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TW Ed offers some tips for people who don’t want to be accused of tax avoidance.

Tax avoidance, it seems, is perceived to be morally bankrupt, egregious, only just short of scaring the horses. With that in mind, here are some pointers to politicians and anyone else who wants to join the mad scramble away from being labelled a tax avoider:

1. Don’t pay into a pension, because the pension firm then takes tax from HMRC and puts it into your personal pension pot. Some people don’t pay into a personal pension, so it’s unfair that you do and pay less tax as a result. Think of all the effort the Conservatives just put into making pensions more accessible. Crazy.
2. Don’t give any money to charity, because HMRC then has to give some or your tax money to that charity as well – and you might inadvertently avoid higher rates of tax if you do. Shocking.
3. Pay the most you can, for everything, anywhere. Then you cannot possibly be accused of having avoided VAT.
4. Campaign vigorously for an increase in petrol prices, so that you can make sure you are paying an acceptable amount of fuel duty. Drive everywhere while campaigning, so that you use as much fuel as possible, fill up more often, and pay more fuel duty. Hang global warming, tax avoidance is the real menace, if recent political headlines are anything to go by. Remember when people used to queue up at petrol stations up and down the land to beat midnight fuel duty increases in the Budget? Dirty filthy tax avoiders, every one. 
5. Don’t take childcare vouchers: they can save you hundreds of pounds in tax and National Insurance – which, as we now know, is just plain wrong, particularly since only a few million people are potentially eligible, and only a few hundred thousand actually claim.
6. Do not claim job-related expenses, as they can reduce your tax bill. If your employer reimburses you for business travel and similar expenses, or pays for professional subscriptions, do make sure that these payments are submitted to HMRC on a Form P11D and do NOT make a corresponding claim under any part of ITEPA 2003 Part 5 Chapter 1. But note that HMRC will automatically assume that such expenses are tax-deductible, so you may have to write to them to tell them to remove the deduction. Probably more than once.
7. Do not check your PAYE tax code, ever. HM Revenue & Customs always get it right. If you correct your tax code to pay less tax, then you could be accused of tax avoidance. It’s better just not to take the risk. If you are concerned that you may be underpaying tax, see 8.
8. If HMRC writes to you to tell you that you have underpaid tax over the last several years because (a) their computer system couldn’t accommodate a car benefit so large (see 9), or (b) it ignored your repeated requests to remove coding allowances (see 6 above), or (c) it for some reason gave multiple Personal Allowances across all your tax codes, etc., etc., do NOT question the letter or check the calculations but simply pay the additional tax that is due. UNDER NO CIRCUMSTANCES SHOULD YOU MENTION EXTRA-STATUTORY CONCESSION A19, which is where HMRC is supposed to give up tax which they have consistently messed up collecting. And cross your fingers that they have now burned all old copies of their PAYE manuals which told them they should grant ESC A19 without having to be asked first. Least said, soonest mended.
9. If you can choose your next company car, make sure it’s a heavy-polluting model. The emission levels will bring tears to everyone’s eyes as they weep for joy at the tax you’ll contribute on the car benefit in kind. True believers deliberately pay back just £1 less than their private fuel cost, so that they can then basically double their tax bill with a fuel benefit bonus.  And it means even your employer can share in the tax avoidance avoidance, because they can get to pay a lot more National Insurance, and claim even less in Capital Allowances – if they’re bothering to claim any at all. They’ll be delighted.
10. If the worst happens as an employee, and you are made redundant, (see 9 above), do NOT claim that the first £30,000 should be free of tax, and National Insurance on the lot, because that would be avoiding tax. (And National Insurance).
11. If you’re a registered charity, think about giving up the charitable tax status which exempts most of the income you receive. After all, everyone has to pay their fair share. Why should charities be any different?
12. Don’t invest in Enterprise Zones, Film Partnerships, Enterprise Investment Scheme companies or any other government-sponsored incentives because, even though they were legislated by the government, one government’s tax incentive is another government’s tax avoidance. Or even the same government’s.  Don’t put your money in that ISA, Mrs. Worthingon. Or decontaminate any land. Renovating business premises is basically sheep rustling by another name.
13. If you are trading internationally, make sure to relocate your base of operations to whichever country charges the highest rate of business taxes, and ensure that all of your profits are taxed there, even if they were actually earned elsewhere. And, just to make sure that no other country complains that you are avoiding paying tax in their territory, do NOT claim Double Taxation Relief on those profits: now you can pay tax pretty much everywhere, simultaneously. Bravo. All that effort the Chancellor put into the UK having the most competitive tax system in the G20 – for internationally mobile companies, at least.  “Do a Starbucks” and pay tax you don’t actually owe - rather than a "Cadbury Schweppes" where the UK government says (said) you owe tax and the ECJ says you don't. 
14. Don’t do any Research and Development, create any Intellectual Property or indeed any other Corporate Intangible: it’s a slippery slope to avoiding tax by investing in improving the UK’s “knowledge economy”. And we wouldn’t want that now, would we? I mean, I thought we did, but now I know better.
15. If you’re thinking of spending serious capital on plant, machinery or equipment, then please, for everyone’s sake, make sure you hold off spending until after 31 December 2015. Then you can be sure of swerving the pesky enhanced Annual Investment Allowance that this government craftily snuck into the 2014 Budget to catch out the recidivist tax avoider.
16. If you run a business, don’t reclaim any Input VAT. At all. In fact, just don’t claim any expenses full stop. You’ll sleep easier. Considerably the poorer, probably. But at least you won’t have avoided paying any tax.
17. If you make losses, see 16 above. If you still have losses, make sure to claim them in the least efficient way possible. Waste them against tax-free income or gains. Better yet, just don’t claim them.
18. Don’t get married: marriage opens the door to some really big reliefs and exemptions which you will struggle to avoid. (I am not just talking about the transferable Personal Allowance) If you’re already married and find you have to transfer assets, then get divorced first to make sure capital gains tax is chargeable.
19. If you must transfer income-producing assets to your spouse and you cannot avoid not paying CGT, you could always try to invoke the "Settlements Legislation" against yourself, by arguing that it is essentially a right only to income, or some such. Clearly, Chancellor Lamont was out of touch with public sentiment, when he said that Independent Taxation was "bound to mean that some couples will transfer assets between themselves so that their total tax will reduce; this is an inevitable and acceptable consequence of taxing husbands and wives separately". How on Earth did he get elected?
20. Pay Inheritance Tax on every lifetime gift you make – they’re only potentially exempt, after all. If you are concerned that HMRC may refuse to charge IHT on immediate lifetime gifts just because you happen to be alive, then on a normal interpretation of the legislation that would be understandable. I am, however, aware of certain schemes which, for a relatively modest fee, are guaranteed to resolve the issue permanently in your favour, although I should warn you that the election is irrevocable – at least by current medical standards. I am nevertheless absolutely confident that these schemes will prove successful and have had no complaints at all from anyone who has procured such a scheme in the past. Please see also notes 21 and 22.
21. Don’t write your life insurance policies into Trust but just leave them payable directly to your estate. That way, you can maximise your exposure to Inheritance Tax on death. You’d be mad not to.
22. Leave things in your Will to everyone except your spouse. Transfers between spouses on death are automatically exempt and the only way to avoid the exemption is to leave your estate to someone else entirely.  Your spouse will no doubt be delighted that you have so much confidence in his or her independence. If in doubt, get divorced now. It’ll be easier on you both in the long run.
23. If you’re about to receive a legacy from someone’s will, do the decent thing and draw up a deed of variation to ensure that it goes to someone else who’ll pay more tax, sooner.  Don’t worry about the fact that the legislation specifically provides for such deeds to be used to pay less tax: it was clearly a drafting error and will soon be corrected. Alternatively, think about doing it within 3 months or after two years, in which case you can beat the legislation and continue to pay as much tax as you can.
24. If you sell your only or main home, then try to treat it as a chargeable gain for Capital Gains Tax purposes. This is not as easy as it might seem: unfortunately, the relief is automatic. But there is a way to avoid the relief, which is to say you bought the property with the intention of making a gain. It’s not guaranteed to work without challenge, because HMRC normally interprets the legislation quite narrowly. But it is open to you to interpret the legislation differently, and thereby pay the tax you really want to.
25. Next time you come back from holidays, swerve the "Nothing to Declare" queue and instead head straight for the newly-christened "I am not a Tax Avoider" queue, which is likely to be busy at any time of the day or night. UNDER NO CIRCUMSTANCES should the words "personal" and "consumption" pass your lips. HMRC/HM Treasury is resolute in its denial that the Hoverspeed case ever happened anyway, so why even mention it? Do those hard-pressed Customs officials a favour and pay duties on everything, regardless of whether it may or may not undermine your rights as an EU citizen, as fought for at considerable expense by a fellow citizen.
26. When you decide to cash in an investment, make sure to do so in a way which results in the maximum amount of tax payable. (This used to be called "ticking the wrong box"; from now on it will be known as ticking the "I am NOT a tax avoider box"). Never mind that in the Lobler case, the judge said the taxpayer's misunderstanding, “...takes place at a time when there is great media and political comment about a fair tax system. That interest focuses on the avoidance of tax by those who have substantial income, but to our minds it is more repugnant to common fairness to extract tax in the taxpayer’s circumstances than to permit other taxpayers to avoid tax on undoubted income.” But hey, what does a judge know about abuse and the tax system?
27. Finally, do NOT under any circumstances become a Member of Parliament. MPs and ministers are afforded a number of special tax reliefs which are superior to those of ordinary employees and which, to a man, they will use pretty much every day. Tax avoidance: are they all in this together? Yes they are. But they are not the only ones.

I did NOT wake up this morning expecting to find myself on the same side of an argument as a Tory peer. It’s the stuff of nightmares. More seriously, I don't think that there are many people who can really claim that they have never avoided tax. Nor should it be considered wrong: avoiding tax is not abusive of legislation.

On the basis that the world has this last week gone "Fifty Shades [of] Bonkers", I invite fellow contributors to help me get up to 50 points, so I can then call the article "Fifty Shades of Tax Avoidance". Trust me to flag half-way through.

I imagine there are many people who think I don't understand what "tax avoidance" is and that I have used specious arguments to undermine a valid case. To an extent I would concur: tongue was firmly in cheek. But if I were, say, to replace those Budget Day petrolhead sinners in (4) above with shareholders who raced to pay themselves bumper dividends before the so-called 50% tax rate took effect..? What makes the former 'acceptable' and the latter 'odious'? The examples were chosen with a modicum of care.

For those who would argue that tax avoidance is wrong (and may be defined) because it is something that only the rich can 'do', I suggest they tarry a while longer, care of TaxationWeb. TW has been giving ordinary taxpayers access to good tax advice for well over a decade, thanks in no small part to some truly excellent contributors. I think it a fair reflection to say that TW has no time for those who would abuse the tax system, but loads of time for people  who are ignorant of, who don't understand, or find themselves inadvertently on the wrong side of, our wonderful tax regime and its agents. That is why I, and I think many of my compatriots, switch on our laptops in the evening after a hard day's work.

Long may that remain the case: vivat TW

Regards all,

TW Ed.