Tax avoidance: Fair or foul?

caution-taxes-tax-230x142There’s an interesting debate going on at AccountancyAge between tax justice campaigner Richard Murphy and BDO partner Stephen Herring. Both accountants by trade, but coming to radically different conclusions.


Murphy sets out his position on the morality of tax avoidance thus:

Where does the boundary lie between moral and immoral as Ray McCann asks? That’s easily answered: it is crossed when the action of the taxpayer could not have been anticipated by parliament and confers a benefit never intended by it. 99% of people have a moral compass that is 100% reliable on the issue. They can spot tax avoidance when they see it. This elephant test works.

Herring counters:

Put quite simply, we should never require an individual or a business which has three or four routes to make an investment to be required, or indeed expected, to choose the one which generates the highest tax liabilities; to choose another route is not ‘cheating’.

It’s sure to be a heated debate as I learned when I put on my own Tax & Transparency Forum last year. But what surprises me is how evenly split opinion is on the subject. As I write, 50% of AccountancyAge readers are backing Murphy and 50% are on Herring’s side.

Voting is still open, so be sure to have your say.

In the interests of transparency, which underpins the entire argument, I voted for Murphy.

2 thoughts on “Tax avoidance: Fair or foul?

  1. No – sorry – I still don’t get it. Why is basing this whole argument on some ill defined moral argument reasonable ? Has everyone been brainwashed ?

    There is no equality of arms here – the Government has the power to legislate – including a GAAR if they like – why should citizens or corporate taxpayers be expected to work out their own morally correct tax payment just because they can’t be bothered to formulate the law in a reasonable manner ?

    I am not up in arms about the Government’s inability to spend the money ‘fairly’ so why does the obligation work the other way around ? This is an interesting article on the topic

    • Everyone has not been brainwashed, everyone just wants an NHS. That’s why there’s such a big public outcry about it now. Structuring to take advantage of legitimate tax reliefs is fine, but it’s quite clear when the government intended a relief and when an artificial structure with no commercial justification except tax avoidance has been created to get around the law in a way the government never intended. Governments should of course do more to close these loopholes. But corporations will still be judged by the public and the media for the morality of their activities. It’s up to them to weigh up what this reputational hit might do to their business. All I would say is that they shouldn’t be ignoring it.

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