Tackling day-to-day tax avoidance

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Rebecca Bennyworth has asked the elephant in the room question on tax avoidance in a guest post on Jolyn Maugham's blog. That question is a simple one, and is whether or not it is acceptable to incorporate a small business solely to secure tax and national insurance advantages, the benefit of which Rebecca accurately outlines.

I admire Rebecca's courage. First of all as a well known tax lecturer and chair of the ICAEW Tax Faculty (of which I am a member) she will get flack for doing this. Second, the question is hard because the answer is not clear - which is precisely why it does need to be raised.

I have addressed the question before - and proposed reform to address it because in my opinion the status quo is absurd and unsustainable as well as being unjust. But in that case where is the profession, which as Rebecca says routinely advises people to behave in this way and yet in the eyes of many this will be blatant tax avoidance?

I recommend a read of what Rebecca has to say - and of my policy suggestion in which the data is now out of data but the principles remain entirely intact - because it is not just the esoteric that needs to be addressed in the tax avoidance debate, the day to day needs to be considered to, and nothing is more routine than this.