FDs willing to admit unpaid tax despite prosecution risk
Most financial directors would be willing to reveal unpaid taxes to the Inland Revenue even with an increased risk of prosecution, according to this week’s Big Question.
In a survey carried out by Accountancy Age and Reed Accountancy Personnel, 38% of FDs polled said they would definitely declare tax owing. The issue came to light after a recent court case, which prompted four of the Big Six to halt negotiations with the Revenue for fear of client prosecution.
Few FDs were prepared to risk publicly announcing that they would refuse to declare unpaid tax to the Revenue, with just 10% who said they probably were not prepared to declare. Only 3% said they definitely would not declare.
Ken Prenty, FD of manufacturer Philip Johnstone Group, said: ‘I would declare the unpaid tax even if there were no threat of prosecution. I work on the principle that compliance with the law is not optional.’
Chris Denby, of British Arab Bank, said: ‘You could only make things worse by trying to cover up.’
A further 27% said they probably would declare. ‘I am confident (still) that most discussions with the Revenue can be conducted with reason’, said Jim Beard, of biotech company Molecular Products.
Simon Burr, of tea producer Twinings, was one of 22% of FDs questioned who remained neutral on the subject. He said: ‘We have a good relationship with the Revenue and would hope not to have any “unpaid tax”. It also depends on whether “you” means the company or the person. The onus should not fall on an individual acting in good faith.’
Leader, page 12
Legal analysis, page 20.