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Don’t blame us for bad laws, accountants say

While tax avoidance is a serious problem in the UK right now, the head of one accountancy firm said that the government has no one to blame but themselves!

I know it sounds like Deloitte’s chief executive, David Sproul, is just trying to pass the buck when it comes to who’s responsible for the whole tax avoidance thing right now, but he has a point in that he claims that the legal vicissitudes of the UK’s current tax system are to blame more than anything else.  Mr Sproul said in a recent interview that it’s obvious that there are some laws being taken advantage of by more than just a few tax practices, but the real question we should be asking ourselves is how many of these practices are tacitly approved of and which are no longer acceptable in the eyes of society.

The legal tax avoidance landscape is changing, Mr Sproul said, giving the example of how it used to be par for the course to use a trust arrangement to pay a bank employee their bonus. While this was all right in years past, it’s fallen out of favour – and accountants such as Deloitte no longer counsel their clients to engage in such activities any more, the chief executive remarked.

A lot of the tax avoidance furore ripping through today’s headlines comes from multinationals using tax practices that are completely legal in order to avoid paying their fair share of tax. The problem is right now that the Government’s austerity programme is quite high profile, which makes these massive sums of cash multinationals are funneling overseas rather conspicuous; Mr Sproul has a point in that suddenly ministers are eyeing the profits of these companies when only a few years ago they didn’t care a fig about the whole thing/

I hate that I’m agreeing with this, but if you look at it that way it’s not really a large multinational’s fault if they use a perfectly legal tax practice to avoid paying their fair share. If the Government didn’t want that kind of behaviour in the first place, the tax law shouldn’t have been drafted in such a way as to permit the behaviour – and now that the Government needs that extra tax revenue they’re kicking themselves for placing the laws there.

Well maybe next time they’ll think twice before shooting themselves – and taxpayers – in the foot!  Knowing the Government, they probably won’t even blink.

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