April 12th, 2012

Tax Scheming – Never heard of it? Thats because I’ve just invented it!

Tax avoidance is legitimately organising your affairs so you don’t pay more tax than is necessary. Tax evasion is doing things against the law to keep your tax bill down – like not declaring cash.

Tax avoidance is big news at the moment thanks to the London Mayoral election and from the generally negative comments it is a much misunderstood subject. I’ve read numerous comments that everyone should just be on PAYE and that would solve the problem. But that’s not how the world of small businesses work. You can’t expect a customer to set up a PAYE scheme to pay a plumber to fix the heating.

Tax avoidance is also discussed as if it’s a singular activity. In fact there’s a whole spectrum of things which are legal – some which raise more of an eyebrow than others. Putting money in an ISA to avoid paying tax on the interest is tax avoidance. As is giving money to charity or putting it in your pension scheme.

At the other end of spectrum are complex, often off shore, arrangements which are deliberately contrived to avoid tax. These schemes are dreamt up by clever lawyers and accountants to exploit loopholes. They’re also very secret in respect of how they work as it’s highly commercially sensitive information. This is the stuff that leaves a bit of a nasty whiff and this is what I’m calling Tax Scheming.

Politicians could do themselves a big favour by attacking Tax Scheming rather than getting carried away on the band wagon that all tax avoidance is morally wrong. To do otherwise will lead them in to continually backtracking as they discover giving a tax incentive for certain behaviour can actually be a good thing.

Share this post

Filed under

Tax avoidance

by
Managing Director

Jonathan trained as a chartered accountant with Price Waterhouse (now PWC) in Liverpool before becoming a small business services manager for Grant Thornton in Warrington. He also spent three years as the financial controller for Brookside and Hollyoaks (not that he ever mentions it!).

Jonathan is recognised as a specialist in the entertainment industry and is often called upon to provide training courses and seminars for media professionals. He's also a bit of a technology geek and has been recognised with the accountancy industry as one of the most progressive accountants in the UK.
Outside of work Jonathan is very proud to be the Treasurer of the Tim Parry Johnathan Ball Foundation for Peace and to be on the Council of the Liverpool Institute of Performing Arts (LIPA)

Give a Goat

Give us a referral and we will donate a goat to a family in Africa

Find out more

Our Newsletter

Enter your email address to subscribe to our mailing list.
  • This field is for validation purposes and should be left unchanged.