A BBC investigation has alleged that ‘technical wizardry by clever accountants’ is helping the super rich to dodge tax.

The investigation by Radio 4 consumer programme ‘You and Yours’ centred on a call by Prime Minister David Cameron for HM Revenue and Customs to get tough with rich people and companies who employ, in his words, fancy lawyers to avoid paying tax. 

Official figures reportedly show that lawyers acting in this way saved their clients an estimated two hundred billion pounds in tax last year - a sum which if collected, says the programme, would go some way to sharing the burden of present economic woe, a move that is believed would have widespread Government support. 

The programme investigated such questions as the specific practices that David Cameron was talking about? and if identified, what are the chances of clawing money from people and businesses that operate on a global level and who don't want to pay it? Is the Prime Minister grandstanding or does he mean business? 

Programme makers called for listeners’ ideas for making the tax system more equitable, asking such questions as: are there any specific loopholes that could and should be closed? do listeners believe that it is the citizen's duty to hold onto as much of their own money as possible? is the individual best placed to decide how to spend their money? is the technical wizardry by ‘clever’ accountants on behalf of their clients a vital part of a democratic political system which reminds the state that it serves the people and not the other way around? or perhaps listeners believed that business is only able to thrive in this country because of the social and political investment over centuries that have been paid for by the tax system?

It questioned whether it might be the fault of government in the first place for making the tax system so complex, arguing that a simpler, slimmer code would close down the opportunities to slip between growing volumes of tax laws.

The programme also included a contribution from a philosopher on the moral argument for tax.

If you want to join in the NIFA News debate on tax, you can contact the newsroom by emailing: enquiries@nifa.co.uk

Another ex-MP is due to stand trial over allegations of making false claims for Parliamentary expenses.

NIFA News has learnt that the former member for Luton South, 56 year old Margaret Moran, is to appear before Southwark Crown Court in London next spring on a range of charges centring on expenses claims totalling around eighty thousand pounds and involving three homes in London, Luton and Southampton.

The announcement was made at a brief procedural hearing at which Ms Moran was not present.

The former MP, who stood down at the last General Election, faces charges ranging from forgery to false accounting.

Among the allegations made, it is said that she dishonestly claimed over twenty two and a half thousand pounds to repair dry rot on her home in Southampton. A second allegation accuses the former Parliamentarian of falsely claiming a further fourteen thousand pounds for boiler repairs and work on her conservatory.

Ms Moran is yet to enter pleas.

The case has been provisionally listed for Trial on 18 April.

Away from the case of Ms Moran, when the issue of parliamentary expenses claims first hit the headlines, there was talk of MPs "flipping" homes to increase their allowances. The practice involved repeatedly changing which of a Member's two homes was declared as the main property. In this way, it was said that claimed expenses could be maximised by sidestepping time limits on how much could be claimed.

NIFA member David Winch told Andrew Castle, presenter on ITV's former breakfast show GMTV, how the process worked, how an audit might be carried out, how long it might take and who would pay for it.

Forensic accountants are among a wide range of experts who have launched a campaign for a judicial review of a Government decision to force through caps on expert fees in publicly-funded cases before the Family Court.

The organisation, known as the Consortium of Expert Witnesses to the Family Court, say that the action will focus mainly on London fee rates but that it should be seen as a whole as an attack on what they describe as the Government's bizarre approach to funding access to justice, by making decisions, say campaigners, based on an almost total lack of data.

The five-hundred strong Consortium was formed last year after the Ministry of Justice decided to cut fees in the Legal Aid system.

If successful, the Consortium say it will force the Government to act more evenhandedly on paying proper professional rates to expert witnesses of all disciplines.

The Crown Prosecution Service is to experiment with 'paperless' criminal trials as lawyers in selected Courts are given laptops and electronic tablets.

The plan could mean expert witnesses including forensic accountants giving evidence electronically rather than being questioned using large bundles of documents.

The moves comes as the CPS tries to cut its budget by twenty five per cent and improve efficiency by reducing unnecessary transport costs.

Director of Public Prosecutions Keir Starmer told Guardian Law that: "at the moment we use vans, lorries and people to move these mountains of legal paper around the country on a daily basis. It's time the electronic case file became a common basis." He added: "I would like to see prosecutors arriving at court carrying a laptop with no papers being passed to the defence, both having been served the documents electronically." Finally, Mr Starmer said that he wanted to see: "the results of the case and notification sent back to the victims online."

Critics of the move say that complete digital justice could be problematic as lawyers face difficulties taking electronic information into prisons and claimants cannot apply for legal aid online.

The DPP has already successfully trialled the new system at a hearing in Winchester, is developing the systems at Norwich Crown Court and plans to launch the change nationwide next April.

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A forty-seven year old woman has been arrested on suspicion of fraud after a forensic accountant found around ten thousand pounds of parishioners' money had gone missing from a Devon church.

Devon & Cornwall Police have launched an investigation into the allegations which relate to incidents between 2005 and 2011 at St Boniface's Church in Plymouth.

Det Supt Mark Newnham told NIFA News that: "the matter was referred to police by the Church of England Diocese following the review by a forensic accountant." He added that: "the financial investigation unit is looking into the matter."

A spokesman for the Diocese of Exeter said: "we are doing all we can to support the church community while the police enquiry is under way."

The woman, who has not yet been named, has been released on police bail pending further enquiries.

British Prime Minister David Cameron has announced that television cameras will be allowed to film in court.

The move follows an open letter to Justice Secretary Ken Clarke from the Head of Sky News, who has spearheaded a campaign to televise court cases.

John Ryley told Kenneth Clarke the public would have better understood controversial sentences passed on rioters, had judges' remarks been televised.

Broadcasters have been pressing for some years for cameras to be allowed into courts. But, under current law, cameras - including video cameras - are banned from courts in England and Wales under section 41 of the Criminal Justice Act 1925.

The one exception is the Supreme Court where, for the past two years, cameras have been allowed to film proceedings .

Sky's home affairs correspondent Mark White said the changes were a "significant development".

White said the move would probably see broadcasters allowed to air the sentencing remarks of judges rather than entire trials.

Mr Ryley's proposal, put together with senior management at the BBC and ITN, was for limited coverage of court proceedings, which would not show vulnerable witnesses.

He said: "Sky News welcomes the decision and looks forward to working with the judiciary to bring about more transparency in our justice system."

Legal commentator Joshua Rozenberg said he was surprised the Government was moving to change the guidelines so soon after the renewed pressure.

"You will see someone convicted, you will see someone being sentenced, but the witnesses who might otherwise be discouraged from giving evidence won't be shown under what we understand the Government's plan to be," he said.

Mr Rozenburg said the law will have to be changed in Parliament - meaning it might be up to a year before the first television pictures are aired from criminal courts.

Conservative MP John Whittingdale, the chair of the Culture, Media and Sport committee, told Sky the changes were "long overdue".

He said he would be "surprised" if any MPs or peers objected to the proposal.

"I find it quite difficult to think of any arguments against doing it," Mr Whittingdale said.

"It seems to me fairly evident we want to encourage people to respect the law more, this has to be the right thing to do."

However, not everyone is in favour of the changes.

Baroness Helena Kennedy, speaking earlier on Sky, warned such a move "undermines justice".

She also said the only cases that would be given real coverage would be "salacious" ones.

The Government of the Channel Island state of Jersey has claimed that a leading accountancy firm billed inappropriately for the cost of attending a hearing that was set up to examine the costs of a state enquiry into child abuse on the island.

Deputy Trevor Pitman said his Education and Home Affairs sub-panel received a bill from BDO Jersey for attending while the committee was reviewing the company's report on the financial management of the investigation into alleged abuse at the home, Haut La Garenne, in 2006.

Mr Pitman alleged that BDO was, in his words: "attempting to charge fourteen thousand pounds, reduced from twenty six thousand pounds, for attending the two-hour scrutiny hearing and that they had been obstructive from the start." 

But Constable Juliette Gallichan, Chairman of the Privileges and Procedures committee, said the matter was a misunderstanding over who was making a statement about the review and a perceived conflict of interest involving the panel chairman.

She said the company had not pursued the matter of payment since it was originally brought up.

No-one from BDO Jersey was available for comment.

Forensic accountants, economists and lawyers at the heart of an organisation campaigning against tax havens have praised the Isle of Man Government for their efforts to make money laundering and tax avoidance more difficult.

The Tax Justice Network (TJN) says the island has moved down its secrecy league to thirty-sixth position because it has joined the European Union's Automatic Information Exchange, which means that it will participate in sharing information across national borders about people opening new bank accounts.

The Isle of Man now lies below such countries as Ireland, Canada, Italy and India in the TJN's league table.

The organisation's annual Financial Secrecy Index aims to show how effective countries are at combatting money laundering and tax avoidance.

No-one at the Manx Government was available for comment.

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UK energy industry regulator Ofgem has called in forensic accountants as it steps up its investigation into pricing by the big six suppliers.

The action has been prompted by EDF Energy's decision to put up its gas prices by 15.4 per cent and electricity prices by 4.5 per cent from 10th November. It is the last of the 'big six' to announce price increases for domestic customers. The company says that it had absorbed wholesale price rises before being forced to raise costs to consumers.

The regulator has now decided to see whether higher prices are justified.

Forensic accountants BDO are to investigate whether the energy firms understated their retail profits to justify the higher cost of energy.

Ofgem began investigating the companies last year, and in March it said it had evidence they had pushed up prices in response to rising costs more quickly than they reduced them when costs fell.

The regulator said it had appointed BDO to gain an independent accountant's view to improve transparency over pricing decisions made by the power companies and give consumers more clarity over how retail prices relate to wholesale energy costs.

An Ofgem statement said: "Ofgem has appointed accountancy firm BDO to provide recommendations on how best to improve accounting disclosures by energy suppliers.

"This follows Ofgem's review of the retail market earlier this year, which identified the need to improve accounting transparency to give consumers more clarity about how retail prices relate to suppliers other costs."

Vincent de Rivaz, chief executive of EDF Energy, welcomed Ofgem's decision, saying that "suspicion" of the industry needed to be addressed.

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After much discussion, consumer watchdog, The Office of Fair Trading, has decided to call for an independent inquiry into the audit industry following criticism of the actions of four of Britain's largest accountancy firms.

The OFT started to examine the industry after allegations of poor quality published accounts and conflicts of interest against Deloitte, KPMG, Ernst & Young and Price Waterhouse Coopers, surfaced in a House of Lords Committee report last year.

The committee had also said the failure of the auditors to communicate regularly with regulators ahead of the banking crash of 2008 / 2009 amounted to what they described as a "dereliction of duty."

The OFT added it had been concerned for some time that the audit market was highly concentrated with substantial barriers to entry and switching.

Since May, the OFT has been holding talks with interested groups in a bid to identify possible remedies but has now decided that a Competition Commission inquiry is the best way to provide what they said was an "appropriate response to our long-standing competition concerns in this market."

The decision, which is yet to be officially confirmed, will be formally taken following a six-week consultation period.

Deloitte said they would welcome measures to increase competition while KPMG said it believed that there was already effective competition and pricing in the UK audit market. Ernst & Young have confirmed that they will co-operate with the inquiry and Price Waterhouse Cooper, that they will respond after reading, in more detail, the OFT's provisional decision to hold an inquiry.

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A leading international accountancy firm is facing allegations that it did not use sufficient forensic skills to detect fraud while auditing an American mortgage company that went under in the US housing crash.

Complaints have been filed in a Florida Court against Deloitte Touche Tohmatsu.(DTT) alleging that the fraud went undetected over a seven year period.

The action is being brought by the trust overseeing the affairs of the failed company, Taylor Bean & Whitaker (TBW) and one of its subsidiaries, in a claim for losses valued at a combined total of around seven and a half billion dollars.

Lawyers for the trust allege that DTT certification of TBW's books gave legitimacy to a business that was, they argue, selling false or highly overvalued mortgages, mis-stating its liabilities and hiding overdrawn bank accounts.

Attorney Steven Thomas says that they will show that DTT "certainly did not do their job".

TBW was closed down by the FBI afte a raid on its headquarters in August 2009. Seven TBW executives were later convicted on a range of federal criminal charges, with the former chairman Lee B Farkas sentenced to thirty years in prison.

Deloitte spokesman Jonathan Gandal said DTT rejected the court claims, dismissing the action and the claims as "utterly without merit".

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Howard Rose (c) BBC News

A sixty-three year old charity administrator is serving a fifteen month jail term after he admitted stealing more than seventy six thousand pounds from a children's charity.

York Crown Court was told that forensic accountants working with police officers uncovered evidence that Howard Rose from The Village, Earswick had used false invoices to divert donations, intended for the Yorkshire Childrens' Hospital Fund, to his personal bank account.

Police said that Rose used the money from the charity, which helps provide equipment for local paediatric services, to pay off his debts over a three-year period between June 2007 and May 2010.

Commenting on the sentence, Detective Sergeant Garry Ridler from the North Yorkshire Constabulary's Major Fraud Team, said: "Howard Rose abused his role within the trust for his own personal gain, without sparing a thought for the children he was supposed to be helping." He added: "He fully deserves the sentence he has been given and now has time to reflect on the major breach of trust which he should be ashamed of."

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Around half a million self-employed taxpayers are being given an extra two months to make their July tax payment because of an error by the UK tax authorities.

It's been revealed that Her Majesty's Revenue and Customs did not order enough special paper to meet the demand for printing statements confirming the amount of tax due from returns sent in earlier in the year.

This is the second time in three years that the tax authorities have under-ordered this special paper, the last time was in January 2008.

HMRC say next time they'll be better prepared.

Tom Magner has more on Podcast.

Within days of admitting under-ordering paper for tax statements, Her Majesty's Revenue and Customs has once again been forced to apologise, this time for poor customer service.

The criticism came from the Treasury Select Committee of MPs, who concluded that dissatisfaction with the taxman was at such a level that there was a risk of public confidence in the system being undermined.

The Committee, in its report to Parliament, singled out major inefficiency in answering the phone at peak times and what they described as 'endemic delays' in replying to letters.

MPs blamed bad management, demoralised staff, excessive job cuts and increasingly complex tax laws for the poor level of service it found.

While saying that HMRC did a good job collecting taxes, MPs expressed concern that the quality of service to taxpayers could become even worse by too much reliance on the internet for filing tax returns, overambitious computer projects such as real time data for employee PAYE and the legacy of millions of unresolved tax problems.

Replying, HMRC chairman Mike Clasper told BBC Radio Five Live: " It simply wasn't good enough on post and telephone and I'd like to take the opportunity to apologise to the people who had to take a long time to get through, or we didn't get back to them quick enough with the post."

He added that one thousand extra contact centre advisors had now been recruited to handle calls during exceptionally busy periods.

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In a landmark Supreme Court decision, a panel of seven senior judges has decided that expert witnesses, across the criminal, family and civil courts, should no longer have immunity from claims against them for breach of duty in contract or in negligence. Immunity against slander and libel remain in place.

Although this landmark case did not involve forensic accountancy evidence, the principles apply to all NIFA members giving expert evidence.

In the original case, the claimant, Paul Wynne Jones, sued for damages for personal injury in a road traffic accident. The parties could not agree on whether he suffered post-traumatic stress disorder (PTSD) or whether the symptoms had been exaggerated. The claimant’s solicitors instructed a psychologist. Initially, the expert suggested in her report that he was a victim of PTSD. Later, after a telephone conference between experts, she changed her mind and signed a joint statement that suggested that  the claimant was 'deceptive and deceiptful' and that his reaction to the incident was not PTSD. Instruction of a second expert was denied by the Court and the case settled for a considerably lower figure but for the expert signing the joint statement in the way that she did.

The claimant started negligence proceedings against the expert Sue Kaney, seeking damages. She entered no defence to the claim against her on merits, but instead pleaded immunity against suit.

The judge hearing the case, Mr Justice Blake, decided that case law dictated that immunity should stand but granted the claimant a 'leapfrog certificate' to allow him to put the immunity question directly to the Supreme Court and it is on that issue that the senior judges have now ruled.

Lord Phillips gave the lead judgement saying that: "I conclude that no justification has been shown for continuing to hold expert witnesses immune from suit in relation to the evidence they give in court or for the views they express in anticipation of court proceedings.”

Phillips LJ added: “It follows that I consider that the immunity from suit for breach of duty that expert witnesses have enjoyed in relation to their participation in legal proceedings should be abolished. I emphasise that this conclusion does not extend to the absolute privilege that they enjoy in respect of claims in defamation. Accordingly, I would allow this appeal.”

The majority of the panel of judges, Lord Brown, Lord Collins, Lord Kerr and Lord Dyson agreed with Lord Phillips.

Lord Collins pointed to where the risk for expert witnesses lay, saying that: “This appeal is concerned only with the liability of the so-called ‘friendly expert’ to be sued by the client on whose behalf the expert was retained. The facts raise directly only liability to be sued for out of court statements, but any immunity in relation to such statements is a necessary concomitant of the immunity for things said in court, and the same principles must apply equally to each.”

Collins LJ made it clear that there is nothing in this judgement “which affects the position of the adverse expert.”

He stressed that defamation claims against experts are still barred, because it could have "a chilling effect, inhibit frankness and bring the trial process into disrepute. Thus there is nothing in the present decision which would enable a client to sue his handwriting expert for slander because in the witness box he changed his mind and expressed the view that the client’s document was a forgery.”

Responding to fears that the judgment would affect the supply of experts willing to offer their services to the Courts as expert witnesses, Lord Collins offered the following reassurance: “There is no basis for suggesting that experts will be discouraged from testifying if immunity were removed – most are professional people who are insured or can obtain insurance readily, and those who are not insured can limit their liability by contract.”

But, two of the judges expressed serious reservations about the removal of expert witness immunity; Lord Hope and Lady Hale stating that they profoundly disagreed with their judicial colleagues.

In dismissing the appeal, Lord Hope argued that: “The lack of a secure principled basis for removing the immunity from expert witnesses, the lack of a clear dividing line between what is to be affected by the removal and what is not, the uncertainties that this would cause and the lack of reliable evidence to indicate what the effects might be suggest that the wiser course would be to leave matters as they stand." He said that any reform in this are of law should be subject to proper consultation and debate and be left to Government aided by the Law Commission.

Lady Hale said that:  “… it does not seem to me self-evident that the policy considerations in favour of making this exception to the rule are so strong that this Court should depart from previous authority in order to make it. To my mind, it is irresponsible to make such a change on an experimental basis. This seems to me self-evidently a topic more suitable for consideration by the Law Commission and reform, if thought appropriate, by Parliament rather than by this Court.”

More analysis will follow but the full text of the judgement can be found at: http://www.bailii.org/uk/cases/UKSC/2011/13.html

In the meantime, any comments and observations would be welcome on this topic by contacting the NIFA office.
  
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A committee of MPs has warned tax collectors that they need to get their act together to meet Government targets on tackling tax fraud and evasion.

In its report, the House of Commons Public Accounts Committee said HM Revenue and Customs (HMRC) needed to work out how best to get closer to the eighteen billion pounds in extra tax revenue needed.

According to the document, HMRC netted a total of eight and a half billion pounds last year, an increase of fifty per cent over the amount collected in 2007/08. At the same time, they cut their departmental costs by ten per cent.

But, said the cross-party committee, they will have to improve their performance further while making more departmental savings.

The report went on to say that senior officials will need to "show strong leadership" to meet targets and improve staff morale, which was described as at a "low ebb".

Committee chair Margaret Hodge urged HMRC to set more demanding targets for its investigation teams and to speed up fraud cases, only a quarter of which are completed within eighteen months.

She said that the level of penalties imposed on fraudsters has been too low, with more than one in four cases resulting in a fine of less than 10% of the tax due and one in seven attracting no penalty at all.

Ms Hodge went on to say that: "A crucial point is that the Department has lacked detailed information on how much different types of enforcement activity cost and what the returns are. It will need this information to meet the challenge of the new target."

According to HMRC figures, an estimated fifteen billion pounds of tax is lost each year through evasion, fraud and criminal attack.

A spokesman for HM Revenue and Customs said: We welcome the committee's recognition that our compliance approach is already delivering results and that we are ambitious to go further."

HMRC went on to say that: "the additional nine hundred and seventeen million pounds provided, at the spending review, for tackling avoidance, evasion and fraud will enable us to build on this foundation and deliver seven billion pounds of additional revenue a year by 2014/15."

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