And the accusation that I was a hypocrite for facilitating tax avoidance flooded in from those who should undoubtedly know better. I could, of course, duck the issue, but those who know me are aware that’s something I’m not inclined to do.
However the allegation that I and / or the Fair Tax Mark were facilitating tax avoidance has been made. Nick James, an accountant and regular commentator on this blog dealt with this suggestion very appropriately, saying to one of those who made this allegation:
Nor does it seem to occur to you that taking advantage of a specific law offering a specific tax relief is no more tax avoidance than deducting your legally mandated annual personal allowance from your income in order to arrive at your taxable income.
I agree. And, for the record, I have never defined tax avoidance in any other way. As I say in my briefing on this issue:
Tax avoidance is seeking to minimise a tax bill without deliberate deception (which would be tax evasion) but contrary to the spirit of the law. It therefore involves the exploitation of loopholes and gaps in tax and other legislation in ways not anticipated by the law. Those loopholes may be in domestic tax law alone, but they may also be between domestic tax law and company law or between domestic tax law and accounting regulations, for example. The process can also seek to exploit gaps that exist between domestic tax law and the law of other countries when undertaking international transactions.
The tax avoider faces uncertainty when pursuing their activities. That uncertainty focuses mainly on their not really knowing the true meaning of the laws they seek to exploit and taking the chance that either a) they may not be discovered to be tax avoiding or b) that if they are the interpretation placed on the law that they seek to exploit is favourable to them. Their risk of penalties arising as a result of their actions depends upon what the outcome of these risky situations might be.
There is no way on earth that claiming tax relief under a scheme promoted by the law, with that tax relief, if due, being wholly consistent with the spirit of that law, can be tax avoidance and there is no way anyone can accuse me of inconsistency on this issue. To do so would be as absurd as saying I am tax avoiding by claiming tax relief on my properly incurred business expenses, when the law says I may.
Excellent. So, Lady Green, a non-resident and non-domiciled not UKian taking dividends from an English company in her country of residence is not tax evasion, it is not tax avoidance and it is not tax abuse. Amazon insisting that it’s warehouses are not a permanent establishment, as international law insists they are not, is not tax avoidance. Boots claiming interest deductions is not tax abuse, Starbucks, paying royalties to the Netherlands as EU law expressly states they must be allowed to do sans tax is not tax avoidance and….well, we could go on but there’s really nothing left of all of the cases that Ritchie has been whining about all these years, is there? Google, Apple and Facebook treating the European Union as a single market when that’s exactly the intention of the Single Market rules: none of these things are of the slightest concern to any of us precisely because they are simply people using the law, entirely legally, to do what the law expressly states they may and quite possibly should.
Good, glad we’ve got that settled then. Now, what’s Ritchie going to do with the rest of his life then?