Estimate comes from tax gap calculations
HMRC believes half of tax advisers’ fee income is earned from tax avoidance.
The astonishing claim, which advisers said showed the taxman was ‘living in cloud cuckoo land’, emerged from details of its ‘tax gap’ calculations, released on Budget day last week.
In a paper written in April 2005 and released following a Freedom of Information request, HMRC split tax advisory work into three types: tax computations, tax planning and avoidance.
Using an unspecified ‘detailed methodology’, HMRC concluded: ‘The result is that some 50% of total fees are earned from avoidance.’
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