So what is tax avoidance? There is at present no precise definition. What it definitely is not is claiming a tax relief or allowance that is definitely provided for in law, presuming that the circumstances for making the claim, also prescribed in law, are met. So, for example, claiming tax relief on a pension contribution within permitted limits is an action undoubtedly intended to reduce a tax bill, but the law specifically permits that the reduction takes place so it cannot be claimed that this is tax avoidance. Anything that is definitely legal cannot be undertaken as if it was an abuse of the law.
Well, quite. Therefore there is no definition of tax avoidance other than whatever Spud thinks you shouldn’t be doing. Which ain’t a basis for a law.
If it’s against the law it’s tax evasion already.
If it’s not against the law then it’s not against the law. QED.
As a result, tax avoidance is the activity that takes place within the grey space between being tax compliant, where a person specifically seeks to comply with tax law, and tax evasion, where they specifically seek to break that law.
No, it isn’t and it cannot be.
Someone takes an action which has the effect of reducing the amount of tax they have to pay. This is examined and becomes either tax compliance, in which it is legal to do so, or tax evasion in which it is not. There is, in fact, no such state as tax avoidance which can be punished.
And for those worried that injustice might result, the taxpayer would always be able to offer the defence that the apparently unnecessary step was commercially required. But the onus of proof would be on them,
Reversing the basic structure of English law to please the Lord High Tax Denouncer. Fuck off, matey.