Margaret Hodge: tax avoidance costs the Treasury £5bn a year.

According to the article “Margaret Hodge, the former Labour minister, said rich businessmen designing the schemes were “running rings” around HMRC. She said HMRC had an “appallingly bad record” at catching tax cheats, having fined just 11 people for promoting tax avoidance since 2004 – despite 10,000 people a year coming forward to report tax avoidance schemes. The 11 tax avoidance promoters taken to tribunal were fined just £5,000 each despite the maximum penalty being £1m. Hodge said HMRC had never fined an individual for failing to disclose a scheme on their tax return.” http://www.theguardian.com/business/2013/feb/19/margaret-hodge-tax-avoidance-treasury-loss

I am self-employed myself so this article was interesting for me. When I consider I must have the responsibility to do the tax return in the right way and on time in order to avoid paying penalty fees, while some of the rich top businessmen and companies do not ( or they do it by designing the schemes), it makes me think differently about the government as if the growth of the economy does not matter to them.  

It has been said that ‘what the government gives it must first take away’.The economic resources available to society are limited, and so an increase in government expenditure normally means a reduction in private spending. Taxation is one method of transferring resources from the private to the public sector, but there are others. For instance, one of those alternative methods is production of too much money. The government simply creates more money and uses it to purchase goods and services. This technique has been tried many times over the centuries but the main problem is that it leads to inflation. However, tax is the foundation of good government and a key to the wealth or poverty of nations. That is the reason why we have to pay the tax in order to keep operating market, public goods and competation. By other words, the government is able or should be able to provide enough money for public sector so we have roads, bridges, hospitals, policemen, firemen, teachers and other. But think about famous participants in schemes organised by Ingenious include footballers Steven Gerrard and Wayne Rooney and pop stars Peter Gabriel and Robbie Williams. Films financed by Ingenious include Avatar, Die Hard 4 and Die Hard 5 and Girl with the Pearl Earring. It is wrong is not it? By the way it was only two weeks ago when Wayne Rooney has signed a new contract worth 300 000 pounds per week.The rich gets richer and the poor gets poorer. Thus, it is more than clear who are winners and losers in Britain when it comes to pay the tax- or do tax return.. Read the article it is worth it. 

Branislav Majkuth

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