Tax avoiders face 'ruthless' clampdown

Companies and individuals who lawfully reduce their tax burden with help from an accountant are just as bad as those who evade tax illegally, a senior minister says.

In a tough-talking speech, the Treasury's chief secretary said the government would find £900m to tackle people who escape tax, or legally avoid their "fair share."

Danny Alexander told the Lib Dem party conference that avoidance and evasion, both "unacceptable," were now "morally indefensible" due to today's economic climate.

"Both come down to stealing money from your neighbours," he said, condemning people who see tax avoidance as a "lifestyle choice that is socially acceptable."

Alongside tax evaders, people who avoid paying their full tax liability "will no longer get away with it," the conference heard, thanks to a raft of new government measures.

Agreed with George Osborne, the chancellor, Mr Alexander said the total anti-avoidance and anti-evasion package should bring in £7billion a year by 2014-15.

Part of that return will come from a crackdown on people sheltering cash offshore, who will face new investigators for HMRC, and from "rooting out 50p tax dodgers."

The minister reflected: "We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra."

The other pounds destined for the Exchequer will come from a fivefold rise in prosecuting tax evaders - people who, like tax avoiders, "must have nowhere to hide".

The strong language is likely to unsettle UK-based taxpayers who use employee benefit trusts to optimise their income, according to Parasol, an umbrella company in the IT sector.

Managing director Rob Crossland said: "Some contractors out there who currently rely on EBTs to maximise their take home pay...should now be feeling extremely nervous."

Mr Alexander's speech, he added, could "suggest that [HMRC] are committed to going further in preventing contractors from capitalising on Offshore Trusts and Double Taxation Treaties."

The MP enforced: "To those who think the taxman will never come knocking. To those who hire accountants to dream up a clever new tax dodge. I say this: Think again."

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