Tax Avoidance in Dagenham

I have written to the Sunday Times in response to their article published on 21 March:

Dear Sir,

The article “It’s not just the rich that avoid tax: it’s teachers and nurses too” (March 21) is a fine example of lazy journalism, the content having been gleaned from an HMRC corporate report (https://www.gov.uk/government/publications/use-of-marketed-tax-avoidance-schemes-in-the-uk/use-of-marketed-tax-avoidance-schemes-in-the-uk ) and relayed without challenge. The idea that all lower-income workers involved in arrangements of the type described should be treated as deliberate “tax avoiders” is absurd, given that (a)  it has often been a condition of securing paid work that they do so; (b) it has been falsely represented to them by supposedly reputable organisations that the arrangements have been approved by counsel and by HMRC; and (c) it is unreasonable for HMRC to assume that such individuals have a sufficient understanding of the complexities of our tax laws to appreciate that they are being lured into tax avoidance. This is all the more disturbing, given allegations that HMRC has itself engaged workers paid through such arrangements.

As the HMRC report recognises, the promotion of tax avoidance is not, on its own, a criminal offence. Until it is, it is difficult to see how the government will succeed in preventing ordinary people falling victim to the organisations profiting from the misunderstanding of workers intent on securing remunerative work. Your journalist should perhaps be asking government why, according to recently published consultation documents, it still does not propose to criminalise the involvement of individual officers, directors and company owners in such promotion. To establish guilt, it could be provided that a judge or jury is asked to determine if an arrangement has been “promoted”, once the Upper Tier Tax Tribunal or the High Court has determined, on application by the prosecuting authority, that the arrangement is or involves “abusive tax avoidance”.

Yours faithfully,

David Pett

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