The Williamsburg Memorandum of Understanding
Originally sent: July 19, 2004It doesn't have quite the same ring as The Gettysburg Address, but it might be as far reaching in its implications. At least over this side of the pond, and for those of us involved in any way in tax planning.
The understanding was signed in Williamsburg, Virginia on April 23, 2004, by representatives of the tax offices in Australia, Canada, the United Kingdom and the United States, establishing a joint task force to coordinate international efforts to counter tax avoidance schemes.
According to Inland Revenue, the initial work of the task force will be to look at the use of financial products in tax avoidance schemes, and to identify those who are developing and marketing such products and schemes.
Notice the second half of that sentence. Do you want to be one of those identified? There is a tax accountant right now starting a four year stretch who probably fervently wishes he hadn't been identified, and possibly even wonders how he got there in the first place.
In the same Inland Revenue announcement, Economic Secretary John Healey has linked tax avoidance to terrorism, organised crime, money laundering and fraud. Not tax evasion - tax avoidance!
The moral, as I have stressed in a number of recent bulletins, is that if you are going to use tax avoidance rather than tax mitigation, tread very carefully!
Coupled with the establishment of the Inland Revenue Avoidance Intelligence Unit, and the requirement in this year's Finance Bill to register tax avoidance schemes with Inland Revenue or Customs & Excise, the Williamsburg Memorandum marks a watershed in the UK tax planning industry. Are you properly positioned to move your business forward in this new era?
Adviser Breakthrough Training Solutions Ltd. takes no responsibility for loss occasioned by any person acting or refraining from action, or in consequence of any other person acting or refraining from action, as a result of the material in this article.
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