George Osborne will soon deliver his second Budget of 2015, with aggressive tax avoidance expected to be in the chancellor’s sights.
Outgoing communities secretary Eric Pickles told the BBC earlier this week that he anticipates a Budget – Osborne’s first as chancellor of a Conservative majority government – “relatively soon.”
Paul Robbins, of specialist information provider Wolters Kluwer, predicts the chancellor’s famous red box will make an appearance in the middle of June. A new Finance Act would then follow before parliament’s summer recess.
When the time does come, there is a consensus amongst commentators that tax avoidance will be near the top of Mr Osborne’s agenda.
Alex Barnes, tax partner at law firm Irwin Mitchell, told news site Accountancy Live: “The Conservatives pledged not to raise income tax, NICs or VAT until 2020 in their pre-election manifesto and David Cameron said this ‘five-year-tax lock’ would be enshrined in legislation.
“Whether this was an empty pre-election promise remains to be seen, but many have warned it could undermine Britain's fiscal credibility.”
Baker Tilly's George Bull, meanwhile, warned the chancellor that a clampdown on tax avoidance is no silver bullet for the public finances.
“Estimates generally exceed reality, and this is not a bottomless pot into which HMRC can dip its spoon”, he said.
“If the tax gap figures are accepted, a 100% successful attack on evasion and avoidance would be unlikely to yield more than £20bn. Of course, the Exchequer has yet to fully benefit from all the measures introduced during the last parliament.”
Last year HMRC introduced an amnesty for contractors who took part in controversial offshore loan schemes, giving them the opportunity to settle “on the best possible terms”. This window of opportunity closed in January 2015.
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