The court of no appeal

What do Lewis Hamilton, Jimmy Carr, Gary Barlow, Amazon and Akshata Murty (Rishi Sunak’s wife) have in common?

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All have been found guilty of tax avoidance in the Court of Public Opinion.

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Many years ago, it was a common enough phrase that tax evasion is illegal, but tax avoidance was alright.? However, in the current climate, it is no longer enough to merely follow the rules.? There is a higher, non-legislative bar to get over, and a moral and ethical requirement to meet when it comes to tax affairs.

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We pass no judgment on any of the names above, we are confident that all of those parties had tax advisors who confirmed that their tax practices were legal and legitimate (and they almost certainly were).? However, all of the names above were also subject to media headlines which caused some level of damage to their brands, having been found guilty of underhanded tax practices by the man on the street, because they can afford expensive tax advisors to help exploit loopholes.

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As tax advisors we know that this is not the case and good tax planning is available to all (because surely it isn’t good tax planning if it costs more than it saves).? However, we also need to be aware that when we advise a client on the tax options and the risk of HMRC challenging through the tax courts, we should also have in mind the risk of the media challenging in the public opinion courts, which is a place where it is far harder to defend your position.