Churchill Taxation
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Is tax mitigation immoral?

April 25th, 2014 by

I am morally repugnant – according to the chancellor.  Well, I don’t think he was talking about me personally.  But the comment was aimed at tax advisers who assist clients in minimising their tax liabilities.

I have never been a great fan of “tax schemes” but they had their place for the right kind of clients.  However, it looks as though those days are well and truly gone with all the changes in recent years.  I can’t say I will lose any sleep over the loss of the highly aggressive schemes as there is no doubt that a lot of taxpayers just saw a reduced tax bill and didn’t actually think about what they were getting into.  Not a happy combination – greed and blindness.

But those days are pretty much gone now.  We are back to good old fashioned tax planning.

And the question on everyone’s lips – is tax planning immoral?

Personally I believe that if we insist on making tax a moral argument we should rip up the 11,000 or so pages of statutory legislation we have in place and replace it with a moral obligation to pay a rate of tax.

The problem is… what does morality mean to you?

The argument is fraught with difficulty and there is no easy answer.  The truth is that taxation isn’t a moral code, it’s a legal code.

If you evade your taxes, don’t declare your taxes, lie to HMRC about the level of your income or the level of your expenses, whether or not this is immoral is irrelevant – the fact is it is illegal.  And you will pay the consequences if and when HMRC find out.

If on the other hand you structure your business so that on exit you ensure your tax liability is restricted to 10% by the use of entrepreneur’s relief.  Or you use a discretionary trust to shelter some of your assets from IHT on death – is this immoral?  Well that depends on whether your moral compass says you should pay the maximum amount of tax permitted by law or whether your moral compass says that legally and legitimately reducing your tax bill is acceptable.  That’s a personal choice.

And at Churchill Taxation Limited that’s what we are all about.  We give you the choices and you decide what you are comfortable with.

There is no point in putting tax planning in place if it doesn’t meet your personal and business objectives.  We can’t tell you how to structure your tax affairs but we can work with you, provide you with the options and help you decide what type of planning is right for you.  And there is always an option to do nothing – and believe it or not for some people this is the right thing to do.

There is more to life than worrying about tax.

But if you are worried about it – give us a call and we can see if we can take some of the pain away.

Stephanie

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