Tax avoidance grabs the headlines


Article posted: 18th July 2012


The media has been shining the spotlight on tax avoidance.

In June, The Times ran a series of front page exposes of tax avoidance schemes.  The furore eventually saw the Prime Minister naming and shaming Jimmy Carr for ‘morally wrong’ action in using a complex Jersey-based ‘K2’ scheme to shield his earnings from income tax.


The rest of the media quickly joined The Times’ bandwagon, helped by a first tier tax tribunal decision against a film partnership scheme that involved the likes of Sir Alex Fergusson and Sven-Göran Eriksson.  Somewhat inevitably this anti-tax avoidance frenzy missed a few important points:


  • The current Government has already acted against ‘disguised remuneration’, which some experts think put an end to the K2 type of scheme, or at least makes it very much more difficult to operate.


  • The football managers’ film partnership scheme was set up in 2006 and legislation since then has markedly reduced the scope for the film-related tax relief payments to individuals.


  •  The Government has just started a formal consultation on a General Anti-Abuse Rule (GAAR), to be introduced in 2013. This would be used to target ‘aggressive’ tax avoidance arrangements.


  • The media coverage has very much been on the extreme end of tax avoidance; normal planning, such as using ISAs or making use of independent taxation, is not at issue.


The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Services Authority does not regulate tax advice.






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