The announcement this evening that the UK Government and the Swiss Government have agreed a deal that tax for UK residents will be levied against their secret Swiss Bank accounts is a timely reminder about the differences between tax avoidance and tax evasion.
Avoidance is perfectly legal. It is up to each citizen to arrange her affairs so that they pay the least amount of tax.
Use of annual allowances and exemptions such as personal tax allowances, ISA and pension contributions and Capital Gains Tax annual allowances are all perfectly acceptable.
There are rules though and these need to be followed in terms of both the letter and spirit of the law.
Evasion on the other hand is illegal. Full stop. Don’t do it!!
Report what you are required to HM Revenue & Customs. Income, interest gains and any other monies that need to be reported to the HMRC should be.
Pay your taxes on time to avoid penalties and interest charges. Don’t be lulled into any kind of scheme that a professional adviser won’t sign off because chances are the HMRC won’t be approving them.
If you are resident in the UK remember the HMRC are interested in your world wide assets and income make sure you report such things to them.
Photo credit: Flickr/ianlord
