Should the government be allowed to introduce retrospective fines?
The UK government recently won a high-profile court case which saw an IT worker hit with a £100,000 back tax claim on earnings which were paid into an offshore account. This is just one of potentially thousands of similar cases on the radar of the UK authorities but should they be allowed to introduce retrospective fines for alleged tax evasion?
The truth is that many tax schemes have "sailed very close to the wind" with regards to regulations and tax laws. While there is nothing wrong in having an efficient financial set up for yourself, there is a big difference between efficiency and tax avoidance or tax evasion. The judge in the IT worker case declared that in his opinion the scheme was set up to reduce tax payments therefore this would strengthen the argument of alleged tax evasion. Retrospective fines and penalties however are a very different matter because legally if something you did 10 years ago was not against the law, is it right to be penalised 10 years later using retrospective tax laws? If so, where does this all end?
The tax system in the UK is very complicated and very difficult to understand for many people. Surely now we should be simplify the situation rather than introducing retrospective laws and regulations which will further muddy the water?
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