Tax Evasion Measures to be Taken – G8 Summit

G8 leaders agreed on new measures to deal with money laundering and tax avoidance. They include giving automatic access to information to their residents` tax affairs and a requirement that all shell companies identify their effective owners. G8 includes UK, US, Germany, France, Italy, Russia, Canada and Japan.

The main purpose of the new measures is to “fight the scourge of tax evasion”.

David Cameron hosted the summit in Northern Island. Another important event, which happened is the launch of free trade negotiations between EU and the US, which Cameron referred as “the biggest bilateral trade agreement in history”. Hopefully the future  legal agreement will be beneficial for both sides.

The Three Ts – Tax, Trade and Transparency – this is placed at the top of the UK agenda, for its presidency of G8

The summit was overshadowed by the conflict in Syria and Vladimir Putin called for talks for Syrian peace to be held in Geneva  as soon as possible, which was discussed, however no for the Geneva talks was given, and the statement made no mention of what role Mr Assad could play in the future

The summit has been overshadowed by the conflict in Syria.

The G8 leaders – including Russian President Vladimir Putin, an ally of Syrian leader Bashar al-Assad – backed calls for Syrian peace talks to be held in Geneva “as soon as possible”.

All G8 leaders agreed on that transparency is required for multinational companies, which should tell the authorities what tax they have paid and where.  ”Countries should change rules that let companies shift their profits across borders to avoid taxes,” the communique said. It follows revelations about the ways in which several major firms – including Google, Apple, Starbucks and Amazon – have minimised their tax bills.

Illegal activities, including tax evasion and money laundering, will be tackled by the automated sharing of tax information. Speaking during the summit, Mr Osborne said more progress had been made on reforming the global tax system in the past 24 hours than the “past 24 years”.

These and many other topics have been discussed during the summit.

Tax evasion – Highest Among Barristers

London barristers are said to be the high risk sector targeted for tax evasion.

HM Revenue & Customs recently launched a restriction on tax evasion for the lawyers in London which is anticipated to produce £3m. According to the HMRC, it is the Capital’s legal profession that is considered to be one of the trade sectors exposed to high risk and as such it will be scrutinized by tax inspectors. The 300 highest risk cases will be chosen and tax specialists will visit the firms to analyze and check the records as well as to conduct any further investigations if necessary.  Other sectors that will be examined by the HMRC include the grocery and retail (South and North Wales), hair and beauty salons (North-East), restaurants (South-East), and the motor trade (Scotland). According to the HMRC, the expected amount to be recovered from ‘tax dodgers’ could hit

The actions are result of the government £917m spending on tackling the tax evasion, avoidance and fraud. The government has also set a target to raise additional £7bn each year by 2014/15. Since 2011, the HMRC has officially set about 30 task teams which firstly focused on the restaurant trade. According to the exchequer secretary David Gauke, the government will no longer tolerate tax evasion and will make sure that everyone who breaks the rules will take responsibility. He also added that it is not fare to the hard-working people to industriously pay their taxes and others to avoid paying what they have to.

As announced by a Law Society spokesman, the HMRC team forces will collect the due taxes not only in the legal sector but also elsewhere. The investigations will be conducted in confidence until they are resolved and complete.

It was announced that the legal profession is the one at high risk, but Michael Todd QC said that the Bar Council does not give any clear reason so as to why the London barristers have been target as failing to meet their tax obligations. According to him, barristers are the one who bring billions in revenue for the UK and keep the country’s renowned reputation for excellent justice system. Todd’s predecessor Peter Lodder QC had invited Gauke last December in order to discuss why barristers need to pay taxes on work that is done and yet no fees were paid by the government. Todd announced that Gauke has declined the offer to meet, and only yesterday it became apparent that HMRC had special concerns about the lawyer’s tax affairs. He also said that HMRC should use ‘the channels of communication with the relevant professional bodies, which have always been open.’