Grumpy Accountant

HMRC tackling the tax gap? Don’t make me laugh…or cry

I share Richard Murphy’s view of professional responsibilities as being that of keeping my clients as free of grief from HMRC and Companies House as I possibly can. In turn, that often entails telling clients what they can’t legally do.

I have recently had to tell a client who was forced into a service company by their employer that IR35, with all its expensive consequences, most definitely applied. Ultimately, because another 20+ of this person’s colleagues are handled by an unqualified accountant who chooses to ignore IR35, my now former client decided to join that group.

I don’t like IR35 because it lets employers do pretty much what they want with their employees (oh, these burdensome employment rights!), leaving the employees to subsidise the previous employer’s NIC. But IR35 remains the law of the land so my clients need to know, and are told, the implications of ignoring this law.

My problem is that HMRC shows no visible sign of giving a toss whether or not this law is complied with, thereby casting me, and those who share my view of this situation, in the role of a Jeremiah prepared to tell clients that they need to pay more tax for fear of the potential consequences.

Of itself, I’m not overly concerned about the situation I’ve described in terms of its impact on me. What does concern me though is that, if HMRC does not or cannot enforce tax law generally, there is very little incentive, beyond professional ethics, for the accounting profession to enforce it for them if it is going to risk its client base by so doing.

Indeed, this is perhaps the reason why the Big 4 became so heavily, and in my view unprofessionally, involved in aggressive tax avoidance, ie they decided long ago that tax law was ripe for attack precisely because it has been, and can only continue to be given the continual decline in HMRC’s personnel, so inadequately defended by HMRC.

08/05/2013 - Posted by | Uncategorized

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