Despite the claims made by some company directors and some apologists for this abuse, company directors are under no obligation to minimise their tax bills.

I think it would be a very strong argument that for a company not to take the tax deductions and allowances as allowed by law would be a breach of the directors\’ fiduciary duty.

6 thoughts on “Eh?”

  1. Section 172 Companies Act 2006:
    “Duty to promote the success of the company
    (1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to –
    (a) the likely consequences of any decision in the long term,
    (b) the interests of the company’s employees,
    (c) the need to foster the company’s business relationships with suppliers, customers and others,
    (d) the impact of the company’s operations on the community and the environment,
    (e) the desirability of the company maintaining a reputation for high standards of business conduct, and
    (f) the need to act fairly as between members of the company.”

  2. I once asked RM if taking the personal income tax allowance constituted not complying with the spirit of the tax law.

    He called me an idiot.

  3. Stuff fiduciary duty, it’s their patriotic duty as law abiding citizens.

    The tax law, including all the loopholes, is the law of the land, the will of the people as expressed by their elected representatives. To not make use of every opportunity to minimise one’s tax bill would be like kicking the generations of martyrs whose sacrifices gave us parliamentary democracy in the goolies.

  4. “the generations of martyrs whose sacrifices gave us parliamentary democracy in the goolies”: next, in the ear, nose and throat.

  5. Gleeson CJ, former Chief Justice of Australia:

    “Legislation rarely pursues a single purpose at all costs…. it may be said that the underlying purpose of an Income Tax Assessment Act is to raise revenue for government. No one would seriously suggest that all …income tax legislation is to be construed so as to advance that purpose. Interpretation of income tax legislation commonly raises questions as to how far the legislation goes in pursuit of the purpose of raising revenue….The question then is not: what was the purpose or object underlying the legislation? The question is: how far does the legislation go in pursuit of that purpose or object?”

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