Tax avoidance and tax evasion (UK)
HMRC describes tax avoidance as bending tax rules to obtain an advantage Parliament did not intend, often through contrived arrangements. Evasion involves illegal deliberate concealment or misrepresentation to reduce tax due. Legitimate tax planning can use reliefs for their intended purpose. A purported avoidance scheme may fail when challenged; do not assume that labelling an arrangement avoidance proves it effective or that all tax planning is evasion. Apply the law and facts for the relevant period.
Worked example
A trader deliberately omits sales from records to reduce a tax return. That is an evasion example; claiming an available relief for its intended purpose is a different question.
Common mistake
Equating lawful intended relief claims with evasion, or assuming a scheme necessarily works merely because it is described as avoidance.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |