Tax purge ‘hits the innocent’

PLANS to grant the taxman new powers to ‘name and shame’ serial tax dodgers could unfairly target the innocent, experts warned last night.

Tax specialists and campaigners fear the proposals allowing HM Revenue & Customs to publicly identify suspected serial tax avoiders will backfire.

Many legitimate tax schemes are set up to help burgeoning industries take off, and attract individuals keen to legally reduce their tax bill. But there are fears those who take advantage of such schemes could now be unfairly named as serial avoiders.

Critics argue the change could name innocent individuals given bad tax advice, wrongly implicate hard-working entrepreneurs, and turn households into victims of mistaken identity.

Elaine Clark, of accountants Cheapaccounting, said: ‘I’m all for people paying the right amount of tax. But any proposed scheme to collect more tax must target the correct people, not those engaged in legitimate practices.’

Campaigners’ concerns focus on small print buried in the Chancellor’s Autumn Statement, which proposed publishing the names of those it believes are ‘repeat users of known avoidance schemes’.

These schemes are often fiendishly complicated and set up by financial specialists to attract funding to target industries. Backers range from ordinary businessmen to well-off investors and celebrities.

Andy Silvester, spokesman for the Taxpayers’ Alliance, said: ‘HMRC regularly get things wrong, so there’s a risk individuals could be named and shamed without having done anything wrong.’

HMRC said the proposals were aimed at a hard core of tax avoiders with an average income of £260,000 who have tried to avoid paying more than £10million in tax.