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The use of accountancy firms to legally reduce your tax bill has been questioned by Nick Clegg, the Deputy Prime Minister. His opinion suggests that it is “ethically wrong” for people who are wealthy to take advantage of legal loopholes in the tax system to reduce their overall tax liability.

During the Liberal Democrat conference which took place recently in Liverpool, he made claims that legal avoidance of taxes was costing the country £42 billion each year. Plans were announced to collect £7 billion per year lost due to the evasion of taxes.

Mr Clegg said:

“I think that as a matter of principle it is better for people who do very, very well in this country, who earn their money…to pay their way.”

When Mr Clegg was pressed on this issue, he did concede that people were “perfectly entitled” to use the services of an accountant, but that taxpayers would be angry if the rate at which the better off in society avoided paying tax stayed as it is.

This raises the question of whether Nick Clegg realises that tax avoidance and tax evasion are totally different, with one being illegal and the other being perfectly legal. In the current economic climate it makes sense for everyone, not just the wealthier amongst us to only pay the taxes that are due.

Reputable low cost accountants can help you to reduce business taxes as well as maximise income, all legitimately. Tax evasion is illegal and a legitimate accountancy firm would not encourage this practice as they would also face prosecution.

About The Author

Gary Fields

Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.

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