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Tax evasion and tax avoidance – a blurring of the lines in HMRC's eyes.

Paystream News

David McManus

Friday 24th Nov, 2017

A former Chancellor of the Exchequer of the 1970s, Denis Healey was quoted as explaining that 'The difference between tax avoidance and tax evasion is the thickness of a prison wall'.

Using offshore investment and financial management facilities in tax havens in order to avoid paying UK taxes was in the news again earlier in November.

HMRC will undoubtedly be delighted at the spotlight being shone upon these arrangements, which generally bring public opprobrium, as they continue to attack what they see as an attempt to circumvent the 'spirit of the law' as intended by Parliament, and of course, as interpreted by them.

Armed with anti-abuse rules, both general and targeted, HMRC have considerable firepower to demolish many tax avoidance schemes with consequent bad publicity and high costs for the users.

Contractors may have been tempted by the lure of virtually 95% take home pay through offshore loan schemes but they should be resisted - they do not work.

There is an old adage which applies here - 'if it seems too good to be true then it probably is'!