I have vague memories of life in 1988. But one that does stick out is dragging my dad down to the local newsagents to buy a souvenir magazine celebrating the Seoul Olympics. I don’t remember many of the details of that great sporting extravaganza, but one that is still pretty clear in my mind is the memory of the mens final of the 100 metres sprint. As we all know, the 100 metres final is the centre-piece of any Olympic games, but as far as I was concerned, this event was extra special; it was taking place on 10th birthday.
Less than 10 seconds after the gun went “bang”, the world thought it had found a new sporting hero, a worthy heir to the throne of the great Carl Lewis. Of course, unbeknown to all of us at the time, the reality of what had just happened in those 9.79 seconds was not quite as it first appeared; rules had been broken, even if that hadn’t been obvious to the casual observer right away.
Fast-forward 25 years and I’m a 34 year old working in the accountancy and payroll industry. Memories of 1988 are faded, but unfortunately memories of rule breaking aren’t; it is, regretfully, something that I’m confronted with on a daily basis. I’m referring, in case you’ve not already guessed, to the array of tax avoidance schemes that blight the industry in which I work. When scheme providers are issuing warnings in their literature instructing customers not to disclose information to third parties on how the scheme works – on the basis that it might result in a tax authority investigation and the schemes subsequent closure – you’re able to get some idea of just how bad the rule breaking has become; an idea of just how far outside the realm of “fair play” these schemes reside.
Now, as far as “cheating” goes, most of these schemes do it in relatively subtle ways, all things considered. Like I’ve implied with my sprinting analogy, they’re a bit like a doped-up athlete, someone who doesn’t look like a cheat at first glance; its only once you scratch the surface that you realise that they’re not as good as you thought they were. These schemes generally aren’t doing the equivalent of tieing their opponents shoe-laces together or nudging their starting blocks forward a few feet. That kind of cheating would just be silly; it’s too obvious, even to the casual observer. Do that and you’d get thrown out of the arena right away…and that means you’d never get the opportunity to create the illusion that you’re winning simply because you’re better than the competition!
As it happens, the wheels of time turn a little slower in the world of taxation than they do in the world of sprinting, but nevertheless they do turn. The next couple of years are starting to look a lot like they’re going to be the equivalent of those couple of days following Johnson’s ‘victory’. Investigations are under way, and there’s an increasing feeling – even amongst the general public – that ‘something isn’t quite right’ with what’s going on when it comes to the issues of who pays tax, how much they pay, and where they pay it…and that, crucially, has turned the issue of tax avoidance into a political vote-winner.
If you’re doing nothing wrong then you’ve nothing to worry about. That, if anything, has surely got to be the moral of the story for anyone providing tax advice and solutions in the current climate. If you’re advising your potential customers not to sign up to your scheme if they’re likely to lose sleep through worrying about possible tax investigations into their finances, then you’re probably selling something you shouldn’t be, and are therefore living on borrowed time.
For those of us who’ve been playing by the rules all along, the next couple of years should be pretty exciting; we’ll continue to look after our existing customers…and we’ll probably pick up a few more along the way as we help tidy up the mess that tax avoidance schemes leave behind.