On the basis that there is no such thing as bad publicity, the current obsession in the global press concerning tax avoidance should be a good thing for tax advisers – right ?
Here’s what I think …
Intuitively, it seems wrong doesn’t it ? You would think that the negative focus on tax avoidance would drive people away from using creative tax strategies because of the increased perceived risk of a challenge from the tax authorities.As a consequence, you would expect that this would be a bad thing for tax advisors.
Certainly in the case of ‘packaged schemes’ , I think it likely that demand will decrease – in fact if might very well collapse. By ‘packaged schemes’ I mean those such as the one used by Jimmy Carr to avoid his UK income tax bills. As well as income tax – packaged schemes can be used to eliminate Stamp duty, Corporation tax, Inheritance tax, VAT and just about any other tax you can think of. Sounds tempting doesn’t it ?
The problem is that these packaged schemes that are now under very close scrutiny of HMRC and given the current climate, the inevitable challenge by them is unlikely to end up favouring the tax avoiders. Oh dear …
But that’s not what tax advice is really all about. Package schemes are commoditized tax advice peddled by greedy financially savvy marketeers posing as tax advisors. The truth is that ‘Proper’ tax advisors hate packaged schemes and always have done so. It’s lazy and wrong to presume that a one size fits all approach can be applied to such a complex discipline.
‘Proper’ tax advice is about taking the time to understand the client’s particular circumstances and to understand their personal financial objectives. Proper tax advice is tailored to meet these requirements. Proper tax advice takes into account the nuances of the anti tax avoidance legislation on the statute and seeks to address it proportionately within the context of the intention of Parliament. Proper tax advice is appropriate and is about tax mitigation, rather than tax avoidance.
The current climate will drive clients away from tax avoidance toward tax mitigation and this, I think, will prove to be a boon for Proper tax advisors. The future is rosy for tax advisors !