Lawyers Face Tax Dodge Investigations
Discussion
The BBC reported today that solicitors and barristers are being targeted by HMRC for tax dodging. Does anyone know why they are taking this action? I would have thought that law firms would be pretty good at ensuring all tax is correctly paid by its partners. While I am not a solicitor or barrister, I am a partner in a professional services firm, and we engage accountants to do our firm's and our personal accounts so that the right amount of tax is paid.
I wonder if the legal professions are simply being targeted because lawyers tend to earn more than most people, and identifying tax underpayments from high earners is likely to help fill the coffers more effectively than targeting, say, nurses.
I wonder if the legal professions are simply being targeted because lawyers tend to earn more than most people, and identifying tax underpayments from high earners is likely to help fill the coffers more effectively than targeting, say, nurses.
i think you are right, its a waste of time. The implications of underpayment of tax on a regulated professional are so bad that no-one really risks it.
The big accountancy firms could have changed their year end to defer the 50% tax rate (completely legal) and didnt (partly because of public perception).
I guess maybe the smaller practices might yield something, but there must be better targets out there for this?
The big accountancy firms could have changed their year end to defer the 50% tax rate (completely legal) and didnt (partly because of public perception).
I guess maybe the smaller practices might yield something, but there must be better targets out there for this?
Throttle Body said:
The BBC reported today that solicitors and barristers are being targeted by HMRC for tax dodging. Does anyone know why they are taking this action? I would have thought that law firms would be pretty good at ensuring all tax is correctly paid by its partners. While I am not a solicitor or barrister, I am a partner in a professional services firm, and we engage accountants to do our firm's and our personal accounts so that the right amount of tax is paid.
I wonder if the legal professions are simply being targeted because lawyers tend to earn more than most people, and identifying tax underpayments from high earners is likely to help fill the coffers more effectively than targeting, say, nurses.
I am sure solicitors do plenty of cash-in-hand work, not difficult to pull off I wouldn't think, but I also think that HMRC is trying to "target" certain groups and frighten them into evading less tax than they otherwise would. I wonder if the legal professions are simply being targeted because lawyers tend to earn more than most people, and identifying tax underpayments from high earners is likely to help fill the coffers more effectively than targeting, say, nurses.
About once every two weeks in the FT there's a column article, "HMRC targets(insert self-employed occupation here)" which smacks of a marketing campaign by the Revenue. Feed the story to the papers for free and the profession du jour, of its own volition, stops dodging so much tax for a while. Free additional revenue to HMRC, what's not to like?
We're an easy target - no public outcry about us being fingered.
What of course HMRC haven't worked out is that (as stated below) there are very very few of us daft enough not to play tax with a straight bat, as the consequences are catastrophic if we don't.
A cheap soundbite, politically driven.
It's just one in a succession of recent "task forces" designed to target certain industry sectors which are perceived as having at least some members who aren't paying "their fair share".
It was doctors a few months ago.
PS Any solicitor doing cash-in-hand work is running risks in more than one way - not least because there's a good chance that s/he wouldn't then be covered by their firm's indemnity insurance.
It was doctors a few months ago.
PS Any solicitor doing cash-in-hand work is running risks in more than one way - not least because there's a good chance that s/he wouldn't then be covered by their firm's indemnity insurance.
Lurking Lawyer said:
PS Any solicitor doing cash-in-hand work is running risks in more than one way - not least because there's a good chance that s/he wouldn't then be covered by their firm's indemnity insurance.
Very much so. There is no way that we would do anything 'cash in hand' indeed the closest that the profession ever gets to this (other than the one or two stupid and rotten apples there are in every walk of life) is in relation to swear fees but these are either accounted for in self assessment returns or paid to the Firm and so are covered in the tax haul from that. In any event I suspect that your average solicitor receives about £100 worth of these through the year, some more, some never even seen a penny.So far as the HMRC 'targeting' us I think that it is a mix of:-
1. Everyone loves to hate Solicitors and Barristers so it's a nice bit of PR.
2. In the City especially there are a number whose job is to sail as close to the wind as possible (without crossing the line) for their clients and this spills out into their own lives a little.
3. A considerable number of Solicitors and Barristers have questioned HMRC over expecting us (and other professionals) to pay VAT on bills delivered but unpaid. HMRC does not like being told that they are as bent as the people they seek to stop breaking the rules.
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