It is hard to avoid the sound of furious activity from HMRC as the budget draws nearer, as HMRC has been extraordinarily busy over the last few weeks in its mission to clamp down assiduously on tax cheats of all varieties.

Highly skilled professionals who choose to work through Umbrella Companies are eloquent testimony to the fact that contracting as a flexible worker does not necessitate dodging tax and national insurance obligations. All who use Umbrella Services automatically pay their due share to the taxman on a PAYE basis, which is why it is somewhat galling to hear of others who give contracting a bad name by means of devious, tax dodging chicanery.

An example is the two IT consultants who are now spending their days in prison after being found guilty of evading around £500,000 in UK income tax by squirrelling their income into undeclared offshore accounts. Receiving prison terms of 15 months and 12 months, both men may now be considering their scheme a ruinously expensive alternative to paying their dues to the taxman.

The two consultants are sharing jail space with a barrister, who was recently sentenced to three and a half years after hoarding undeclared income in offshore accounts, thereby escaping £600,000 in VAT payments. The sentence reflects the fact that the Treasury and the law courts appear to be taking a hard line on this issue.

In addition to publicly naming and shaming tax cheats, the Revenue has also announced that it will be vigorously pursuing those who evade capital gains tax through selling second homes.

The moral of the story is that cheating the taxman really does not pay.

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