We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

5 things we can learn from Al Capone about tax

With this month marking the 90-year anniversary of Al Capone being jailed for tax evasion, we share 5 tax lessons we can learn from his experience.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

Al Capone isn’t many people’s idea of a role model. The Chicago crime boss terrorised the city for decades during prohibition and was tied to all sorts of gruesome gangland killings. But when he was jailed for tax evasion – 90 years ago this month – his story became a cautionary tale that we could all stand to learn from.

Here are five useful tax lessons we can learn from his experience.

This article isn’t personal advice. If you’re not sure what’s right for you, seek advice. Remember tax rules can change, and their benefits will depend on your individual circumstances.

1. Everybody needs to think about tax

Capone thought he didn’t have to worry about tax because the government couldn’t collect it on money made illegally – he was wrong. Tax is important and we need to factor it into our plans. And of course it goes without saying, we don’t condone Capone’s behaviour.

Not only do we all need to make sure we’re paying our fair share, we also need to be careful not to pay over the odds. This means making the most of all of our allowances – from the marriage allowance to the capital gains tax allowance.

For example, you can realise gains of £12,300 in the current tax year, without having to pay any capital gains tax on it. If you have larger investment gains, it means you can stagger taking the profits, to minimise how much tax you pay.

It also involves getting to grips with the rules we can benefit from – like being able to share income producing assets between spouses, without triggering a tax bill. It means you can share the assets in a way that ensures you’re both using your personal allowance. The balance could then be held by the spouse in the lowest income tax band.

2. If you need to do your tax return, don’t put it off

Capone famously decided that someone in his line of work didn’t need to submit one, despite reportedly earning $60 million a year in untaxed income. If you’re at all unsure as to whether you have to complete a return, it’s worth checking if you need to do a self-assessment tax return.

If you have to submit one, it’s worth doing it sooner rather than later. If you’re employed, you might need to wait for your P60, which should be issued by the end of May, but then there’s no excuse.

By starting early, you have time to do some tax planning before you file, and might be able to take advantage of ‘carry back’ opportunities.

If you paid higher or additional-rate tax last year, for example, you can make a donation to charity in the current tax year, using gift aid. This can be used to cut your tax bill for the previous year.

It can be particularly useful if you paid a higher rate of tax in the previous year than you do now, because there’s more to claim. You also have time to plan how you’ll pay your bill, and have longer to correct mistakes on previous tax returns.

3. You need to get the details right

Capone and his lawyer were undone by the details during the trial. But also as his claim not to have any more taxable income didn’t square with his offer to pay some of the tax he owed. Clearly this isn’t the kind of slip-up that most of us risk.

We’re more likely to make far more mundane mistakes. While they’re unlikely to have such serious consequences, they could land us with a bill or force us to pay more tax than we should.

One common mistake is when we’re inputting pension details. Higher-rate taxpayers need to check if they have to claim for additional higher-rate relief on their pensions. They also need to make sure they enter the gross value of contributions. This isn’t just a total of all the money paid in – it’s everything they paid in, plus tax relief at 20% on top.

4. You can’t beat the system

When it comes to tax, trying to beat the system can be an expensive business, but you don’t have to bend the rules to pay less tax. You just have to stick to tried and tested blue chip planning, and take advantage of rules that have been set up specifically to help you save money.

The tax breaks on ISAs and pensions make them a no-brainer for millions of savers and investors. It’s also well worth considering the allowances of all the family, including children, who can start saving tax through a Junior ISA or Junior SIPP (Self-Invested Personal Pension) from birth.

5. What comes around – financially – goes around

It’s what saw Al Capone stripped of his fortune and sitting in a jail cell in Alcatraz. In your case, the best approach is to get to grips with your financial plans, and take sensible steps to manage your tax bills. Then all you’ll have coming to you is a nest egg, a generous pension, and a comfortable retirement.

4 tips to kickstart the new tax year right

Editor's choice: our weekly email

Sign up to receive the week’s top investment stories from Hargreaves Lansdown

Please correct the following errors before you continue:

    Existing client? Please log in to your account to automatically fill in the details below.

    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.


    Your postcode ends:

    Not your postcode? Enter your full address.


    Hargreaves Lansdown PLC group companies will usually send you further information by post and/or email about our products and services. If you would prefer not to receive this, please do let us know. We will not sell or trade your personal data.

    What did you think of this article?

    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

    Editor's choice – our weekly email

    Sign up to receive the week's top investment stories from Hargreaves Lansdown. Including:

    • Latest comment on economies and markets
    • Expert investment research
    • Financial planning tips
    Sign up

    Related articles

    Category: Investing and saving

    Investing in healthcare – where are the opportunities?

    The healthcare sector is enormous, absorbing over 10% of the economic output of many developed nations. We take a closer look at the risks and opportunities to watch out for.

    Derren Nathan

    30 Nov 2023 5 min read

    Category: Investing and saving

    Autumn statement – National Insurance tax change plus ways to help cut your tax bill

    The headline grabbing National Insurance cut might look like good news, but the tax burden is still set to be the highest it’s been since the Second World War. Here’s what’s changed and what you can do to reduce your tax bill.

    Helen Morrissey

    30 Nov 2023 4 min read

    Category: Funds

    How to invest in China – 3 fund ideas

    In our latest deep-dive into China, we look at three fund ideas to gain exposure to the Chinese economy and stock market.

    Henry Ince

    27 Nov 2023 6 min read

    Category: Investing and saving

    Autumn statement – what changes have been announced for ISAs?

    Following Jeremy Hunt's autumn statement on Wednesday, we look at what proposed changes to ISAs could mean for you.

    CJ Hill

    24 Nov 2023 5 min read