Partner Article

The law no longer seems to matter...

Richard Jordan, Partner on the tax team at Thomas Eggar, comments on the Autumn Statement.

Having heard the Autumn statement I am not interested in the detail, I am only interested in the sentiment. Why? Because the law no longer seems to matter.

After criticising HMRC, Margaret Hodge is now turning her ire to those that derive profit from giving tax advice. It is suggested that representatives from the big four accountants should be summoned to explain their actions.

We are in the midst of a clever and carefully planned campaign to change the culture of tax planning by vilifying high profile corporate and personal tax payers, the public servants (HMRC) and now their advisors. Banker bashing is so yesterday, now professional tax advisors are the lowest of the low.

The blurred edges of what is and is not acceptable behaviour when it comes to minimising tax liabilities has always generated emotion and controversy. Throughout history there has always been one saving grace, which is that the law is extremely clear in this regard. But the rule of law seems to have little relevance in this campaign which seeks to encourage mob rule.

A change to the culture of tax planning is probably the right thing. Societies’ values and behaviours change and it is important for businesses and the people to adapt. What concerns me as a member of society is the general governance of this country, given that MPs seem to have such little interest in what the law is.

A number of professional service firms (including Thomas Eggar LLP) have an unofficial policy on refusing to assist with or advise on pre-ordained tax schemes. If clients insist on entering such schemes, they do so at their own peril. Government engagement and discussion with sector representatives of the professional advisors (e.g. STEP/CIOT) would be far more fruitful than simply beating them up in the press. Strategically, however, people are perhaps more likely to talk once they have received a few public blows to the head, as per Starbucks.

This was posted in Bdaily's Members' News section by Thomas Eggar .