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Phil Wickenden: Tax and the Cazorla conundrum


“Cazorla? That just sounds like something from a Pizza Express menu”.  That was Mrs Wickenden’s view as I did a really bad impression of someone who was not expecting anything out of our Champions League second leg tie in Monaco last week. You can be forgiven for not knowing what a Cazorla is (a tricky midfield maestro that looks a bit like an oversized child with a penchant for paella – sorry Santi.). However, it is a little less forgivable if you are an adviser and do not have a good handle on the suite of anachronisms emerging from the sweeping anti-avoidance movement: Dotas, Gaar, APNs and all that. Interesting, then, that 57 per cent of advisers are not clear on the rules relating to accelerated payment notices, 32 per cent remain in the dark regarding disclosure of tax avoidance schemes, and 26 per cent admit to not having a full grasp of the general anti abuse rules.

This is important because tax is demonstrably relevant to all aspects of financial planning, delivering a material contribution to the achievement of financial objectives – so-called “tax alpha” (though I am sure that is a term coined by Wickenden Senior purely to justify some kind of superhero outfit).

Failure to pay attention to the finer points will inevitably lead to sub-optimal outcomes. So here is a quick summary of the fairly relentless attack by HMRC on all forms of perceived aggressive tax avoidance, which has included:

  1. Continued action to prevent evasion
  2. Targeted anti-avoidance legislation
  3. “Naming and shaming ” individual and corporate tax avoiders
  4. The use of conduct and monitoring notices issued to high risk promoters of aggressive tax avoidance schemes 
  5. The successful use of APNs to secure “early” payment of tax by those with tax avoidance schemes that have a Dotas reference number and for which an enquiry has been opened
  6. Consultation on expanding and toughening the Dotas hallmarks and removing “grandfathering ”
  7. Continued litigation against aggressive schemes
  8. The launch of the Fair Tax Mark to encourage companies to be more open and committed to not using aggressive tax avoidance techniques and paying tax at (or close to) the main rate of corporation tax
  9. The proposed diverted profits tax applying a 25 per cent tax rate to profits diverted abroad by global companies trading in the UK.

Phil Wickenden is managing director of So Here’s The Plan


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