There will be no fines for tax avoidance advice

Reports that City and accounting forms will be prosecuted and fined for offering tax avoidance advice:

City firms that help businesses run tax avoidance schemes could face huge financial penalties under fresh Government proposals.

This is not going to happen.

Banks, accountancy firms and lawyers could be forced to hand over underpaid tax if they are found to have broken the law. 

That might.

But we think it hugely important that everyone understand the basic point here. There is no such thing as tax avoidance. There are efforts to avoid tax, that's most certainly true and it's everyone's right to do so. However, there is no such thing which can be finally determined to be tax avoidance.

To put it in simplistic terms. One can simply pay tax - tax correctness perhaps. One can simply refuse to pay tax - tax evasion. And one can attempt to wriggle - that tax avoidance. But tax avoidance is not a state or a thing, it's that attempt. And when examined it collapses down into one of the two possible end states.

The attempt at avoidance, that wriggling, is declared legal and thus it is also known as "paying the correct amount of tax". It is declared to be illegal and it is thus tax evasion. There is no room left in our definitions for something that remains tax avoidance after it has been examined.

Thus our rather bold statement at the top. No one is going to be fined or punished for offering advice on how to pay the correct amount of tax. People who advise on how to break the law through tax evasion may well face fiercer penalties than they do now. But given that the interim activity, tax avoidance is not illegal and cannot be made illegal then therefore neither will advice about it.