Tx notes fa22 Final

The European Union 
The UK o
ffi
cially left the EU on 31 January 2020 and the Brexit transition period came to an end on 
31 December 2020.
7. Tax avoidance and tax evasion 
Tax evasion 
Any action taken to evade taxes by illegal means, for example:
(a)
suppressing information - failing to declare taxable income to HMRC
(b)
providing false information - claiming expenses that have not occurred
Tax evasion carries a risk of fines and/or imprisonment.
Tax avoidance 
Any legal method of reducing your tax burden, for example taking advantage of an Individual 
Savings Account, making best use of available allowances, exemptions and reliefs, or spouses and 
civil partners dividing ownership of income producing assets to avoid higher rates of tax and enjoy 
lower rates of tax.
The term is also used to describe tax schemes that utilise loopholes in the tax legislation.
HMRC have introduced new disclosure obligations regarding Disclosure Of Tax Avoidance Schemes 
(DOTAS) and a “General Anti-Abuse Rule” (GAAR) to back up the existing specific legislation - the 
rule targets abusive arrangements (action that cannot be regarded as reasonable) arising from tax 
arrangements designed to achieve tax advantages such as decreasing a source of income or 
overstating a deduction.

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8. Professional and ethical guidance 
Accountants often act for taxpayers in dealings with HMRC. Their duties and responsibilities should 
be towards both clients and HMRC.