British Tax Protest is Risky Business
British singer Billy Bragg has threatened to stop paying his taxes unless the British government places limits on the amount of bonuses that top executives can receive from banks which were bailed out during the recession. The singer has threatened to not submit his January instalment payment unless his demands are met by January 31, 2010. The singer has suggested that other taxpayers to follow suit. However, Canadian taxpayers should be careful to join such a protest as it could lead to serious negative consequences.
First, the Income Tax Act is full of civil penalties for things such as failing to file an income tax return and failing to pay instalments. These penalties can be up to 17% of the tax owing for failing to file a return or 50% of the unpaid instalment. Further, if an individual files an income tax return he knows or ought to know is incorrect could face a penalty of up to 50% of the tax owing.
Second, the Income Tax Act also contains offenses which could lead to fines or jail time. An offense for failing to file a return could lead to a fine of up to $1,000 or up to 1 year in jail. An offense for tax evasion could lead to a fine of up 200% of the taxes owing or up to 2 years in jail. These penalties are per charge, so a failure in multiple years could lead to multiple penalties.
Governments take any threat to their authority to tax very seriously. Mr. Bragg, or anyone else who plans to participate in this protest, should consider finding a lawyer if they plan on following through on this threat, because they’ll need one.
Originally posted on www.piccololaw.ca, used with permission.
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