NICK Clegg launched an attack on the better off  last month, announcing a crackdown on tax avoidance and signalling a cut for middle class benefits.

The Deputy Prime Minister said many thousands would face more intrusive tax investigations, with millions more facing cuts in benefits, such as winter fuel payments, child benefit and free bus passes.

Mr Clegg accused middle class earners who pay accountants to minimise their tax bills of behaving like ‘benefit cheats’.

He will say that legal tax avoidance and illegal evasion are ‘just as bad’ as falsely claiming benefits, adding:  ‘Both come down to stealing money from your neighbours.’

Tax evasion by the better off is to be aggressively pursued in a £900million drive which will see the number of people targeted for tax checks rise from 5,000 a year to 150,000.

Half of all the people paying the new 50p top rate of tax will have their tax affairs raked over by a dedicated team of investigators every year.  Lib Dem sources said the number of criminal prosecutions would increase significantly.  The tax crackdown will be undertaken by HM Revenue and Customs, the department which recently admitted getting the tax codes of millions of workers wrong.

This “muddying “ of the water between illegal evasion and legal avoidance is not good news for honest business owners and entrepreneurs who could find themselves facing even more aggressive tactics by the Revenue.

I urge any business owner to ensure that they talk regularly to their accountant about their affairs and ensure that they have taken Tax Fee Protection Insurance as the likelihood is more and more business owners will have their affairs investigated.    

Here at Balance we promote a wide range of advanced tax strategies to our clients and it has become clear since the General Election that the new government is not happy with them and will be looking to legislate against them wherever possible. The trouble is that there is currently a clear distinction between tax avoidance (legal) and tax evasion (illegal)—-Nick Cleggs speak tends to suggest that this distinction may not be so clear in their eyes in the future and the resources that the government is proposing to throw at this area means that there will be a significant upswing in the number of tax investigations.

It would be interesting to hear your comments on this subject.  Please keep expletives to a minimum.


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