Zen and the art of tax avoidance

Many moons ago, I studied philosophy at university. I loved moral theory in particular.

So it was with great interest that I read Tax Journal’s article on senior ICAEW members’ views on the recent tax avoidance stories in the national media.

Essentially, the body's chief executive, Michael Izza, put forward a view stating there was no place in the profession for the creation or maintenance of tax avoidance schemes. This was met with a mixture of support and criticism.

Most interesting among the critics (well, to me at least) was Robert Maas, who essentially put the point forward that an adviser’s professional duty is to act on behalf of their client, and this overrides the considerations to the profession.

It got me thinking that, on the face of it, we have two horns of a dilemma for advising a client looking for a tax avoidance scheme: one to act in best interests of the profession; the other, to act in the best interests of the client.

So, when a client asks you to lower their tax bill, it’s rather like being charged by a bull. If you choose to face the bull, you’re going to get gored, but you can at least pick which horn you get gored with.

Now, I don’t think I’m the first person to think that the interests of the client and the profession aren’t mutually exclusive.

Clients do not ask us for moral counsel. They ask us for the use of our professional knowledge and experience. Giving any less than such, even if we deem the request to be immoral, would be unprofessional.

But should we neglect our personal values for professional purposes?

It’s this thought process that turns a conversation between a taxpayer and their adviser into a charging bull.

I’d suggest the question as to whether advising on tax avoidance schemes is moral or not, is an occasion when the answer is neither ‘yes’ nor ‘no’ but, ‘unask the question’.

Or ‘mu’, for those who have read Zen and the Art of Motorcycle Maintenance by Robert M. Pirsig.

For those that are uncomfortable by being approached by clients with tax avoidance motives, but do not wish to risk losing their client, I suggest a mu response.

Well, not quite mu. I recommend throwing sand in the bull’s eyes by putting some more comfortable planning opportunities in front of them.

Or singing it to sleep by giving a brief account of recent purposive interpretations of law that could conceivably scupper such schemes.

But to those who do wish to look in the mirror and ask whether such a situation is moral or not, I offer a quote from Plato.

I first came across it in the above-mentioned book and, while it relates primarily to art, I’d argue it’s a good yardstick here:

‘And what is good, Phaedrus, and what is not good. Need we ask anyone to tell us these things?’

Ben Saunders CTA is an assistant business tax manager at LexisNexis