Tax & ‘moral obligations’

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28 June 2022

Tax & ‘moral obligations’

Every year or so, the news headlines are splashed with statements of outrage that some high profile person or organisation has minimised their tax liability, and that this is ‘morally offensive’. Such headlines tend to frustrate and annoy me (and most tax professionals) for two main reasons: rarely are the facts accurately or fairly presented, if presented at all; and the notion of ‘moral obligation’ is entirely subjective and therefore it is unreasonable to consider it in isolation when it is not applied universally to all aspects of life (I haven’t seen any headlines suggesting that we are morally obliged not to ask for discounts when buying goods and services; or that anyone who exceeds the speed limit must voluntarily hand themselves in to the police to be fined).

Relevance of laws

Essentially the laws apply equally to all individuals/organisations in the same circumstances, which means that there is equality of opportunity – this is, and certainly should be, a fundamental principle of all right-thinking societies. However, not all laws will be relevant to all individuals or organisations – that is a simple fact of life. That in itself does not make a particular law unfair. We must surely only judge outcomes as being unfair where there are different outcomes for those in broadly similar circumstances, or where the laws disproportionately benefit a particular group – although this last point is, again, somewhat subjective.

These are not political statements. If you disagree with the outcome of the law, get the law changed. Do not decry those to whom that law applies.

Application of laws

As a tax professional, my obligation to my clients is to minimise their liability to tax within the context of the applicable law. We have to follow the law plain and simple – so if a tax law benefits my client, I will apply that benefit to my client.

A challenge arises when the law is unclear as to its application to a particular set of circumstances. A lack of clarity creates a lack of certainty and therefore the possibility of unexpected or unintended consequences. My job is to assist clients to navigate through these uncertainties, to seek clarification where it is available, and to achieve the best possible outcome for the client.

This is the ethos of Haines Watts – do it right; do it within the law; achieve the best possible outcome for your client based on their circumstances.