HMRC to crack down on London lawyers’ tax evasion
London lawyers have been identified as “high risk” candidates for tax evasion and are to be specifically targeted by a new HMRC taskforce.
Launching the taskforce this week, HMRC said it expected to recover more than £19.5m by going after five groups – the legal profession in London; grocery and retail in specific pockets of the UK; the beauty industry in the North East; restaurants in the South East and Solent; and the motor trade in Scotland.
HMRC’s Mike Eland, director general of enforcement and compliance, said: “This is not an empty threat ... We are on target to collect more than £50m as a result of taskforces launched in 2011/12.”
However, Bar Council chairman Michael Todd QC queried why HMRC had “chosen to proceed in this manner” rather than engaging with the relevant professional bodies.
“It is not, at present, clear to us exactly why the legal profession has been targeted by HMRC,” he said. “The Bar Council expects barristers, like any other group of taxpayers, to meet their tax obligations. My predecessor, Peter Lodder QC, wrote to David Gauke MP [the exchequer secretary] last December, to invite him to discuss barristers’ liability to pay taxes for work which has been done, but for which the fees had not been paid by the government. He declined to meet us, and we were unaware, until yesterday, that HMRC had specific concerns about the tax affairs of lawyers.”
A Law Society spokesperson said: “HMRC have a responsibility to collect all taxes that are due and we welcome their commitment to conduct their investigations sensitively and in confidence until complete. While there can be no excuse for unlawful tax evasion by any individual, the vast majority of the 125,000 solicitors in England and Wales deal with their tax affairs diligently and responsibly despite the complexity of the tax code.”
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