all in this together. The measures ranged from headline grabbing international tax treaties with the Swiss and other European countries; greater co-operation with the US and our off shore dominions as well as increased funding being diverted to tackle tax evasion on the home front. The impetus being to increase revenue through recoupment and fines, close down aggressive tax avoidance schemes and apparently to divert the enforcement process through the civil and regulatory route and avoid the criminal process wherever possible if the cost benefit analysis was in favour of it. Mediation was also advanced as an alternative to time consuming litigation in tax tribunals as there appeared to be a concerted and joined up approach by HMRC to increase revenue recoupment on an expedited basis. Their was also a concerted press and public relations offensive to apply pressure on multi national corporations to comply with their corporate tax obligations. It seemed that a brave new world was being entered into by the government and there would be no hiding place for the fiscal miscreants of this world. Whilst the rhetoric was impressive and the measures outlined above appeared to be setting a new agenda in the financial world, the reality has been somewhat different. The international tax treaties have not recouped the level of monies envisaged by the HMRC (as money located in Switzerland was simply transferred out of its jurisdiction to other parts of Europe or elsewhere) and the multi national corporations paid lip service to responsible compliance with their corporate tax responsibilities, whilst apparently constantly looking for the most cost efficient tax location to base their financial hubs. In relation to tax avoidance schemes, whilst the pre-registration scheme introduced by the government has seen a reduction in the number of schemes being disclosed, is that because of the effectiveness of the governmental approach or a scenario where tax professionals are reluctant to engage with a system in which they do not fully trust the undertakings given at