Wheatley’s great lesson

Tonight’s edition of ABC Television’s Australian Story, featuring music promoter and convicted tax cheat Glenn Wheatley promises to be compelling viewing, if the preview material is anything to go by.

In what appears to be an extremely candid interview, Wheatley says he became the “poster boy” for the Australian Taxation Office’s Operation Wickenby crackdown on offshore tax havens, and admits he was surprised to be sentenced to two-and-a-half year’s jail, with a 15 month minimum.

Wheatley says he knows plenty of others who dodge tax using offshore accounts, but admits this is no excuse.

However, the most extraordinary extract I have seen this morning concerns Wheatley’s motivations for getting into the tax pickle in the first place.

“I was just being smart. I was just being confident, cocky, again living on hubris and thinking ‘I’m not alone here, a lot of people do it’,” he says.

“I mean there’s something quite… sexy about having an offshore bank account. I don’t know what it was. I mean, I just knew I shouldn’t have done it.”

That’s the first time I’ve heard of offshore bank accounts – or anything to do with tax, for that matter – being described as “sexy”, but it does illustrate a bigger lesson here.

No one likes to pay tax, and every smart entrepreneur employs advises who can help minimise their tax bill.

But when entrepreneurs start structuring their affairs with the specific purpose of taking advantage of aggressive tax planning, that is a sure sign that you are in the danger zone.

It’s not glamorous, it’s not smart, it’s not pushing the envelope – it’s just not worth it. Even if you don’t end up in jail like Wheatley, the time, effort and money you dedicate to cutting your tax bill is always better spent growing your business.

As we always say, don’t mess around with the numbers behind your business, be it in relation to your accounts or your tax returns.

As Wheatley’s case shows, it never ends well.