There's been some debate on this blog about the duty of accountants to their clients. A commentator has said:
Tax is an expense and any accountant doing his job properly has an obligation to act in his clients' best interests to use lawful means to mitigate the tax liability. The accountant cannot pick and choose which lines of expense he is prepared to mitigate.
The issue of an accountants duty has also been picked up by Dennis Howlett and Francine McKenna. Francine notes that:
Your first obligation as a professional is to your client, not your firm, your partners, or even your family. If your client is doing something illegal then it is to law enforcement. That may seem harsh, but it's the code that's supposed to insure that lawyers and accountants, for example don't cut corners out of their own self-interest and to the detriment of their client's interests.
As I wrote a while back I think both wrong (although the difference is fundamental with the commentator on my blog, one of emphasis I think with Francine). On reflection I think I'd refine what I said in that earlier blog. I'd say an accountant's duty (whether auditor or tax practitioner) is to act ethically. There are, of course, always going to be varying perceptions of ethics. What is beyond dispute is that the onus in question does, as Francine notes from the US AICPA's ethical guidance require that:
By accepting membership, a certified public accountant assumes an obligation of self-discipline above and beyond the requirements of laws and regulations.
The Principles call for an unswerving commitment to honorable behavior, even at the sacrifice of personal advantage.
A distinguishing mark of a profession is acceptance of its responsibility to the public. The accounting profession's public consists of clients, credit grantors, governments, employers, investors, the business and financial community, and others who rely on the objectivity and integrity of certified public accountants to maintain the orderly functioning of commerce. This reliance imposes a public interest responsibility on certified public accountants...In return for the faith that the public reposes in them, members should seek continually to demonstrate their dedication to professional excellence.
Due care requires a member to discharge professional responsibilities with competence and diligence. It imposes the obligation to perform professional services to the best of a member's ability with concern for the best interest of those for whom the services are performed and consistent with the profession's responsibility to the public.
This fundamentally contradicts the argument of my commentator who argues that the accountant has a duty to do anything legal, a position also argued by John Cullinane of Deloittes. Quite clearly this is not true. This ethcial code makes that abundantly clear.
Ethically a qualified accountant can refuse to do something legal for any client they wish, at their own liberty. They may do so because:
1) They are not able to do the requested task. No one has to act beyond their own capacity. Indeed they have a duty not to do so.
2) They do not wish to do so. I can pick and choose who I wish to work for. There is no obligation on an accountant to work for anyone.
3) I do not approve of what the client wishes to do, even if it is legal. There are numerous reasons why I would wish to do this - and have done this.
4) I think what the client wishes to do is anti-social, unethical, fraudulent without breaking the law, in breach of the good faith the public should have in an accountant, likely to lead me into disrepute, or my firm into disrepute or my other clients into disrepute.
I am under no obligation in such circumstance than to simply decline to act. If the client has done nothing wrong I am under no obligation to report them for any misconduct to anyone. But to say I have a duty to tell them about behaviour I consider unacceptable is plain straightforwardly wrong. No one can make me do that. Indeed, professional ethics require that I do not do that. If more accountants had stood up for their principles we would be much better off.
But let's also go a little further than this. I also completely refute that I am obliged to tell my clients in detail about all options available to them and then act on their instruction even if I do not approve of it. I would entirely accept that I must not hide facts from them. In other words, and to use the example as my commentator did of the non-domiciled person, I must not tell such a person of their option of claiming that status, and that this might under the law as currently constructed afford them tax advantages. But if they chose to make that claim there is nothing at all that requires me to pursue it for them or secure that advantage. I may always invite them to go elsewhere. I can even say why. I might lose a fee as a result: that is the price of ethics. All accountants should be willing to forego fees for this reason. If they have not there is something seriously wrong with their practice, I venture.
And as for the claim that I would be negligent if I did not set out all options that my client might pursue for them to chose which to undertake, and that this is my duty, I have fundamentally disagreed with this for most of my career, indeed probably since I was taught that this is what Peat Marwick required of me. My reasoning has always been simple. I think this completely unprofessional because it neglects the duty of a professional person.
A professional person has the duty to offer an opinion. It say that proper conduct is putting the client first by telling them of all the available options from which they then choose when offering tax advice means by definition that the adviser is not offering an opinion. They are being good technicians, but clients really do not want to pay top-notch money for accountants to copy and paste chucks out of tax text books or off the web, with a concluding paragraph which pretty much says 'call us when you've made up your mind'. This really is low grade stuff and I have had it put to me by clients that they really do resent the ability of the Big 4 to copy and paste text into letters, and do little more. Such actions do, I suggest, bring the profession into disrepute. And it is unprofessional because no opinion is involved and it fails fundamentally to meet the client's need. This therefore is not a case of putting the client first, but of failing them in the interests of covering the accountant's supposed risk.
The professional accountants duty is quite different. It is to listen to and understand their client. If the client has an attitude for high tax risk then in my case I ask them to go elsewhere. That is my right. We are not suited to each other. If however I have a client who I understand and whose needs I think I have correctly understood, noted and agreed (and I stress the importance of documentation and client agreement in this) then I can use my judgement in offering the client advice not on all available options they could choose between but on the actions I think in their best interests and meets their need. And because I have pre-vetted my clients to eliminate the rogues, charlatans and tax abusers, what I will advise upon is what I also happen to feel comfortable with. So long as I have done my job properly it will also be what they are comfortable with. Assessing that is where my risk lies, but this is a professional risk, not a technical one (I assume a professional is technically competent, it is a pre-requisite, not an optional extra).
My clients know that my advice will allow them to sleep easy at night: which is exactly what they want from me. They want to know what they can do within the law, with minimal risk of investigation, with maximum chance that the tax they pay is acceptably low but beyond challenge, and that I have taken the risk of ensuring this is the case off their shoulders.
That I think is what meeting client need is. Those accountants who think it is asking the client to choose between tax abuse options 1, 2 or 3 are I think wholly unprofessional, simply because they are acting as technicians.
This is what accountants have done for far too long. They have sought, as Dennis Howlett has discussed elsewhere in the last day or so, to live by the rules. That's not good enough. In fact it is a recipe for failure. And it is unprofessional. A professional has to live, as the AICPA says, "above and beyond the requirements of laws and regulations". This requires the exercise of judgement and the expression of judgement. When doing that there is only one place where an accountant can safely operate: well within the rules. Anything else will eventually bring the profession into disrepute, as it has.
Until we are a profession, expressing judgement, working within the rules, and showing that we understand our duty to the client comes after that to ourselves, our profession, our firms and society at large we have no chance of reclaiming our status in society. And society is at risk from us. If we don't act they will. I know the better option.
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I agree with you Richard – as you know.
I’ve also thought of another argument against the suggestion that all accountants are obliged to notify their clients of all available ‘legal’ tax schemes. You’ve alluded to it in your piece above.
To advice clients about all such schemes the accountant would first need to acquaint him/herself with them all. Not just to find out that they exist but also to develop a sufficiently detailed understanding of the schemes to be able to make up his/her own mind as to the risks. Only then could he/she advise clients of such risks.
Only a minority of accountants are interested and willing to devote the necessary time to such activities. Are those who fail to do so failing their clients? I don’t think so.
An alternative approach on becoming aware of such schemes would be to:
– tell clients that they exist;
– explain that you have yet to ascertain the risks;
– that you will investigate them and form a view if the client will pay for you to so do; OR to refer the client to someone whose view will be less objective as they are remunerated out of commissions for selling the schemes.
I doubt many clients – except those already known to have an appetite for risk – would countenance such an approach.
Is there a legitimate third option?
Oh dear Richard I do seem to have struck a nerve !
Let me get this straight. The courts of the land consistently deem tax mitigation to be lawful if the tax planners follow the rules, but that’s not good enough for you. The UK government specifically enacts legislation to enable non-doms to lawfully shelter their overseas income and capital gains from UK tax but that’s also not good enough for you. You somehow still consider this to be abusive even though those responsible for telling us whether something is abusive or not are confirming that its not !
You are very simply allowing your personal moral views to overrule the law of the land, and in the process you deny your clients the opportunity to participate in lawful tax mitigation. I’m sorry but you can try to dress it up anyway you like….you are putting your interests ahead of those of your client and that is totally unprofessional.
As far as I can see, the only get-out option for you is to spell it out in your initial engagement letter with every new client that, regardless of what it costs your client, you will not assist in any way with any tax mitigation planning, no matter whether it is expressly legal or otherwise. If any clients of yours share your view about tax mitigation then you have a happy client relationship. If not then at least you have covered yourself against a PI claim. In all other circumstances I think you are exposed to a claim of putting your own interests ahead of the interests of your clients.
This whole topic has actually served to undermine your credibility in many of the assertions that you spout about tax havens. Even if something is expressly lawful you somehow consider it to be abusive.
I have no problem in you holding that view as its tour perogative, but please don’t be surprised when people like me throw it back at you when you accuse offshore finance centres of behaving irresponsibly when you are on record as deeming expressly lawful tax planning, effectively endorsed by HMRC and by the UK courts, to be abusive. When you cannot even recognise that distinction, many of your claims about offshore finance centres are simply destroyed as unsubstantiated personal propaganda.
However, I do fully distinguish between lawful tax mitigation and outright tax evasion and I support your stance that tax havens should in no way be facilitating the latter. But there is a very clear distinction as tax evasion is unquestionably a crime and cannot be condoned.
Mark
Your position is an entirely valid alternative to mine: I am saying I will always refer on rather than investigate. But that’s only a variant on a theme.
Best
Richard
David
Quite frankly what you say is bunkum. You assume:
a) You know the law of the land. I can say with certainty you don’t. It is not possible to do so. We would not need courts to interpret them if you did.
b) The government sanctions tax avoidance: no it doesn’t. It tries to block it when it finds it. Where have you been?
c) I deny my clients options. No I don’t – I say I won’t do things for them. Nothing stops them going elsewhere.
d) The client comes first – when as I have shown that is clearly not true.
e) You always know the difference between tax evasion and tax avoidance. Bluntly, I don’t believe you.
We fundamentally differ. I put ethics first. You put tax abuse first. I’ll leave others to decide which is more professional.
You are, of course, typical of the amorality of the offshore world – which seeks excuses to operate (the excuse usually being ‘it’s legal here’ – I’ll ignore the consequence elsewhere) – and in that sense what I say reinforces my argument against tax havens. That you can’t see that is your problem: you are not the audience I am addressing. Yours is the practice I am trying to eliminate.
Richard
Your post
a)You look at the courts decisons in their interpretation of the law to know the law. How can you say it is not possible to know the laws of land? laws would be useless if noone knew them, why would anyone hire a lawyer? according to you they don’t know the law of the land either.
b)Yes they do, look at the recent resident non dom rulings. Did the government just sanction that resident non doms still don’t have to pay tax on all their worldwide income, or even inform the tax man of all their worldwide income if they pay a 30,000 tax? yes they did and so the Giv just sanctioned tax avoidance.
d) As you wrote here http://www.taxresearch.org.uk/Blog/2006/07/06/an-accountants-duty-is-to-do-the-right-thing/. “An accountants number one duty is to themselves “, not the client (sic).
e) You might not know the difference between tax avoidance and evaision, but luckily the courts and the law do.
Creg
I am amazed the simple black and white world you live in. I think my sons at six and seven live in a place something like the one you’re in, some of the time. But even they call it ‘make believe’.
Richard
Richard
I must have missed something. When exactly was the Duke of Westminster decision overturned ? The principle that a UK taxpayer is not obliged to arrange his affairs to result in the maximum tax liability is as valid today as it was 80 years ago. Tax mitigation is still lawful according to the highest courts in the land. That’s fact whether you like it or not. Court cases these days hinge on whether specific tax avoidance schemes are abusive or not, but the underlying tax mitigation right remains.
So the tax code does not expressly allow tax avoidance does it? Wake up and smell the coffee! Non-doms, potentially exempt IHT transfers, incorporation relief etc…are they all figments of my imagination ? How about offshore trusts and how the CGT attribution rules do not apply outside the spouse, children and grandchildren classes ? These are legitimate tax planning arrangements which HMRC specifically introduced yet in your view they are abusive and high risk and so you won’t offer them to your clients because you simply don’t like them
You say that I don’t know the difference between tax avoidance and tax evasion. I am confident that I do but when you clearly believe that specific tax planning opportunities expressly provided for within domestic UK tax legislaton is abusive then I have to question your credibility to make such a comment!
The law as black and white, although constantly evolving. The law is the law.
Morals are prejudgements pushed on to us by mentors, and experience. Everyone’s morals are different and are thus the grey area.
You seem to want the accounting profession to not even be guided by their own morals, but YOUR morals. why?
For the US certifieds “By accepting membership, a certified public accountant assumes an obligation of self-discipline above and beyond the requirements of laws and regulations.
The Principles call for an unswerving commitment to honorable behavior, even at the sacrifice of personal advantage.”
Now that is vague, can you imagine a law being introduced with the words “non-honorable behavior is against the law”. Honorable means something different in the eyes of different people.
David
As seems so typical of those of you who argue from the Right, you seem to have not read what I have written, or to address the points I make. So sure are you of your own viewpoint that debate appears beyond you.
Note that point from the AICPA:
“By accepting membership, a certified public accountant assumes an obligation of self-discipline above and beyond the requirements of laws and regulations.”
Note I am also talking duty here: an ethical issue, not a legal one.
The AICPA is clear: the accountant has a duty beyond the law. What may be legal may be unethical.
Tax compliance is legal, and in the sense that the AICPA note, above the law: there is not a question about the fact that if done within a state that intends that a benefit be granted by a taxpayer who has suffered the economic consequences of securing it, then of course the taxpayer may enjoy it.
But in 1936 it was clear that the State did not intend that the taxpayer pay his gardener by deed of covenant. It transpired the law of the land at the time (but not now) let him do so. Any wise accountant acting ethically would have advised him not to undertake such a transaction, in my opinion. Those who created that scheme did, in my opinion, bring their profession into continuing disrepute.
This is an ethical viewpoint. When will you notice that the law (a transient, moving target) is not the same thing? Please debate the issue I have raised, or please do not bother to comment. So what that tax avoidance is possible is a point I have made repeatedly – no accountant should do it. You appear unable to comprehend that.
Which does not, for one minute mean that tax compliant behaviour is wrong.
Now please either debate the ethical and professional issue, or please give up.
Richard
Creg
Your argument leaves me gob-smacked (to use the vernacular). Are you asking me to take you seriously?
I guess you should seek advice on what the law is: any good lawyer will tell you it’s uncertain. Your opinion is, quite literally, incredible.
So too is your argument on morals. You say I am imposing my morals on the profession. Then you note that all morals are imposed, which does therefore justify my wish to impose mine, as you accsue me of doing. But you then argue that the profession should not impose any resulting moral code on its members, and deny that when it so clearly does (as the AICPA makes apparent) that it is providing meaningful guidance, when it is quite clear that those who wrote that statement clearly felt they were.
But as I said, the type of practice you are defending is not professional. Maybe that’s why you feel yourself beyond professional ethics. But it’s also why the professions should weed activity of the sort you and David appear to defend out by removing from membership those who pursue it.
It is in fact their moral duty to do so under the terms of the licences to operate they hold from the states that grant them.
Richard
you said “This is an ethical viewpoint. When will you notice that the law (a transient, moving target) is not the same thing? Please debate the issue I have raised, or please do not bother to comment. So what that tax avoidance is possible is a point I have made repeatedly – no accountant should do it. You appear unable to comprehend that.”
Do you still have clients? Wonder how many of them are aware of your stance, and that you are costing them money?
Richard
A Palistian accountant may not want to take a Jewish clients money, due to his ‘morals’. According to you then all accountants should have to stop accepting Jewish clients as you want the profession to include everyone’s morals. Its unworkable and rediculus
Should we stop taking clients that are gamblers, abortionists, politicians, etc.
I act with in my morals, the laws of my State and the Institutes ethics, just not your ethics there is a big difference! That makes me the consumate professional, just not your sycophant.
Alastair
I do have clients
Some have been with me for 25 years
They know exactly how I work
I do not cost them money in tax lost – tax compliance means I claim all allowances to which they are entitled. Some they forego, at their choice.
But then I supply peace of mind
That’s my value proposition. It always has been. And it’s been very successful
You might say it’s the fulfilment of the old ICAEW campaign ‘It’s easier to sleep with a chartered accountant’.
It certainly wouldn’t be with you guys
Richard
Creg
Does the AICPA give specific guidance on how to interpret their moral code? No, it does not.
Nor do I.
I argue, like them, that we have a moral code over above an beyond the law, and that if we are over above and beyond the law, and cannot break it, that means we must be well within it.
That does not mean we will all act the same. I could and have acted for both Palestinians and Jews. That has not presented me with a dilemma. I can well see it might for some. So, as I have suggested (and which you appear to think impossible) they would decline to act. That is their choice. A valid and appropriate choice WITHIN the law.
Just as it would be permissible for a person to refuse to act for gamblers, abortionists and politicians WITHIN the law.
It is not however possible in any way to extrapolate that and say I must act at the limits of the law, especially when (despite your claim of omnipotence and clairvoyance) it is not possible to know where that limit is. That puts me and my client at risk of acting beyond the law.
Acting within the law is what is expected of an accountant. Acting beyond it is undoubtedly unethical. We can differ within the law. You cannot ask me to take risk of acting beyond the law. That is the difference between being professional and not being so. That is what the code of ethics says.
I venture to suggest I am complying and you are not. I wouldd expect the man on the Clapham omnibus to agree with me.
But at no point am I imposing on you: all professional bodies have broadly similar expectations. You are ignoring them. Why?
Richard
Actually as a member of the ICAEW I am not ignoring my professional bodies expectations.
I agree it’s up to the professional in accepting a gambler or not as a client, according to your own ethical code as I stated above.
But the example was that you believe the whole profession should adhere to Richard Murphy’s morals, not their own.
For the case of accountants servicing people in legally minimising their taxes:
Extracts from the ICAEW code of conduct:
p527 2.4 A member’s duty towards the tax authorities is to comply with the appropriate legislation and the common law when dealing on behalf of a client with a matter which is governed by tax law.
p536 2.44 tax related offenses involve evasion and NOT avoidance. (I added the caps)
What an interesting discussion!
Just to clarify a few of the points I made…
When I say that a professional’s first obligation is to their client, I meant that only when and if the accountant accepts the client or engagement as his own. He has the choice to accept the individual or firm as his client (or to accept a particular new engagement for an existing client.)
As Richard says, performing due diligence including evaluating a potential client or a new engagement for an existing client in light of your own risk profile as a licensed professional and an accountant before accepting the engagement is vitally important. It’s an exercise the large public accounting firms are supposed to be doing and includes also evaluating risk periodically to determine if the client should remain your client.
A good example of Richard’s point where a client’s activities are technically legal, but unfortunately “not our kind” from a risk/reputation perspective is casinos and pornography. In the United states, the audit firms have clearly decided who is comfortable auditing (consulting is a different thing) the “sinners” even though the activities may be part of a public company and are perfectly legal.
Richard
What possible relevance is it what the courts did or did not envisage way back in 1935 ? It is a fact that the courts since then have continuously and consistently reinforced that decision.
You make no comment on my evidence that the tax system does expressly provide for lawful tax avoidance despite your earlier assertation that it does not !
I feel that I have already debated the point in question and nothing you have said in response has made the slightest difference to my stance. Indeed, if anything it has convinced me even further that your own stance is not supported by the ethical guidelines of your own institute, as very ably summarised by Creg.
We both feel that our respective stances are correct and both feel that the other is coming from the opposite extreme. Neither of us is going to convince the other that we are wrong in any academic argument because we both passionately believe that we are right ! However, I don’t go around falsely accusing you of acting in a criminal manner, which in effect is what you accuse everyone involved in legitimate offshore tax planning of doing, regardless of the fact that HMRC accepts the planning that we do as being valid and lawful. Actually, I would say that this is something of a meaningful endorsement by HMRC that such offshore tax planning is far from being unlawful or abusive.
David
You are right. We will not agree.
But I do wish you’d also get your facts right. HMRC (and I) have no complaint about tax planning – so long as it is tax compliant. That is not the same as what I call tax avoidance and which they tend to call aggressive tax avoidance. That is wholly unacceptable to them. As you’re well aware, they have sought to curtail it and much offshore abuse has been stopped as a result.
That does not mean aggressive tax avoidance is illegal: it is not, until made so. Some is though: practitioners cannot always draw the line in the right place, as we all know. But is stress: I am not accusing you of acting illegally per se: I am accusing your stance of being unethical.
I also happen to think most offshore tax planning is at risk of being illegal: it, by definition, covers more than one jurisdiction and the chance of it therefore falling foul of one or more expands considerably, a fact that most offshore practitioners turn a blind eye to by asking their clients to get tax advice ‘elsewhere’ and exonerating themselves of responsibility as a result, because it is clear many also fail to follow up on this issue, thinking the request is enough.
Get offshore right and it can be legal. But for the small amount that is does not, and never will, excuse the vast abuse that goes with it.
That is why ethically tax havens must be closed.
I’d apply for a new job if I was you. the writing is on the wall.
Richard
David – I wouldn’t be rushing to the employment agencies just yet. I well remember when I started in the offshore financial world in 1973 – the MD of my employer called me in for an initial chat – inter alia he said he was glad that he was not just settng out as the offshore world would be finished “in 5 years”! We all know what has happened subsequently.
[…] and awareness of the role of the audit industry in the capitalist system from Dennis Howlett, Richard Murphy, and Edith Orenstein. I’m always surprised and pleased when they find my thoughts worthy […]
Clarke – don’t worry I won’t. The day that Richard Murphy’s wish list becomes reality is a long way off. Having said that, I am prepared to agree with Richard that the offshore world will continue to change, as indeed it has over the past 3 or 4 years. Transparency and exchange of information will increase and I don’t have any problem at all with that. The modus operandi of the offshore world varies dramatically and several jurisdictions (mainly but not exclusively in the Caribbean, plus Switzerland, Liechtenstein and Singapore) are still operating as they were in the 1970s, refusing to accept the need to change. Other jurisdictions are being far more pro-active, and they have a chance if they continue in that vein, although their efforts could very easily be undermined by a small number of rogue operators. Its a time of change, but offshore will survive, albeit not as we may know it today.
Despite Richard’s views, the UK courts show no sign of materially changing their stance towards proper offshore tax planning which does not rely on non-disclosure, and which is properly implemented. Those who play by those rules will be fine. Those who don’t are already facing tough times.
Richard – its very obvious what’s on your wish list for 2009. Near the top of my wish list is to see you go head to head in a live debate with Dan Mitchell who will eat you alive. Should be very entertaining.
David
It’s been done http://www.taxresearch.org.uk/Blog/2008/04/14/do-ofcs-contribute-to-the-health-of-the-glocal-economy/
I wiped the floor with him – even senior people from the BVI said so
The man was like a lost sheep
Richard
Really Richard ? There are many who would regard your posting of the “debate” with Dan to be somewhat inaccurate and one-sided.
David
It laid Mitchell low
You said, and he thought, that wouldn’t happen. I’m making a simple observation – he wanted the debate – and he lost it
He’s never asked for a rematch, I note
Richard
Richard
If we accept your argument that morals should take priority over law, is it OK to use tax planning (even offshore) to avoid taxes which one considers immoral?
Many people, indeed probably the majority, would feel that inheritance tax is immoral, i.e. taxing wealth which has already suffered tax. I assume you would advocate legitimate tax planning in this area?
You have also made comment about how you were trained, i.e. your comment re Peat Marwick.I am sure that the vast majority of the profession disagree with your views and I am also sure the average man on the street would welcome legitimate tax planning to reduce his or her tax bill.
Don’t you understand the concept of majority rule in a civilised democracy? I am actually quite satisfied that your views will never actually be taken seriously either by the profession or the population in general and I am quietly confident I will still have a job in the offshore world long after you/Obama/Sarkozy and the other do-gooders have departed your current positions.
PJM
Outside the professions and the wealthy elite I think the majority agree with me
That is democracy – making choices best for society as a whole, not just its elite
Inheitance tax benefits 93% of people in the UK. Whose side do you think most are on?
That’s why we will win
Richard
Richard
You will never win because the issues just aren’t important enough to the man on the street and, despite what they may say, the politicians don’t really have the appetite to go after the “tax havens”.
Think about the political implications for one second…..
Say the revenue collect an additional £10bn per year from the closure of “tax havens”. Thats the equivalent of approx 3p on income tax. Now, if you are the opposition party engaged in propoganda against the government, you can quite rightly claim that the tax take has risen under this government and is costing every man, woman and child…..you know the rest!
The government (Labour or Conservative) would also upset many of it’s wealthy supporters which considering the state of party finances, they are not going to do.
You want to live in an ideal world but unfortunately this does not exist. I would be willing to lay a substantial bet that you and your followers won’t win and in ten years time nothing will have significantly changed to harm the offshore world. We may have to change to cope with new legislation but all that will do is provide new opportunities for the creative.
I notice you didn’t answer my point….is it morally OK to avoid an immoral tax? I also disagree with you on inheritance tax, you will find it is hugely unpopular and more and more “ordinary” people are being caught by it due to rising house prices over the long term.
PJM
If you were to hear the diplomatic representatives of governments talking here in DC today you may not be so confident in your position…..
As for an ideal world – that’s an impossible dream. But I can get rid of the obvious flaws. Offshore is one of them
And Inheritance Tax – what is immoral about it? It’s one of the fairest tax we have. See http://www.taxresearch.org.uk/Blog/2006/07/31/lets-be-clear-inheritance-tax-is-not-doube-taxation/
Richard
Richard – you really are naive if you believe what you hear from diplomats! They are fond of saying what their audience at the time wants to hear – real actions and events are a matter of realpolitik. PJM is correct.
Clarke
Easier to misinterpret when backed with hard cash though, wouldn’t you say?
Richard
I think the will of government will now become apparent.
Now that the UK Government has effective control of RBS, do you honestly think their priority will be to close its offshore business? If they don’t, I believe my point will be proven.
Interesting times ahead but my gut feeling is that they won’t interfere with the offshore operations of the banks they will soon control (assuming RBS is only one of many to come).
When it comes to making a business decision, they will weigh up the cashflow benefits and capital the offshore business contributes to the group and come to the conclusion it outweighs any possible tax gained from closing their operations.