There has been a lot of talk in the press recently about tax avoidance, following David Cameron denouncing comedian Jimmy Carr as morally questionable, due to his involvement with a scheme known as K2. But is there any real problem with what Mr Carr was doing? Wouldn’t we all like to pay a little less tax, given half the chance?
The issue really is where do you draw the line ? Once the press start looking at aggressive schemes like K2, the line between tax evasion and tax avoidance becomes blurred in the eyes of the general public. That scheme, amongst others, has yet to be tested in court. However, such schemes do seek to legally take advantage of loopholes in legislation, in order to save tax.
It seems harsh to blame Jimmy Carr for a loss of morals in this country. Someone advised him that he could save some money by investing his cash in a certain way, and he agreed to do so. These schemes are fully disclosed to HM Revenue & Customs and are a far cry from the illegal activity of tax evasion.
Only people with considerable amounts of capital are likely to be involved in the most aggressive tax avoidance schemes. However, there are many ways in which the affairs of the average taxpayer can be arranged, in order to reduce their tax liability - without fear of having to make a public apology !
Examples include taking advantage of tax-efficient investments, looking at non-cash remuneration, topping up pensions, or making donations to charities.
We would be happy to advise you on a number of ways to be tax-efficient. Just contact me to arrange an appointment.
