Shunned by polite society

It is a question that has been doing the rounds since Enron and other scandals were revealed – but should it be a question we ask in relation to tax?

The last 12 months have seen a significant change in tactics from the government with respect to tax cheats. Getting companies to pay their fair share of corporation tax is now a moral battle.

Companies that cheat the tax system are no longer maximising shareholder profit. They are increasing NHS waiting lists. They are denying the old and infirm adequate heating during the winter months.

Quite rightly, chancellor Gordon Brown has tackled the tax-avoidance industry head on. And while he is to blame for many of the problems when he created a tax system so complex that loopholes could be found, that does not mean he should stand by and watch it flourish.

But he needs to be careful. Speaking to Paul Clark, head of the special investigations section at the Inland Revenue, provided an insight. He said there were individuals on the SIS’s radar screen. They are repeat offenders. They spend half their time devising intricate, ingenious tax avoidance schemes that are, for the most part, abusive and underhand.

They spend the other half of their time selling their products to clients.

Brown seems to be taking a scattergun approach. But, with avoidance disclosure rules, and a very public battle against tax avoidance, he appears to be tarring the entire profession with the same brush.

There is no better illustration of the point than the scheme most commentators blame for Brown finally losing his patience. It was an extremely aggressive scheme that allowed City employees to take advantage of gilt strips. Brown was so enraged with its effects that he chose to act.

So now everyone is in the same boat, regardless of their records. Accountants face a huge hike in bureaucracy for what, in the most part, will be legitimately managing their clients tax affairs.

Worse still, accountants will be shunned from society and ignored at dinner parties, because it’s their fault taxes have to rise.

  • David Rae edits the tax page.

Related reading