"primarily due to a tougher stance towards tax planning activities adopted by the Government and HMRC."
Friday, July 8, 2011
Tax Failure of the week: Begbies sells tax division due to falling demand
The Evening Standard reports that quoted top 20 firm Begbies Traynor is selling its tax division, under the headline: "No money in loopholes". The Standard goes on to report that Begbies suffered from a lower demand than anticipated for its tax services:
Regular readers will know that I am no fan of the sort of tax schemes being attacked by HMRC as well as by successive Governments. Whist there are some boutique tax practices that focus on promoting such schemes I am surprised to read that Begbies are effectively admitting that this was a key part of their business.
There has always been and will continue to be plenty of work for good tax advisers. They do not need to advocate fancy schemes either when solving tax problems or when helping with genuine tax planning.
I would guess that the issue here is that Begbies tax division was tasked with achieving unrealistic fee income targets - perhaps by reference to the sort of fees that are only achieved when putting wealthy clients into fancy schemes. I would agree that there are fewer such schemes and that demand has fallen sharply as people become more aware of the risks and downsides. I also anticipate that HMRC will win further 'avoidance' cases in the courts over the next couple of years. Remember that these cases typically relate to tax 'avoided' between 5 and 10 years previously.
Anyway. If you want to get in touch with vetted independent expert tax advisers, you know where to go.