Links between tax avoidance and complexity workshop

On the 26 June, the OTS held a workshop involving a small but diverse group of renowned tax professionals and commentators. The aim was to discuss the links between tax complexity and tax avoidance, to help inform OTS thinking.

Going forwards, the OTS team will gather further views and data on avoidance and complexity, and present some emerging themes and proposals at a longer workshop in the autumn, and then publish a report by the end of the year.

A comprehensive readout of the discussion, which highlights a number of interesting points, can be accessed in PDF format by clicking on the following link: OTS avoidance and complexity workshop – 26 June 2014 

The group began by discussing how poorly designed legislation provides opportunities for tax avoidance, regardless of whether the legislation is simple or complex.

Attendees discussed how avoidance is born of out of uncertainty or a lack of clarity or understanding in legislation, and when provided with a set of rules, people will interpret them in the way that is most beneficial to their circumstances. However, it was explained that there is a thriving market for people that do not want to take risks when it comes to dealing with tax, and are willing to pay for as much ‘certainty’ as is possible.

It was also explained that opportunities for tax avoidance originate because of badly designed boundaries in the tax system, in particular, boundaries between different taxes that can be crossed too easily to create a more advantageous tax position.

The group went on to talk about whether expressing the intention behind legislation better would help tackle avoidance. But there were mixed views as to whether it would help to state the policy intention in legislation as an aid to the Courts.

The group felt that there had always been a market for tax avoidance, but opportunities ebbed and flowed over the years in the light of legislation and case law (and public opinion).

If you want to join in the debate we’d love to hear your thoughts – email them to ots@ots.gsi.gov.uk

 

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