The argument that tax avoidance is legal is now dead and gone, for good. The world of tax abuse changed today, for the better.
April 15 2013
The new Guidance on the new General Anti-Abuse Rule (GAAR) in UK taxation has been published today. I sat on the committee drafting this guidance, and so there are some restrictions on what I can say about it, especially with regard to process, but no restrictions at all on what I can say about what it means.
First, let’s get the obvious observation out of the way: despite all that I will say that is positive about the GAAR it remains the case that this is not the legislation I wanted to tackle tax avoidance in this country. I’ll deal with that in a separate post, because this GAAR does have major structural problems within it.
And then let me say that within this constraint I welcome the GAAR and most especially parts A to C of the new Guidelines that are published to day.
The reason for my enthusiasm is that the GAAR Guidelines are without precedent as far as I know in UK tax law, because they are in effect legal precedent in their own right that any court has to take into account once Royal Assent is given. And that opportunity has been seized by those drafting them to fundamentally change the environment of UK tax avoidance law forever.
Guidance on the
new General Anti-Abuse Rule (GAAR) in UK taxation has been published
today:
New Rules on UK Tax-Avoidance
First, let’s get the obvious observation out of the way: despite all that I will say that is positive about the GAAR it remains the case that this is not the legislation I wanted to tackle tax avoidance in this country. I’ll deal with that in a separate post, because this GAAR does have major structural problems within it.
And then let me say that within this constraint I welcome the GAAR and most especially parts A to C of the new Guidelines that are published to day.
The reason for my enthusiasm is that the GAAR Guidelines are without precedent as far as I know in UK tax law, because they are in effect legal precedent in their own right that any court has to take into account once Royal Assent is given. And that opportunity has been seized by those drafting them to fundamentally change the environment of UK tax avoidance law forever.
Richard Murphy on tax and economics
Richard Murphy and his colleagues have effectively re-booted the ever increasingly bizarre tax decisions of HMRC Commissioners, Special Commissioners and UK Judges who have for years ruled on tax planning schemes so complex that only a secret coven of tax insiders - privy to the twists and turns, sub-clauses, sub-sub-sub clauses, interpretations, special guidelines and protocols of the UK's 7,000 pages of Finance Acts and Taxes Acts - had any chance of understanding them.
For decades, Lord X has been allowed by law, if wearing green socks on a Tuesday morning, in the third week before Pentecost, to shovel his wealth and income to his pet horse, legally Resident and Domiciled in Monte Carlo, and pay no tax. In contrast, commoner Fred Y, following precisely the same legal maze, was bankrupted by HMRC and jailed for Fraudulent Conspiracy. Over about 30 years, the privileged few, their Family Trusts, trusted colleagues, Bearer Bond Companies, corporations and Limited Liability Partnerships (another recent legal fiction) have siphoned up to $3 trillion out of the UK economy - and into tax free tax-havens - some, the most privileged, with the blessings of the UK Courts. But no longer - The Spirit of the Law will henceforth apply.
Richard Murphy might justifiably say "Look upon my works Ye Mighty - and find a good lawyer". As "Tax-Avoidance, which is of course wholly legal" schemes are re-examined by Courts - the misled clients, their bookkeepers and their professional advisers will find themselves under pressure to pay the taxes they have "legally" avoided since 1980. As we have said before - if you are one of the unfortunate clients - revert to your advisers' Professional Indemnity Insurance - to recover your costs and losses.
BREAKING NEWS GLOBAL TAX ATTACKS - APRIL 2013:
Swiss Banks fined
and under attack by USA
World reactions to
tax-haven revelations: GLOBAL
REACTION TO TAX-HAVEN DATA - EXCEPT...?
Guardian reports
on BVI tax-evaders:
TAX-EVASION-CAPITAL-FLIGHT
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