Al Capone was once a well known crime figure and a leader among the American underworld. Back in the 1930’s he had a personal fortune of over $100 million dollars. After all his crimes he committed to reach the top he was eventually brought to justice by none other than Elliot Ness. The only way to capture Al Capone was through his books and finally justice prevailed as he was caught evading tax.
When paying your taxes there is a very fine line between that of avoidance and evasion. Put rightly by our former Chancellor of Exchequer Denis Healey, who once said:
“The difference between tax avoidance and tax evasion is the thickness of a prison wall”.
Avoiding tax involves using legal methods, these methods can be as simple as planning a clients finances so that they are eligible to use the deductions and exemptions available to them to their full advantage. Also other forms can include investing money every year into cash ISA accounts and bonds to reduce the amount of tax to pay.
However, avoiding tax must be distinguished from evading tax, this in turn is a criminal sanction. Tax evasion involves paying less tax than the law requires you to pay. This can be disguised in different ways such as declaring less income and profit. This is commonly known as being part of the informal economy and now new measures have been placed on this unreported income.
Complicated as it may sound, tax law is a very niche area of the law but also very necessary as there are only two certainties in life; death and taxes. If we can take any advice from our former Chancellor of Exchequer it is that we need to stay on the other side of the prison wall.
Vinesh Patel, Paralegal
Aston Bond’s Solicitors in Slough specialise in tax law and advice individuals and businesses across England and Wales on their taxes. If you would like to speak to one of our specialist tax law solicitors please call 01753 486 777 or email firstname.lastname@example.org. Alternatively, you can visit our offices at 135 High Street, Slough, Berkshire, SL1 1DN.