Is tax avoidance OK?

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 ust been reading the latest Government release on tax planning, avoidance and evasion.  These are important terms and are often misunderstood.

Tax avoidance has been a bedrock of much tax planning. In a landmark case in 1936 involving the Duke of Westminster, the Court said that every person had the right to arrange their affairs within the law to minimise their tax liabilities. This has always been the profession"s understanding of what tax avoidance was.

Interestingly, in the latest Government document says tax avoidance involves bending the rules of the tax system to gain a tax advantage that Parliament never intended. Well, if Parliament can"t draft decent legislation in the first place, then it should be up to us tax payers to decide what it really meant. All we can do is apply the rules that Parliament laid down.

The Government document also defines tax planning as using tax reliefs for the purpose for which they were intended. However if you use the reliefs too much, HMRC think that they should stop you!

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