Accounting and Finance Functions

[Tammi]

Hi, everyone :)

What is the difference between tax avoidance and tax mitigation?

I can't defferentiate them:(

[Acid]

Hi Tammi,

In the simpliest terms ,One is legal way to avoid the tax and one is illegal way to avoid tax.

Regards
Acid

[Tammi]

Hi, Acid,
Thanks for your answer but I got really confused :(
I think that tax evasion is an illegal way to avoid tax.
Are you sure that tax avoidance is also an illegal way?
Thanks

[Acid]

How about If I say that tax mitigation is a part or component or simply another way term of TAX AVOIDANCE?

Tax mitigation can be ways in which businesses may want to reduce the tax payments/liabilities or use tax shelters , in this way they would mitigate the tax payments. So this may be termed as Tax avoidance as well.

And you are right that tax evasion is illegal way to avoid tax , so be careful If you do that then I will inform it to HMRC :)

I hope this helps

Regards
Acid

[Snehal K]

Hi

Even I feel that tax avoidance and tax mitigation mean the same. Tax mitigation / avoidance refer to identifying ways in which tax liability can be legitimately reduced. It is legal way to reduce tax. Whereas tax evasion is always based on a deliberate intent not to pay tax that is lawfully due. So tax evasion is illegal.

[gaylet]

According to one of the study guides that I have followed - tax avoidance is finding loopholes to minimise tax bills that are also against the ethos and beliefs of the government. Tax mitigation is to reduce tax bills but whilst still following the beliefs and ethos of the government.

[Shari Hooper]

Hi I think tax avoidance is legal but not sure what tax mitigation is .
Maybe it is illegal

[Davina411]

is changing the name of the business an example of tax avoidance?

[Abidec]

tax evasion is illegal way to avoid payment of tax, while tax avoidance is a legal way of avoiding tax payment