The Income Tax Act 2007 has a provision which allows Inland Revenue to collect outstanding tax of a company from another similar company if it considers there was an arrangement to avoid paying tax due.

The company can have similar shareholders or directors and the rule applies to most taxes.

The message is clear, know the law – there are trips and traps for advisers and their clients.

Government are enforcing the law with increased effect. It cannot be assumed that there will be no consequences for actions.