Question

Identify a case of tax evasion or avoidance based on the given options.

Robert earns most of his income from taking commissions on sales of water well construction jobs. He deferred substantial income to the following year. When Robert was audited, the HRMC found no mistakes on his taxes. The HRMC determined Robert has filed correctly in claiming the deferred income, and £30,000 of assessed taxes owed, were reduced substantially by taking advantage of several provisions in the tax code. There was no penalty or fine assessed. What was Robert was most likely guilty of if anything?

A.

Tax Evasion

B.

Tax Avoidance

C.

Violating the General Anti Abuse Rule

D.

Violating HMRC statute

Answer 1

Robert Earns his income  from commissions on sales of water well construction jobs. He deferred substantial income to the following year using the rules of law for Avidance of tax.

Generally Avoidance of Tax is legitimate reducing of taxes suing tax codes, tax credits, tax deferral plans,tax deductions etc. It's a way to avoid paying taxes,by finding the loopholes but since it's in the tax code it's not to be treated as tax evasion.

Thus in the given case Robert has reduced the tax by taking several provisions of tax codes hence he has not been penalised of fined.

Thus correct answer is option --B.