Grammy award winning singer Lauryn Hill yesterday was jailed for three months in the state of New Jersey for tax evasion. For me and all that are fans of her music it came as a massive shock. Firstly because she has been out of the limelight for so long that news of her even being in the news was interesting but also because you never really hear of prison sentences for tax evasion. 

Although this happened across the pond it prompted me to think what is being done in the UK to stop tax evasion. In the months that have passed there were many reports of bug companies avoiding tax and the majority feeling was that nothing was being done to stop them. It felt as though it was made sure that the lay people that were less well off were paying their taxes - but these major companies such as Amazon, Google and Sir Phillip Green's businesses were allowed to do as they pleased. On the BBC News website it was reported that:  "tax authority figures suggest evasion costs the UK economy £14bn a year." Hill was jailed for not paying $1.8m (£1.2m) - this figure seems tiny in comparison to that owed by the companies. 
http://www.bbc.co.uk/news/business-21121840

It can be argued that the judge sought o make Hill an example however looking at figures that represent the number of American's jailed for evading tax, it can be understood that Hill is not an anomaly. In fact around 15% of Americans were prosecuted for tax evasion in 2012. The UK comparison of 7% is pitiful.
http://taxaid.org.uk/guidess/undeclared-income/step-3-higher-level-of-undeclared-income

The budget in 2013 included a clamp down in tax avoidance but there were many cynics such as anti-poverty campaigners and leading accountants predicted it would do nothing to stop big companies such as Amazon and Starbucks.

http://blogs.telegraph.co.uk/finance/ianmcowie/100023532/budget-2013-tax-avoidance-clampdown-set-to-fail-again-as-amazon-starbucks-and-usain-bolt-run-free/

The UK is a society in which its citizens are to contribute to it in aid of supporting the country and those that are part of the society that need the help of the state. Many may grumble that taxes are too high and that we have a nanny state and this all may be true but if you have chosen to live part of this country and have your business or are earning money here you should abide by the law and pay the taxes.

We need to as a country be stricter on tax evasion no matter what avenue it is being avoided in. The imprisonment of Hill although sad I believe is a fair one also reinforcing the fact that no one should be above the law - whether you own a little or a lot.

 

The UK: Too soft on tax evasion?