Large corporates and disclosure: beware ‘cheating the revenue’

What is the difference between legal but unsuccessful tax avoidance and illegal tax evasion when both involve a liability which has not been self-assessed? Honesty. An unsuccessful avoider honestly believed that no tax was due. Honesty contains a ‘reasonable person’ test. As public opinion hardens around avoidance, juries are more likely to question whether a belief was properly held. Disclosure is key. Do you know what you need to divulge about complex planning and uncertain positions? The inadequate disclosure of unhelpful matters could be perceived as a dishonest attempt to ‘win’ without being fully drawn on the merits – and thus a ‘cheat’ on the revenue. HMRC might be on the look out for a case to take.