Goodier Smith and Watts

Devonshire House
Manor Way, Borehamwood
Hertfordshire, WD6 1QQ

Search News


What is tax avoidance?

Source: HM Revenue & Customs | | 16/06/2022

There is a distinction to be drawn between tax avoidance and tax evasion. Tax evasion is illegal and describes a situation where someone acts to deliberately evade tax. This could include deliberately submitting false tax returns, falsely claiming repayments or reliefs or hiding income, gains or wealth offshore.

Tax avoidance on the other hand can describe a situation whereby a taxpayer takes advantage of the tax rules to reduce the tax they pay without breaking the law.

However, the lines between the two can get blurred as can be seen in the comments made by HMRC below. 

HMRC’s own guidance to help taxpayers spot the signs of tax avoidance, states that ‘tax avoidance involves bending the tax rules to try to gain a tax advantage that was never intended. It usually involves contrived transactions that serve no real purpose other than to artificially reduce the amount of tax that someone has to pay. It is not the same as effective tax planning but is often promoted as such'.

There is of course no restriction on taxpayers taking full advantage of tax reliefs and allowances in the legislation. This is not tax evasion [or tax avoidance in HMRC's terms] rather just paying the minimum allowable without breaking the law. Again, the lines between tax avoidance and tax planning can also get blurred. If you are approached to take part in a tax avoidance scheme, it is important to take proper professional advice and be aware that HMRC does not condone the use of schemes that they see as promoting tax avoidance.



 

Latest News

Duty free limits if you are travelling abroad
04/08/2022 - More...
Here is a reminder of any duty payable and tax-free allowances if travelling abroad this summer. If you are travelling

Tax-free trivial benefits
04/08/2022 - More...
There is a benefit in kind (BiK) trivial exemption that applies to small non-cash benefits like a bottle of wine, or a

Using Advisory Fuel rates
04/08/2022 - More...
The easiest way to ensure that no car-fuel benefit charge (for private journeys in a company car) is payable, is to use

Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login

 

 

ICAEW-BLK RGB  

 

Save

Save

Copyright © 2022 - Goodier, Smith and Watts

Cookie Policy | Website Privacy Policy                                                                                                                                                                                                                                                         

Registered in England under the number 3724657