Avoidance v Evasion

No one particularly likes paying tax – and people will go to great lengths not to. But what’s the difference between tax evasion and tax avoidance. The media often use the terms as being interchangeable but there is a real and straightforward difference. Evasion is illegal, avoidance isn’t.

Tax avoidance is arranging your financial affairs in a way that keeps your tax bill down. It could be as simple, common sense stuff right the way through to complex tax structures.  Whilst there is nothing illegal about tax avoidance companies and individuals, like Bono, who use complex and artificial structures can find themselves in the spotlight for all the wrong reasons.

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