In which I agree with @RichardJMurphy

Yes, I agree, I think that his Bill should indeed be passed into law:

So what would I like someone to do? I’d like a General Anti-Tax Avoidance Principle to be included in UK law. Not the nonsensical apology of a general anti-abuse rule that the government is proposing but something like the Bill Michael Meacher put to the House of Commons in September this year.

Now, I am biased: I wrote this Bill. But it would stop tax avoidance in its tracks, make using tax havens hard, let H M Revenue & Customs tackle companies like Google and rebalance the tax equation in favour of the honest and the poor.

This one, here.

Which is so badly written that it contains this clause:

(2) Arrangements are not tax arrangements if—
(a) the arrangement was specifically permitted by legislation or regulation
relating to any of the taxes referred to in section 1(3) or is clearly
consistent with principles on which the taxes referred to in section 1(3)
are based whether express or implied, or

Thus anything that the law already says may be done is not, by definition, tax avoidance.

Which means of course that none of what Google is doing is tax avoidance. For EU law specifically allows you to sell from one EU country into another and pay your corporation tax where you\’re selling from. Nor Amazon, for EU law specifically allows that VAT is payable at the rate of the company you are selling from on digital goods. Or Starbucks: EU law actually states that it is illegal for one EU state to tax royalty payments flowing to another EU state. Or Boots, EU law states that it is illegal to tax interest payments flowing to another EU state based corporation. Or Vodafone: that whole argument was over whether CFC rules apply to an EU subsidiary and they don\’t. Or the Greens: UK law specifically states that dividends paid to non-resident and non-domiciled foreigners are not taxable as income in the UK.

Absolutely none of the behaviour that Ritchie has been whining about over the years would be taxable under this Bill. And much that is currently maybe, mebbe not, would not be.

No, really, we should ensure that this Bill becomes law. For it will eviscerate the ability of HMRC to oppress us all.

I recommend it to the House.

3 comments on “In which I agree with @RichardJMurphy

  1. That’s all well and good, but we all know in Richie’s Humpty Dumpty world this Bill will mean exactly what Ritchie wants it to mean, nothing more nor less.

  2. That has to be one of the worst drafted pieces of tax legislation I have ever seen. Of particular note is section 3, and I have to wonder at the use of the phrase “would seem more appropriate”, and how that would be interpreted by the courts. I suppose that Judge Jefferies may have taken the view that it “would seem more appropriate” that several people should be hanged.

    This sort of legislation is doomed to fail, not least because some of the most robust avoidance schemes rely on the wording of specific avoidance provisions, applied in circumstances other than those intended (although the intention of parliament is not always explicitly stated). A general anti-avoidance provision is never going to cause a disapplication of a specific anti-avoidance measure.

  3. IANAL, but can you pass a law requiring something to be “clearly consistent”? How does anyone know what is “clearly consistent” or “clearly” anything? What if you’re consistent, but in an unclear fashion? What does it actually mean?

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