The government has instigated a nationwide advertising campaign that is aimed at individuals and businesses who have been evading their taxes by placing their finances into offshore bank accounts.
The campaign is intended to clearly highlight the damaging ramifications that people face if they are caught evading their tax payments, which includes criminal prosecution, double fines and time in prison.
Chancellor of the Exchequer George Osborne identified that the advertisements are the first in a series of measures that will be enacted in the upcoming months, stressing that he wanted to make it ìvery clearî to tax evaders that the government ëis coming after themí.
“Ultimately, this is about fairness,” said Mr Osborne.
“People have to pay their taxes.”
The issue of tax revenue has been the topic of intense media interest in recent times, with the campaign likely being part of a wider government strategy to increase tax revenue without having to raise the top income tax bracket in the country.
Prime Minister David Cameron has consistently reiterated that he is opposed to raising the top income bracket back up to 50% from its current value of 45%, which the current administration lowered three years ago after the Labour party had increased it in the latter stages of their tenure in Downing Street.
The Prime Minister previously described any tax increase as ìanti-growth, anti-business, ëanti enterpriseí, and was given clear support from the Institute for Fiscal Studies, which released data that indicated that total tax revenue in the UK had actually increased since the top income bracket had been slashed to 45%.
This it argued, was down to the fact that higher earners are more likely to pay the full total of their tax if they are not obligated to part with an excessively high quantity of their total income, and they stressed the value of retaining this trend by highlighting that the top 300,000 earners in the country comprise 7.5% of all tax revenue in the UK.
However, recent populist sentiment has been utilised by the Labour party, who have pledged to raise the top bracket back up to 50%, should they prevail in the 2015 General Election, which might detrimentally affect the public finance deficit that is already in dire need of addressing.
ëWe all have to make a contributioní
The Chancellor was highly optimistic about the advertising campaign, identifying his belief that the HMRC would acquire a significant level of revenue as a result of its success.
He called on all individuals and businesses who currently have an offshore bank account and have yet to declare it to the government, to act now and ëdo the right thingí, arguing that evading tax entails that ëothers have to pay higher taxes and, as a society, we all have to make a contributioní.
This view was shared by HMRC director general for enforcement and compliance, Jennie Granger, who said: “The days of hiding money in another country to cheat the UK are coming to an end,” she said.
The government will hope that their new advertising campaign garners more success than its widely criticised previous initiative undertaken last year, which saw the HMRC publish photos of the top 20 most wanted tax fraudsters in the country.
The campaign only yielded one conviction, and prompted the Labour party to brand it an ëutter failureí.
Many commentators have argued that the government should refocus their target groups in order to improve tax revenue, citing big businesses such as Starbucks as the real targets that should be aimed at moving forward in the
G20 on verge of ëreal breakthroughí
It is not just income and individual tax that has been a problematic area for the government, with business tax evasion also costing the government millions each year with their profiteering antics.
Speaking at a G20 conference in Sydney this week, Mr Osborne praised the collective initiative that the composite countryís had embarked on, which has seen all countries within the group agreeing to share data on businesses offshore accounts so that the national governments become aware when companies are attempting to avoid their tax obligations.
The Chancellor described the initiative as a ëreal breakthroughí, and called on all national finance ministers to ìcome together to say it is not fair if big companies avoid their taxes by shifting their profits around artificially to different countriesí.
Though the final set of new regulations are yet to be implemented, it is believed that talks are ongoing between all the OECD groups of industrial countries.
The data share policies nevertheless represent a watershed moment for the countryís tax collectors, who will likely turn their attention to bigger corporations such as Starbucks, who have long been criticised for having a multitude of stores on our shores without having to pay the levels of tax that many deem they should be required to do.