The past week’s news surrounding the Panama Papers have put the spotlight firmly back on tax evasion. With Prime Minister David Cameron launching a taskforce, led by HMRC, to bring those who illegally avoided UK tax to book, the issue of tax evasion is firmly back in the headlines.
Cameron’s own tax affairs have been jumped upon by the media, similar to the cases of DJ Chris Moyles, comedian Jimmy Carr and the members of the band Take That. Their participation in tax avoidance schemes were reported and the media coverage pulls the issue back into the public eye.
The Panama Papers revelation of these offshore funds may well prove to the tipping point in the government’s approach to tax policy. With Google, Starbucks and Facebook all in the news in recent months regarding their UK tax affairs, the government’s battle against big corporates has been unsuccessful. With Cameron shielding offshore trusts from the EU back in 2013, the government’s method of collecting more taxes has been aimed at small businesses.
The dividend tax, withdrawal of the employment allowance, changes to entrepreneur’s relief and the recognition of goodwill are all tax changes which have had a negative effect small businesses, sole traders and entrepreneurs. Before last year’s election, Cameron vowed to help small businesses, calling them to the backbone of the economy.
The subsequent changes to tax policy have hit the backbone of the economy the hard. The ‘grafters, roofers, retailers and plumbers’ who Cameron claimed to have “got” have bore the brunt of changes to UK tax policy. Now offshore funds are back in the headlines, we may see a move in tax policy, away from small business and onto true tax avoidance.