ICAEW Issue Helpsheet on Aggressive Tax Avoidance Schemes

The ICAEW has issued guidance to its member accountants to consider when dealing with potential tax avoidance schemes for their clients.

Whilst such tax avoidance may be legal, the question of ethical behaviour is also brought into play by the guidance.  The guidance probably is to some extent a response to recent press coverage regarding certain artificial tax planning schemes and their use by celebrities.

The ICAEW recommend that amongst other tools/methods at their disposal, the advisor should use their own judgement on whether the scheme is artificial or not by considering the following:

  • The scheme is too good to be true
  • Apparently guaranteed returns with no risk
  • Confidentiality Agreements
  • Scheme Promoter lending funds
  • Offshore companies, trusts and tax havens are involved for no reason
  • Over complex arrangements for what is required

Eaves and Co recently conducted a poll on Linkedin regarding attitudes to tax avoidance and found that respondents generally view tax avoidance as acceptable, whether it is ethical or not as long as it does not become illegal. Some respondents also argued that such opportunities for tax avoidance have come about as a lack of simplicity in the legislation of the UK tax system.  The poll results may not be representative of a full cross section of society.

At Eaves & Co we believe that bespoke tax planning that fits with the business’ or individual’s commercial requirements is much more appropriate than using one-size fits all tax avoidance arrangements.