Is the Revenue going soft on freelancers?

Dave Hartnett, the permanent secretary for tax said that some HMRC employees have acted as if they hold a "great sword of justice". Hartnett thinks the department would benefit financially if employees were more co-operative.

If the case involves conflicts of legal interpretation, Revenue officials will be encouraged to agree settlements that let them collect plausible amounts of overdue tax. HMRC also intends to run a pilot project to test the feasibility of third-party mediation.

The coalition is keen to put an end to tax evasion and last week Nick Clegg said the government was looking into ways to ensure the wealthy pay their fair portion of tax.

Whitehall is hosting a series of meetings this month to investigate whether a "general anti-avoidance rule" would be a suitable way to frustrate tax planners who look for loopholes in our tax legislation.

The Lib Dems have long been concerned at the way skilled lawyers help businesses and wealthy individuals reduce their tax liabilities and the birth of the 50p rate of tax has heightened fears of a new surge of tax avoiders.

There are also concerns that the government's public sector spending cuts could leave HMRC without sufficient resources to deal with tax evaders.

The Revenue is now better at closing loopholes but people who look hard enough will still find them. Whilst a GAAR might seem like a good idea, at least to act as a deterrent, the legislation won't happen overnight.

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