When is tax avoidance not tax avoidance?

Posted by Christie Malry on April 16, 2013 at 6:54 am

In a somewhat triumphant post, Ritchie proclaims:

So let’s be unambiguous: the argument that tax avoidance is legal has now been cast aside, forever. That is no longer true. And for those in doubt, a case that in 2007 see here, page 9 said needed to be over-turned for good has also been cast aside by this GAAR Guidance

So let’s be clear: the argument that loopholes are there to be exploited is now dead. And the rule in Partington v The Attorney General of 1869 is no longer UK law.

Actually it means that Ritchie's bold claims about tax avoidance are found wanting. He is going to try to argue like this:

  1. "I say a company X has avoided tax"
  2. "Tax avoidance is illegal under the Guidance"
  3. "Therefore what company X has done is illegal".

It all rather hinges on point 1. Yet, most taxpayers are already compliant within the law and within the Guidance, so this slight change in emphasis is going to have only a limited impact.

He's drawn the wrong conclusion from the wording. What it means is that great swathes of what he has previously claimed to be tax avoidance have, today, been categorically defined as tax compliance by the Guidance. The Guidance makes it clear that it's only the most extreme, unintended distortions of the law that are to be considered avoidance. Which is what sensible people have been saying all along.

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