TAX • 19 FEBRUARY 2021 • 6 MIN READ

How far do we go: tax minimisation vs tax avoidance

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Code of Ethics for Beany

Beany abides by the Chartered Accountants of Australia and New Zealand’s Code of Ethics (see below) to keep its members and the public safe.

But how far do we go in advocating and advising our clients on tax minimisation? And what does tax minimisation mean as opposed to tax avoidance (or even evasion)?

Tax minimisation is where we use our best experience, judgement and training to interpret accounting and tax legislation to enable you, the taxpayer, to pay the least amount of tax legally possible.

Tax minimisation schemes that are outside the spirit of the law may attract the ATO’s attention. These are referred to as tax avoidance schemes or arrangements. They may be legal but it doesn’t mean they are ethical. Sometimes businesses may just push the envelope a bit too far. Instead of using legitimate deductions and allowances, a business may go out of their way to increase deductions via certain loopholes and technicalities.

Accounting is certainly not a ‘black and white’ business. There are many rules and regulations that when interpreted could be referred to as “grey”. Your accountant will be able to help you interpret the rules and regulations to ensure they are applied to your business in a way that does not push the boundaries and the spirit of the law. Any position taken by your business should be reasonable and defensible, even to the point that you would be comfortable defending it in a court of law.

As professionals, it’s fair to say that we often “know it when we see it” to paraphrase a famous saying. We can feel when a suggested tax scheme is fair and sensible, or when it is an attempt to subvert tax law.

Some examples of tax avoidance could revolve around:

Paying for things in cash or receiving cash for jobs
Incorrectly classifying revenue as capital
Manipulation of super tax breaks and concessions
Establishment and financial exploitation of multiple trusts

We spend our life navigating between the desire of our clients to pay the least tax possible and the heavy hand of tax legislation, which can ‘grind exceeding fine’*. In other words, the ATO don’t move quickly, but when they move, they can grind you down to a very fine powder.

We don’t want that for you. You pay us to keep you safe. But you also pay us to make sure you’re paying the least amount possible. That’s the grey area in which we live and work. If you’re unsure with our treatment of any item, the best thing is to chat to one of our friendly team who will be able to lay out the likely risks and rewards – ultimately the decision rests with the you, the taxpayer, but we are here to provide you with all the information to make the best decision.

Paying your fair share of tax is the law, paying too much is not – we’re here to help you find the perfect balance between your obligation and your desire for that holiday!

*(“The mills of the gods grind slowly, but they grind exceeding fine” Sextus Empiricus 6th century BC (really!))

Code of Ethics for Beany

Integrity: Honesty and straightforwardness in professional and business relationships
Objectivity: Avoid the impact of biases on our judgement, decision making or allow undue influence on others or yourself
Professional competence and due care: Maintain professional knowledge and skill at the highest standard expected by a member of the public when seeking professional advice. We keep up to date with current trends and technical standards
Confidentiality: Respect the right of our clients to have personal details and information kept secure, private and confidential
Professional behaviour: Compliance with laws and regulations relevant to where we live and do not behave in a way that reflects badly on us, on Beany or our profession

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Who are Beany?

We’re an online accounting firm that is always right here for you, your accounting pain relief. The most advanced technology lets us work way more closely with you than a normal accountant world.

We have a dedicated team of certified accountants and a support team to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.