What is ‘tax avoidance’?

Conscience and Consciousness

George Osborne says he’s dealing with tax avoidance. He is and he isn’t. It all depends what you mean by ‘tax avoidance’. As Richard Brooks demonstrates in his excellent book ‘The Great Tax Robbery’, the government has made some moves to clamp down on ‘tax avoidance’, but only understood on the very narrow definition according to which tax avoidance involves transactions that are ‘unintended and unexpected [by legislators].’

According to this definition, Phillip Green did not ‘avoid tax’ when he arranged matters so as not to pay a single penny of tax on his 1.2 billion dividend from Acardia (the company that owns Top Shop, Dorothy Perkins and British Home Stores) by putting the company in his wife’s name (she happens to be a resident of Monaco). According to this definition, Starbucks is not avoiding tax when it shifts profits outside the UK and so manages not to pay UK…

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