Tax was high on the agenda last week, not only because of the last minute rush that 31 January brings every year. The on-going debate over tax avoidance took a new turn as the heads of tax of the Big 4 accountancy firms were interrogated by the Commons’ Public Accounts Committee.
The whole question of the ethics, commerciality and acceptability of tax planning is a thorny issue that one could examine at length. So far the spotlight of journalistic and political outrage has focussed on Big Business and Celebrity but the one certainty in all of this furore is that the fallout will feed into the entire tax system, affecting individuals and smaller, UK based businesses.
We are already seeing the effects of the political and fiscal desire to eradicate tax avoidance – the ‘outing’ of taxpayers who signed up to schemes now considered ‘unacceptable’, increased prosecutions for evasion, recruitment drives by HMRC and yesterday’s announcement that the Alternative Dispute Resolution approach will be extended to SME’s and individuals.
So what to do?
Philosophical arguments aside, at the very least it would be sensible to think about how your tax affairs are structured. If you have any tax planning in place, does it fit with your current appetite for risk? Popular opinion can be a key influence, especially for a retailer for example. We can be your sounding board as you think through the issues.
The morality or appropriateness of a scheme is a subjective question, its compliance obligations less so. Are you satisfied that you have covered off all the compliance aspects of the planning e.g. adequate evidence, disclosures and maintenance? If you have concerns our tax experts can help you decide whether there is some housekeeping needed.
And finally, keep informed. We will be following this debate closely and will continue to provide guidance and comment. We would welcome your perspective too. Please speak to your normal Hazlewoods contact to discuss this issue further.