Tuesday, 6 September 2016

Tax Avoidance



An act, made to escape paying taxes is known as Tax evasion. Such practices can be deliberate concealment of income, manipulation in accounts , disclosure of unreal expenses for deductions, showing personal expenditure as business expenses, overstatement of tax credit or exemptions suppression of profit and capital gains etc.This will result in the disclosure of income which is not the actual income earned by the entity. It is surely one of the biggest problems of our age.
In a  piece of research published by HMRC, people who used tax avoidance schemes were asked about why they took them up. With very few exceptions, avoiders were aware that the tax avoidance scheme introduced to them was “unusual” and “at the edge of tax law” — they followed the letter of the law if not the spirit.
It highlighted the reassuring language used by those marketing the schemes that was “designed to make the tax avoidance schemes appear appealing and acceptable”. For example, tax avoidance schemes were described as: being smart with your taxes; a technical exploitation of the law; a form of tax relief; well within the [tax] guidelines; and an opportunity to exploit tax efficiencies.
Anonymous shell corporations and secret bank accounts are vital resources for those engaged in tax evasion and money laundering. But this web of secrecy has started to crumble in recent years due in part to revelations from whistle-blowers embedded in this complex web of tax havens and fake corporations. The Panama Papers, revealed that a single law firm, Mossack Fonseca, facilitated the creation of more than 200,000 offshore entities.The Tories and the right-wing press love to point the finger at those at the bottom of society like people on benefits, the disabled and immigrants. But the truth is tax avoidance by large corporations and the super rich is a far bigger drain on society, with some estimates saying that it costs the UK over £120 billion a year.
Companies that make use of our infrastructure and services while avoiding tax are freeloaders and parasites! Simple as!

2 comments:

  1. Thank you for sharing the insight! Your article is very helpful and informative. I would like to read more updates from you.

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