Tax avoidance: the legal way to pay less?
Tax avoidance means reducing your tax burden by legitimate means. Make sure you don’t confuse it with tax evasion, which is illegal.
According to Denis Healey, the difference between tax avoidance and tax evasion is the thickness of a prison wall. The former Chancellor of the Exchequer was spot on. If you’re having trouble making the distinction between evasion and avoidance or are just seeking expert advice, please speak to the inTAX team now.
Be mindful when thinking about Tax Avoidance
Tax avoidance is a way of legally minimising a tax liability. The celebrated US judge Learned Hand said in 1934:
Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.
Although tax avoidance is quite different to tax evasion – which is tax fraud and is illegal – HMRC and the press sometimes like to present it that way. Previously, tax avoidance ‘schemes’ or arrangements were being sold on a mass market basis – that’s not the case so much now, but some are still available.
Some of the schemes worked, but more often than not, schemes like EBTs, EFURBS and Film Schemes have either been defeated in Court or are subject to new and challenging legislation like Follower Notices, Accelerated Payment Notices and the new ‘April 2019 Loan Charge’.
Unfortunately, clients are having to accept that the promised result simply won’t be achieved, and the arrangements need to be unwound or settled. We can help you understand the pro’s and con’s so you can make an informed choice.
We don’t sell schemes, and we never have. But we have helped many clients understand the arrangements, whether they are effective, and if not helped them through to settlement, ensuring that the right amount is requested, all reliefs are claimed, and negotiating time to pay . In some instances, the failure of a scheme can lead to threats of liquidation or bankruptcy and if it is unavoidable, we can help you through this process.
Tax investigations into tax avoidance can be as lengthy and as stressful as other tax enquiries. inTAX is experienced in dealing with all types of tax investigations including tax avoidance cases.
How inTAX can help
We can help you by:
- Examining the principles of the tax scheme or arrangement
- Looking critically at the implementation of the scheme or arrangement
- Liaising with HMRC on the client’s behalf
- Researching existing case law and pending appeals
- Negotiating settlements on the best possible terms
- Minimising any applicable penalty
- Negotiating time to pay