This is a complex area and some of the detail discussed above is not 100% accurate. I can say that, having been immersed in this zone for the last 43 years.
But first consider that every time you do business with someone, they may not pay the tax due, and keep it to fund a lavish lifestyle. This is especially true with VAT on large value items, but equally true when you pay cash to a tradesman to get a discount. Many of us will have done this at least once in a lifetime.
When you need the state, for example, hospital treatment - if you don't get the service you would like, or are denied treatment due to cost, just bear in mind that if everyone was honest and paid what tax was due, not only would public utilities be better funded, but the tax rates would be less, because you (as an honest tax payer) wouldn't be funding the evaders and avoiders.
At present there is an on-going robust challenge on avoidance schemes, and several high profile schemes have failed at tribunal recently. The key issue is that many schemes are artificially created to avoid tax, without a commercial reason, and case-law is slowly unravelling these artificial schemes.
Celebrities are right in it, because word gets around, and you only see the tip of the iceberg in the public domain. Much more goes on behind the scenes.
The big companies are certainly guilty of tax planning, and remember that shareholders drive the need for profit - but governments are equally guilty of pushing low rates of Corporation Tax to get big business on their patch. You may recall that this was one of the big SNP issues as part of the referendum.
But the smaller business avoids tax using all sorts of scams, which is low level evasion, mainly around manipulation of legal entities, contrived insolvencies and phoenixism.
Before that though is simple extractive fraud which revolves around suppression of cash and secret bank accounts. Any business which takes cash will be doing this at some level. Think pubs and restaurants, and small shops.
The proposed mansion tax is an interesting one, and the wealthy owners of 'mansions' seem to resent these proposals. And yet in London, There are cases of well respected professional people hiding large property deals, and this is widespread, and brings in significant amounts of tax (Capital Gains).
So if you ever receive a 'Nudge Letter' suggesting that you may wish to disclose income or assets, the earlier you co-operate, the bigger the reduction in penalty when it all ends.
