Wednesday, August 19, 2009

Five more facts all accountants need to understand about tax avoidance schemes

This is a follow up to a recent post: Five facts all accountants need to understand about tax avoidance schemes.

That first list essentially provided support for those accountants who have already chosen NOT to advice on such schemes. Below I have listed five more facts which should also be borne in mind by those accountants who are nonetheless tempted to look further into the subject:
  1. Encouraging a client to undertake a structured tax avoidance scheme is much like encouraging them to make a specific investment;
  2. It takes a fair amount of time to get to grips with all of the relevant details of a structured tax avoidance scheme;
  3. HMRC may announce a change in the law at any moment - leading to rushed (and perhaps botched) attempts to revise the scheme by the promoters;
  4. Having committed all that time to learning about the scheme there may be a temptation to persuade someone to 'invest' even if they might not otherwise choose to do so;
  5. If, some years later, the scheme is ultimately held not to work the client may sue the accountant for failing to adequately highlight the risks.
Together these ten facts should provide support for those accountants who choose not to advise clients on structured avoidance schemes. As before I'd be very happy to explain or expand on these and also to receive comments from people with a different view.

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