You’ll never stamp out tax avoidance, advisers claim

A year ago Hartnett told Accountancy Age that by 2008
HMRC ‘will have made tax
avoidance not worthwhile’. Since then HMRC has taken a hard line on aggressive
tax avoidance activities that push the limits of the law.

At a recent conference Hartnett said he thought companies had come a long
way, but differences still existed between HMRC and advisers.

Mike Warburton, senior tax partner at Grant Thornton, said any attempt to
shut down tax avoidance was wishful thinking. ‘Tax planning is the second oldest
profession in the world. The battle goes on, but to stamp it out completely is
far-fetched,’ he said.

Francesca Lagerberg,
ICAEW tax faculty chair,
said there would always be tax planning because clients would always want to pay
the right amount of tax and no more.

‘On the fringes there is unacceptable tax planning, and HMRC will take
action, but there will always be planning because people want to have their
affairs in the best position,’ said Lagerberg.

Bill Dodwell, corporate tax partner at Deloitte, said the rising tax burden
meant that tax planning was as important as it had ever been.

‘Companies are doing what they can to reduce their tax liabilities. They are
not going for aggressive planning, but there are still things that can be done,’
he said.

Although advisers were confident that avoidance would never be eradicated,
there was an acknowledgement that HMRC’s crackdown had changed the nature of the

John Whiting, tax partner at PricewaterhouseCoopers, said the disclosure
regime had changed the way business was done and that he expected HMRC to
introduce further anti-avoidance measures. ‘There are no confidentiality
agreements any more and the spotlight has really shone on this area,’ he said.

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