0800 140 4644
The 31 January deadline is fast approaching for submitting self-assessment tax returns and paying income tax and National Insurance owed to HMRC.
For the vast majority of us, and certainly, for all of my accounting and tax clients, the annual completion of tax returns is an affirmation of integrity and honesty. Few people enjoy paying their taxes but we generally recognise it’s a price worth paying for living in a civilised society.
And yet HMRC calculates that deliberate fraud costs the taxpayer around £11.5 billion in evaded tax every year.
At Black and White Accounting, our duty is to ensure our clients only pay the tax that’s legally due and, if they plan to make any decision that could have tax implications, we ensure they have the full facts before they take it.
However, our duty does not stretch to doing anything we consider dishonest, unethical or illegal.
Professional accounting ethics
We are members of the Association of Chartered Certified Accountants (ACCA) which has a code of ethics and conduct that is binding on all members. Its five fundamental principles are:
- Integrity
- Objectivity
- Professional competence and due care
- Confidentiality – except where there is a legal duty to disclose information
- Complying with relevant laws.
So, while we always respect our client confidentiality, all accountants are required to report illegal activity to the authorities. It is a corporate criminal offence to fail to prevent tax evasion, therefore we are obliged to report any suspicion.
Additionally, the government has introduced legislation requiring professionals to declare historic tax evasion. Anyone who has not owned up to past evasion by 30 September 2018 could face new penalties.
What is tax evasion?
While tax avoidance is not necessarily illegal, its ethics are often debated whenever a celebrity is caught in a scheme to reduce their tax liability in the UK. But tax evasion is a criminal act, covered by the Theft Act 1968.
Tax evasion encompasses VAT, excise duty and NI, as well as income tax, and can lead to up to seven years in prison, a large fine or both.
According to the National Criminal Intelligence Service, 60% of tax evasion requires accountant or solicitor participation, so HMRC is encouraging professionals to act as whistle blowers. The Taxes Management Act, 1970 imposes a duty on anyone knowingly concerned in the fraudulent evasion of income tax by another person and covers solicitors and accountants and the employees of businesses.
Tax evasion can include failure to declare all income, non-payment and deliberate under-paying of the tax due. A HMRC investigation may find that a genuine mistake has been made but the most serious level of tax fraud involves deliberately providing false documentation to HMRC to cover up a non-payment.
Tax evasion hotline
A tax evasion hotline has also been set up to make it easier for anyone to report a suspicion of tax evasion to HMRC.
Make sure you’re paying the right tax
Accountancy in the UK works to the highest professional and ethical standards and, if you’re open and honest about all income and expenses, you can enjoy the peace of mind of knowing you are paying the right amount of tax.
Whether you require guidance on tax accuracy or seek to avoid HMRC scrutiny, Black and White Accounting, with its team of professional self-assessment accountants, stands ready to assist you.
If you would like more information to ensure your tax bill is correct and to avoid a visit by HMRC investigators, then please contact Black and White Accounting or ring 0800 140 4644.
