THE PURPOSE OF THE LAW is to set out the things we, as a population, can and cannot do because those acts, generally, damage society and/or individuals within it. It is quite a simple idea, and the best bit is that if you notice something is happening that shouldn’t, the law can be changed.
With that state of affairs, it seems somewhat inappropriate to blur the lines by bringing in morality and treat entirely legal behaviour – in this case, tax avoidance – as if it were a crime.
Bringing moral, subjective – and often ambiguous – terms into the realm of law is a dangerous road to start down. Not only because what is reasonable to me may not be reasonable to anyone else, but because if the government is particularly unhappy it can legislate against patterns of behaviour.
Professional bodies ensure standards of practice, and must not mix morality with legality. Leave that to philosophers, religious figures and others of that ilk.
The problem facing accountants, then, is how to ‘avoid’ passing moral judgment upon their clients and outlining all options available, while reconciling that with their respective code of ethics.
One might imagine the latest ICAEW guidance on avoidance would have been welcome. However, while it has roundly condemned contrived tax avoidance as “unethical” and outlined hallmarks under which an advisor could commit a disciplinary offence by bringing the profession into disrepute, it has failed to draw a clear, definitive line.
ICAS’ head of tax, Derek Allen, articulated this particularly well this week when he said: “The law has to fix this [the uncertainty over tax avoidance] and provide a clear basis upon which taxpayers can, with clarity, make informed decisions on their approach to their tax affairs.” Well said.
Calum Fuller is Accountancy Age’s tax correspondent
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