HMRC have pronounced some of their thoughts on what to avoid in tax planning. Things to avoid include:
- a scheme or suggestion that seems too good to be true
- pay in the form of a loan
- tax savings out of proportion with the cost or amounts of money involved
- situations money just goes around in circle
- anything HMRC have stamped with s “scheme reference number (SRN)
We would agree these points add an obvious further situation to avoid. Don’t indulge in schemes involving relief clearly intended for a specific industry if you are not in that industry. For example, don’t try to claim a huge tax saving from Film Tax Relief if you are not in the film industry.
Our approach to tax planning is clear: use tax relief measures as intended; and pay the correct minimum tax using the tax rules as intended. If there is a clear legitimate choice of actions and one results in less tax then (all other things being equal) of course take the action leading to less tax. You can always donate the saving to a charity, but no-one should pay too much tax on purpose. But don’t take contrived actions just to avoid tax, you’ll be asking for trouble one way or another.
As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.