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Paradise Papers

Rob Case, Head of Tax, reflects on the recent revelations concerning Paradise Papers.

Over the last couple of days we’ve seen the release of a number of press articles naming and shaming celebrities, politicians, large multinational companies and even to some extent the Queen in relation to their tax affairs and investment in tax havens.

On the face of it, it would appear that in most cases the activities, investments and tax avoided all appear to be within the confines of the legislative frameworks of the Countries concerned.

That is not to say that what is being reported on is okay, far from it. The reason it is getting so much publicity is because it stands out as being unethical and not morally correct in today’s world of openness and transparency.

To some extent, however, this is like trying to close the stable door when the horse has already bolted.

One thing none of the articles seem to mention is the great deal of effort that the OECD (Organisation for Economic Co-operation and Development) has put in to Base Erosion and Profit Shifting (BEPS) in recent years. Clearly trying to get members to sign up to a consistent treatment to prevent profit shifting to tax havens is and will continue to be a challenge.

What is certain is that for as long as there is taxation there will be those seeking to avoid it. It is a natural consequence. What we are likely to see is a move to indirect taxation, a sales tax based on the location of a customer which companies are less able to influence.

Tax advisors also have a part to play in all of this. Minimising tax within the confines of the legislation is one thing, being ethical and acting within the spirit of the law quite another and there are now penalties for promotors of tax avoidance schemes.  That is why we only offer ethical tax planning at Randall & Payne, seeking to help our clients minimise their tax but also give peace of mind that their affairs are dealt with in the spirit of the law.

Rob Case, Partner, is Head of Tax at Randall & Payne and is happy to discuss any tax related issues or concerns you may have on 01242 776000 or email rob.case@randall-payne.co.uk.

 

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