It has been reported that several companies’ attempts at obtaining emergency funds have been hampered by concerns regarding the owners’ activities in alleged tax avoidance. The optics of trying to secure taxpayer money whilst straining every sinew to avoid UK tax including becoming non-UK resident, are extremely difficult.
It is easy in tax planning to win a battle but lose the war. The rules of “the game “will change. If companies accept taxpayer funds, and, given the widespread nature of furloughing as well as other support—most have. In return, companies can expect greater public scrutiny of their tax affairs. Moreover, the boundaries of acceptable tax planning will shift—not necessarily to the taxpayer’s advantage!
After the financial crash in 2008/09, companies found themselves the target of hostile scrutiny in their tax conduct. I expect it to be the same in the aftermath of the Pandemic.
Primondell is running a series of seminars in the Autumn on Professional Conduct in Relation to Taxation (PCRT) and protecting your client’s reputation.