For instance, if you put your money in a tax-free Individual Savings Account, or if you're a company and you invest in research, you're taking advantage of tax breaks which the government actually wants you to use.
The tax AVOIDANCE the authorities condemn is when you seek out loopholes in the law to pay less.
At one time workers in the City of London were paid in crates of wine to avoid having to pay National Insurance - it was legal, but not at all what parliament intended, so the loophole was closed.
But the worst the perpetrators risk is having to pay the tax they owe, along with interest and, if there's a delay, a penalty.
Tax EVASION is the deliberate flouting of the law in order to get around tax - and hiding money in an offshore tax haven in a way specifically designed to escape scrutiny is a likely first step towards evasion.
It might be income tax, capital gains tax or corporation tax that's rightly due in the UK.
The fines range up to twice the amount of tax owed and the evader can be prosecuted and sent to prison.
In one recent case the sentence was 5 years.