Wednesday, January 16, 2013

Half of tax professionals agree with TJN on tax avoidance

OK: the headline claims too much, since this isn't the result of a scientific poll - but there's something in it. Accountancy Age has pitted TJN's Richard Murphy against Stephen Herring, tax partner at BDO, in a debate entitled Tax avoidance: fair or foul? Is tax avoidance an unacceptable exploitation of the tax system?

The debate isn't over, but the attached picture shows the current state of play at the time of blogging. The two are neck and neck, on 50 percent each. Which is a truly remarkable achievement by Murphy, given that the readers of Accountancy Age are generally tax professionals, many of whom make their living by helping others avoid tax. And these are tax professionals mostly in the UK, where the provision of aggressive tax avoidance schemes to the world has been a growing feature of the economy. Even a couple of years ago, this result would have been unthinkable.

And in the court of UK public opinion, of course, TJN has won, hands down. And there's a simple reason for that. It's because in this complex minefield our arguments are intellectually coherent, and quite obviously right. A key task for us now is to spread our arguments beyond those places where the arguments are won, to many other parts of the world.

Go to the debate (and if you want to, vote) here.

Among many of Murphy's points:
"Let's be clear what tax avoidance is in this case. It's about working in the grey area of uncertainty where the law is unclear. So you can't claim it's legal, because no one knows that. Instead it's about exploitation of uncertainty to free-ride the system."  
Many journalists, perhaps for fear of libel, feel they have to write 'tax avoidance is perfectly legal.' But Murphy's comment makes clear that they are mis-educating their readers when they say so: the correct way to put this is something along the lines of 'tax avoidance is not obviously illegal." That's not quite as strong, libel-wise, but sometimes a little courage is called for: very often the libel lawyers would let such a statement through.

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