For many people, tax avoidance is the legitimate use of tax laws to reduce their tax liability and is a perfectly acceptable arrangement which cannot be criticised. For others, it is morally repugnant and demonstrable of a criminal intent to defraud the government of revenues to which it is properly entitled. However, tax avoidance is not a crime.
Tax avoidance is used to describe the operation of a policy, scheme or arrangement which seeks, directly or indirectly, the exploitation of tax loopholes to avoid the payment of tax and reduce an individual or business’ tax liability or the wholesale avoidance of this tax liability, which is illegal under the various tax legislation.
Although the term “illegal” can be applied, it only applies to the civil liability. However, this can still lead to a large claim which can result in an individual or business’ insolvency.
Where a deliberate or fraudulent avoidance of tax is found – for example deliberate under declarations of income, failing to register and pay taxes or deliberately seeking to avoid taxes without any justification, then this can lead to Code 9 investigations and, potentially, prosecution.
At Francis Wilks & Jones we have considerable experience of negotiations with HMRC, including accelerated payment notices, personal liability notices, VAT and PAYE security or appeals to tax tribunals or insolvency claims by liquidators.