Perhaps not surprisingly, I am not the only member of the tax profession who has been having his say about tax avoidance. And it is perhaps equally unsurprising that the comments cover the whole spectrum of opinions on the matter. So what have people had to say, and what are my views on their comments?
Warren Hyams, Director WLH Tax
“Under European law, all citizens have a right to mitigate their tax liability. What concerns us is the muddying of the waters between avoidance and legitimate tax planning – which is legal and actually a democratic right.”
I would say that the water in question was extremely muddy before this process started. On a continuum between avoidance and legitimate tax planning, I would put Jimmy Carr firmly at the avoidance end, Sir Chris Hoy equally firmly at the legitimate tax planning end and Gary Barlow etc somewhere in the muddy middle. If Mr Hyams thinks there was ever a clear distinction in this respect I beg to differ.
Chas Roy-Chowdhury, President of the Association of Chartered Certified Accountants
“HM Revenue & Customs has a duty not to discuss the tax affairs of individuals in public. It is concerning that this (David Cameron’s comments about Jimmy Carr) has happened – and not just in this case.”
I reckon that Jimmy Carr’s tax affairs were a cat that was pretty thoroughly out of the bag before David Cameron chipped in with his comments. I don’t think I subscribe to Ed Milliband’s theory that morality has nothing to do with politicians, although I was surprised that David Cameron did not make reference to his Government’s proposed General Anti-Abuse Rule as a potential solution to abusive avoidance of this nature.
An ‘influential accountant, who did not want to be named’
“The Prime Minister made a mistake and I don’t think he will do this again. There is a genuine danger that if ministers name and shame wealthy people in this way these wealth creators will leave this country or not bother coming here.”
Having always made a point of giving my name, on the basis that I am not ashamed of my opinions, I have no respect for people who fail to do so, so this person starts off on a loser as far as I am concerned. As I said above, I think the naming and shaming was well underway before the Prime Minister got involved, so it is a bit rich to blame him for it. And to be quite frank, if wealthy taxpayers think sufficiently little of this country that they will leave because we block their abusive tax avoidance strategies, one feels that they might not be a particularly major loss.
An ‘adviser at one of Britain’s largest accountancy practices’
“Many accountants have been sued by their clients for not getting them into such schemes. Some advisers are very worried about being hit with a professional negligence claim for blocking a client’s entry into a scheme. I know of two such cases at the moment, one for around £500,000. We’re damned if we do, and damned if we don’t.”
I refer you to my earlier comments on anonymity. Personally I have found that a detailed insight into what they are letting themselves in for by way of HMRC scrutiny, uncertainty and risks of scheme failure dissuades the vast majority of clients from such schemes, but I accept that if they really want to go for one it is not advisable legally to stand in their way. Of course if it worries an accountant so much he is entirely at liberty to do the honourable thing in the circumstances, and resign his appointment. But then a succession of Government Ministers has recently shown us that resignation is now seriously out of fashion.
But I think my favourite comment from an accountant is from Jimmy Carr’s father, who tried to dissuade his son from going for tax avoidance. There is at least one man on the side of the angels!