Tax evasion made easier by reliefs, says report

March 27, 2015 10:01 AM

We've been saying for years that the UK's tax code is baffling complex - and that the legion of reliefs, breaks and 'incentives' within it make tax evasion easier. 

Earlier this week, the House of Commons Public Accounts Committee agreed in their report into the use of tax reliefs in the tax code. 

The key conclusion on tax evasion is worth quoting at length:

However, for as long as the United Kingdom has such a complex tax code, opportunities for aggressive tax avoidance and evasion will continue to be exploited. This Government came into office committed to reducing tax reliefs, but in practice the number of reliefs has increased by almost 100 so that, according to the Office for Tax Simplification, we now have 1,140 tax reliefs.

HMRC does not effectively monitor changes in the cost of tax reliefs, so is slow in identifying instances where a relief is being exploited for a purpose Parliament did not intend.

Politicians of all stripes should listen. Rather than grandstanding about companies taking advantage of loopholes created by politicians, they should close the loopholes. Only then will people once again trust our tax code, and trust that everybody is paying their fair share.

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