A raging storm
As I write this there has been a furore about certain wealthy or high-earning celebrities who have been involved in tax avoidance schemes in the UK. The furore is because of anger that these rich and successful people are seen to be paying to the Government less than their “fair share” in tax, whatever that is. I am not going to debate the subject here.
As you know, I work in tax. What this row has brought to the surface is that there are a number of promoters of tax schemes, and many of these are just “front-men” or “front-women” if there is such an expression. In other words, whether qualified financial advisers or not, they are first and foremost sales people encouraging people to buy into these schemes.
Gullibility and greed
I have read the websites of some of these people, and I assume they wrote their own copy or at least approved it. What terrifies me is that there are often serious inaccuracies in what they say, either because they are setting out to mislead or (much more likely) that they do not understand how these schemes work and they believe everything they have been told by the direct introducers and the devisers of these schemes.
This means that as business or financial advisers, they do not appreciate that these schemes are risky not only to the clients but to themselves. They are only interested in a fat commission, like the cartoon characters with cash-register eyes.
Now if the woman or man in the street were sold any sort of financial arrangement which did not work or caused them some financial embarrassment, they would consider looking for compensation. A very wealthy or high earning person would look for a lot of compensation. From whom might they look for that compensation? Why, from the person who first introduced them to the scheme.
Even if the scheme promoters and devisers were to take responsibility ultimately, there would still be the heartache for the “front-person”, the embarrassment and yes, once again, damage to the person’s reputation.
Within the tram-lines
Now, I am very good at what I do. That is because I make sure I understand everything about it. I keep myself up-to-date with my CPD. However, I am not an expert in everything. In fact I am not an expert in many business skills, or even in some aspects of tax, which is why I know when to refer a project to someone else. I try to be a business good connector, but I keep out of the loop.
If we involve ourselves in business matters we don’t understand fully, at the very least we make fools of ourselves. At worst we can get sued for a lot of money, and if we have strayed from our comfort area we may not even be covered by our insurance.
It cannot be worth anyone putting at risk the roof over their heads for a reckless business decision. I wouldn’t do it. Nor should you.