Parliament to Investigate Tax Loopholes
Following weeks of celebrities being revealed for paying as little as 1% on their income tax (Jimmy Car, Gary Barlow), parliament has decided to launch an in-depth investigation into the rising problem of tax avoidance in the UK, and put a stop to these tax loopholes.
According to reports, the House of Common Public Accounts Committee is going to assess and review the work of the taxman to see how tax rules are being flouted to help high earning professionals and celebrities escape paying their fair share of income tax.
In particular, parliament plans to bring the HMRC before MPs to explain how they are tackling these evasions.
The fact that during 2009-10, the HMRC calculated a tax gap of £35 billion – the equivalent to 8% of all tax due – and wrote off £10.9 billion as being ‘uncollectable’, means the general public are being made to foot the bill for billions of pounds every year.
What problems does this create?
Whilst tax avoidance schemes are enabling the wealthy to enjoy more of their profits, the bill for this avoidance is causing the rest of the country to pay more in taxes which is causing many to struggle financially.
However, if everyone were to pay their fair share of taxes, the government believes they would be able cut the basic rate of tax by 2p per pound – a significant difference, especially for those on a lower income.
How can your accountant help?
Whilst we all don’t want to pay too much in taxes, by enlisting the help of a chartered accountant, they can help you to legitimately reduce your tax liabilities whilst keeping with the law.
With the right tax planning, investment and advice, it is possible to lower your taxes but ensure that what you are paying is right and reasonable.