Risk-mining the public exchequer: some follow-up points. Guest post by David Quentin


A few months ago I published a discussion paper called Risk-mining the public exchequer, the thesis of which breaks down, in summary, into these two propositions:

  • The distinguishing feature of “tax avoidance”, as a taxpayer behaviour to be contrasted with “legitimate” tax planning, is the deliberate creation or introduction of tax risk (e. the risk that you might owe more tax than you say you owe).
  • The opprobrium attaching to the label “tax avoidance” is applicable in the circumstances of deliberately-introduced tax risk, because introducing a tax risk factor in order to assess yourself to fall on the right side of it is to create the possibility of underpaying your tax.

I need to stress at the outset (to forestall a common misunderstanding) that merely adopting an uncertain filing position is not enough to constitute tax avoidance in my analysis. Risk-mining the public exchequer (which is the name I give to tax avoidance as defined in my paper) is a two-stage process: you deliberately introduce a tax risk factor in the way you arrange your affairs, and then you subsequently assess yourself to fall on the right side of it. Any adoption of an uncertain filing position could be said to create tax risk, but that tax risk is only deliberately created for the purposes of my analysis if the risk factor in question was introduced into the taxpayer’s affairs pursuant to deliberate prior tax planning.

Jolyon has very kindly invited me to write further on the subject on his blog, since a guest blogger of his has addressed it below, and I thought I would also take the opportunity to pick up some points raised elsewhere.


An assumption that my paper relies on is that tax planning (whether or not it amounts to “tax avoidance” by whatever definition) is a discrete and identifiable input into the eventual form that a transaction or a business structure takes. I did not expect this to be a controversial assumption, and I have never known it to be challenged in circumstances where tax planning is said to merge indistinctly into tax avoidance in that one-dimensional continuum of increasing taxpayer aggression that one so often hears about.

What I do in my paper is plot that one-dimensional continuum (expressed in terms of amount of tax said to be saved) onto a two-dimensional graph with filing position certainty on the other axis, and show that what is supposed to be an undistinguished linear continuum in fact has a distinct kink in it where the “legitimate” planning stops and the avoidance starts. Since this challenges the conventional idea that tax avoidance cannot be objectively distinguished from “legitimate” tax planning, it has caused some to wonder if the entire category of tax planning (at whatever degree of aggression) can really be said to have an objective real-world referent, distinct from the other inputs into the form of business transactions and structures.

One such post-structuralist is Iain Campbell, who wrote up his thoughtful and very welcome response to my paper in a comment on Andrew Jackson’s “Render Unto Caesar” blog here. “Where” Iain asks “is the evidence the structure was put in place, not from commercial/business considerations, but from acting in accordance with tax advice that created [tax] risks?”

I should emphasise that my paper was a theoretical one; it does not make any practical recommendations. If it were proposed, however, that my theoretical definition of tax avoidance be converted into a real-world legal test to be applied in a forensic context (for example as a component of a penalty regime in circumstances where a taxpayer is found to fall foul of his or her own deliberately inserted tax risk) then Iain’s question would be an extremely pertinent one. By way of answer, I would suggest that the evidence will probably be on a server farm in someone’s virtual filing system.

I say this because, in internal communications regarding a proposed transaction or business structure, the tax planning input almost always emanates from either an internal tax function or an external adviser with a specific remit to advise on tax, and it therefore flags itself up as such. Business decisions are taken by business people who take into account all relevant factors (of which tax will be one), and so their motives or purposes can be hard to unpick with clarity, but the content of the tax advice they are relying on should be discernible by reference to the documentary record. Indeed if it isn’t then someone somewhere has probably been negligent.

Iain asks (with reference to the example of Google’s UK tax structuring) “if the act of providing goods or services cross-border creates a tax risk, does that arise from following tax advice, or from the commercial decision?” It seems to me the question is probably best analysed as breaking down into two components: (1) what was the content of the actual documented tax advice insofar as it tracks through to the actual eventual form of the transaction or structure, and (2) did adopting that tax advice increase tax risk or introduce tax risk factors as compared with the form the transaction or structure would otherwise have taken? Clearly as bystanders without access to the full documentary record we can’t answer these two questions, but I agree that we would need to feel that they are capable of being answered if we want to apply my definition in practice.


The main purpose, or one of the main purposes, of my paper was to correct the (more-or-less ubiquitous, but false) perception that the effect of tax avoidance is to reduce the amount of tax legally payable. This ignores the fact that some tax avoidance (and it is not possible to say as at the point of self-assessment which tax avoidance) goes on to be found by the courts to fail. And tax avoidance doesn’t just fail where it falls foul of anti-avoidance law: tax avoidance can fail by falling foul of any risk factor that it introduces, whether the risk factor be to do with the law, the facts, the accounting assumptions, the mechanical effectiveness of the implementation, the valuation of an asset, whatever. And if the tax avoidance is found by the courts to be ineffective then the tax avoider turns out to have assessed itself as owing less tax than turns out to have been legally payable. The tax reduction was not “legal”; it was a figment of the taxpayer’s imagination. By my definition, therefore, “tax avoidance” means any tax planning in which there is a risk that the saving that the planning is said to yield turns out to have been imaginary.

The avoidance apologist will counter that there is nothing wrong with the taxpayer claiming the benefit of imaginary tax savings; the law is uncertain and the tax avoider cannot be blamed for having wrongly applied it to its position. The flaw in this argument is that it was the taxpayer itself who introduced the risk factor in question, as part of its tax planning. If you have understated your tax liability by (a) deliberately introducing a tax risk factor and then (b) wrongly assessing yourself to fall on the right side of it, the fact that tax risk factors arise naturally does not protect you from opprobrium. The risk factor in question was artificial. It would not have been there were it not for the deliberate prior act of tax risk creation.

It is for this reason that I have always thought the business sector’s constant calls for “certainty” in tax law to be deeply bogus. In a world of infinite possibility but finite tax law, there will never be certainty of treatment in all circumstances, and tax law is no more to blame for seeking to apply its distinctions to commercial reality as commercial reality is to blame for coming too close to those distinctions. No, what the corporate sector seems to me to be calling for when it calls for “certainty” in tax law is something more specific than that. The rhetoric about “certainty” always seems to me to be specifically about certainty in tax planning. The business sector likes the savings that tax planning delivers but doesn’t like the risk of those savings being challenged by HMRC and found not to exist.

I am happy to announce that I feel richly vindicated in this scepticism about the business sector’s habitual rhetoric on certainty by Jason Piper’s quietly radical recent paper Certainty in Tax, which acknowledges that aggressive tax avoidance is an extreme form of risk-creation, and that any deliberate creation of risk for the public exchequer is “open to censure”. What struck me most about Jason’s excellent paper, since he was writing in his formal capacity with the Association of Chartered Certified Accountants, was this sentence from its conclusion:

Tax systems should be designed so as to minimise unfair outcomes – but if the ‘fairness’ of tax certainty led to economic stagnation then that would be too high a price to pay.

If business sector organisations are starting to acknowledge that deliberate risk-creation is a necessary component of the tax savings that business is accustomed to obtaining, are they starting to tone down their rhetoric about the absolute desirability of “certainty”? It would appear so. This is a far more startling development than Jason’s measured and unassuming prose would suggest.

There is one aspect of Jason’s paper which (if he will forgive me for saying so) falls short of giving credit where credit is due, i.e. to the UK government. The paper is framed as a series of recommendations for policy-makers, but in this respect policy-makers are way ahead of business organisations. UK tax policies like DOTAS, Follower Notices, Accelerated Payments, and the freshly proposed GAAR penalty regime, are all recognition in practice that tax avoidance is a species of risk-creation, and we of the tax commentariat are only just catching up by having this debate about how risk and tax avoidance relate to each other on a theoretical level.

Abuse by the state

A key issue which Iain raises in his commentary is the question of how useful the risk-mining analysis is in the context of abuse of the international corporate tax system by multinational enterprises. I readily accept that in many cases the risk-mining analysis will only be half the story in this context. There is always more than one jurisdiction involved with double-non-taxation, and while there might be risk mining going on in both jurisdictions, there might equally be risk-mining going on in one jurisdiction and deliberate exercise of the state power to not tax going on in the other. There would be little point in Amazon risk-mining the UK exchequer from Luxembourg, for example, if Luxembourg was operating a proper domestic corporate income tax regime so as to tax the booty.

This latter category of tax abuse – states exercising their power to not tax in such a way as amounts to an abuse – is not one addressed in my risk-mining paper; my paper is about circumstances where the taxpayer is the abuser and it simply assumes that tax havens are available for the purposes of international planning. In order to theorise international tax abuse fully, both taxpayers and states need to be considered in their role as abusers.

Indeed when theorising abuse by the taxpayer, it is probably for the best to acknowledge that the state can be the abuser too, as a matter of general principle, so as to avoid giving the impression of having taken sides. I suspect I may have failed in this regard. Or, at least, if I had acknowledged the role of the state as abuser I might have attracted a slightly less hostile critique from Michael O’Connor, who raises in his guest-post below two very interesting questions about my “risk-mining” analysis, the answer to both of which is “no, that is not risk-mining by the taxpayer, that is (or may be) abuse by the state”.

Before discussing those questions I should emphasise that Michael and I are talking at complete cross purposes. When he talks about tax risk, he is talking about the risk of HMRC challenge, and he focuses on circumstances where HMRC challenges filing positions which are legally correct. I adopt for the purpose of my paper a conception of tax risk which, frustratingly from the perspective of being able to have a coherent debate, excludes the very category that Michael is most interested in: I am talking about the risk of an HMRC challenge having the outcome that the tax liability turns out to be greater than the one claimed in the filing position. I am, in other words, talking about the risk of successful HMRC challenge. “It is not meaningful to describe a taxpayer making a filing that is correct in law as creating tax risk, let alone deliberately so,” says Michael, and I completely agree. That would fall outside the creation of tax risk as I characterise it for the purposes of my paper.

I would urge Michael to re-read the first three paragraphs of my paper carefully, which I hope make this absolutely clear. I fear that he has been led to misunderstand my entire argument by taking the flow-chart on p.15 as his entry-point. The flow-chart exists only to make the point that wrong filing positions are wrong ab initio, rather than (as is sometimes suggested) being made wrong by HMRC challenge. The significance of this is that, where wrong filing positions go unchallenged, tax which is legally payable is lost to the exchequer. Michael himself says: “when David talks about Exchequer risk he can only mean the risk that an incorrect treatment in law will not be detected by HMRC”. Indeed – and that is what my flow-chart illustrates!

Another misunderstanding between us is the one I try to forestall at the outset of this post. Risk-mining is about the prior structuring that you implement with a view to taking positions as at filing, and not about the positions you take as at filing per se. I am not saying that taxpayers can’t take filing positions that HMRC might challenge, or that they have to adopt filing positions which maximise the amount of tax payable, or that they have to eschew reliefs unless it is 100% certain they are available, or anything like that. Still less am I saying that taxpayers have a positive obligation to minimise tax risk. This is about drawing a distinction between “legitimate tax planning” and “tax avoidance” at the tax planning stage, and it is not saying anything at all about the positions you might take at the self-assessment stage except to assume that, if you have structured for a tax saving at the prior tax planning stage, you are going to proceed to claim it at the subsequent self-assessment stage.

There are, however, interesting questions raised in Michael’s post notwithstanding these misunderstandings. The principal question is the one raised by the difference between our usages of the term “tax risk” i.e. is it “tax avoidance” where the taxpayer takes steps to minimise tax which introduce a risk of unsuccessful HMRC challenge? My answer to this is a resounding “no”. Where HMRC is known to adopt a position which is wrong in law, having the consequence that planning which does not create a risk of successful HMRC challenge nonetheless creates a risk of HMRC challenge, that is an abuse by HMRC and not by the taxpayer.

The other question which he seems to me to be raising is the question of whether it is an abuse by taxpayers to exploit strategies which are widely considered to be abusive, but which are known to be legally effective, so that no risk of successful HMRC challenge is introduced when those strategies are adopted. Again, my answer to this is another resounding “no”. If a loophole is knowingly left open, it becomes deliberate policy. The continued existence of the loophole may be an abuse by the state, but once it is known to succeed the use of it ceases to be risk-mining by the taxpayer.

Editor’s Note: Follow @_DavidQuentin on twitter. And here‘s a link to his original ‘Risk Mining the Public Exchequer’ Post.

13 thoughts on “Risk-mining the public exchequer: some follow-up points. Guest post by David Quentin

  1. Interesting post. The documentary record point that David refers to caught my eye. Regan and Rostain’s US Condidence Games book showed how accountants in the US deliberately managed the documentary record (e.g. By stripping files of marketing material on tax schemes).

  2. David – I agree that clearer definitions and concepts are needed in the murky zone between legitimate tax planning and illegitimate tax avoidance. The current situation is not satisfactory; ‘everybody knows’ that Amagooglefacebucks are great big tax avoiders, except that the tax rules (at least pre-Google tax) appear to say they are not.

    I don’t think your risk-based ‘guilty-even-if-they-might-not-be’ formulation is satisfactory, from a principle point of view — but also because when I try to apply it as a thought experiment to the big name examples I think it comes unstuck.

    As your discussion with Iain highlights this model depends heavily on there being a low tax risk ‘form the transaction or structure would otherwise have taken’ to compare to.

    In the case of the big IP driven businesses, it is not obvious to me what this form would have been. Amazon is fundamentally different from the retailers that came before it, Facebook and Google to the advertising businesses, and Starbucks, to a lesser extent, to coffee shops (which didn’t charge £5 a cup, but then didn’t expect people to install themselves at a table all afternoon).

    At the heart of public controversy over Amazon and Google, for example is that they pay less tax than a conventional bookseller or advertiser would in the place where its customers are, because they create value through clever computer algorithms, whose IP can be parked anywhere. In doing so they create tax risk, because they are not running a conventional business where the locations and margins expected for different parts of the value chain are well established.

    However this seems to me to be core to the business model of Amazon and Google, not a tax driven add-on (although I’m sure they also took tax advice along the way). I struggle to imagine the comparator low-tax-risk version of these companies that your model requires – i.e. what is your low-tax-risk version of Amazon that is still a global business with national sites all driven by the same technology for automated Recommendations, Lists, Marketplace, Kindle downloads, Reviews & inventory management etc…Similarly for Google, what would be the low tax risk structure for monetising Search through Ad-Words on a global basis?

    The tax risk (and controversy) seems inherent in developing these new business models, which run ahead of those our tax systems were designed for, and divorce the location of value creation from sales. Does your model therefore imply that they should ‘just not do it’ at all?

  3. Apologies to David for anything that could be interpreted as hostility. And indeed as misunderstanding!

    The shortest point in immediate reply is to reiterate my view that avoidance cannot be inferred from the taking of a position that has anything less than maximum certainty. I do not think it is right to “DRAW THE LINE” HERE bearing in mind some of the different possible reasons for uncertainty. It doesn’t matter whether we are talking about the thinking prior to filing or the filing itself.

    As to misunderstanding the concept of creation of tax risk, the shortest point is to note that David’s reply says

    “It is not meaningful to describe a taxpayer making a filing that is correct in law as creating tax risk, let alone deliberately so,” says Michael, and I completely agree. That would fall outside the creation of tax risk as I characterise it for the purposes of my paper.

    Yet as the right-hand path in David’s flow chart shows, filings that are defined by David as wrong ab initio – and thus that have resulted from the deliberate creation of tax risk – clearly do include filings that are correct in law.

  4. “At the heart of public controversy over Amazon…”

    Poor old Amazon. I do feel sorry for it sometimes. A business that doesn’t actually make much in the way of worldwide profits (I think it actually made a loss in 2013) but has now entered folklore as an evil tax avoider which should be paying billions in tax to the UK.

    So an overseas company which exports to the UK should be paying tax in the UK and in the meantime UK companies that export overseas should be paying tax….er…in the UK?

  5. To argue – as you and others do – that because XCo makes a consolidated loss it’s not avoiding tax in YState is, in effect, to say that the general body of taxpayers in YState should subsidise XCo’s (loss making) operations in ZState. I don’t find that argument persuasive, I have to say.

  6. So when Starbucks makes profits worldwide, it ‘must be up to something’ because it makes losses in the UK but when Amazon makes losses worldwide it ‘must be up to something’ because it (surely) makes profits in the UK?

    You are really claiming that our starting assumption should be that a company that makes consolidated world-wide losses must be making UK profits?

    Perhaps then, you could state the amount of profit XCo (which I assume to be Amazon) has made in YState (which I assume to be the UK). Because if you are to claim that the general body of taxpayers in the UK is subsidising Amazon that is what you would need to show.

  7. I’m not saying any of those things. I am just addressing your general thesis that because XCo makes a consolidated loss it (apparently) follows that it is not making a profit anywhere. That seems to me to be, as a matter of logic, wrong.

  8. Fair enough, it is not logical to assume that it is not making a profit anywhere. But your assumption is that citizens in Ystate are subsidising Xco’s operations in Zstate. In effect saying that Xco MUST be making a profit somewhere and assuming that it’s in Ystate. Is that any more logical?

  9. That’s closer but still not right. You said, in effect, that because Amazon makes a consolidated loss it follows that we can’t complain that it doesn’t pay tax here. I said, in effect, that implicit in your statement is an assumption that it wasn’t making a profit anywhere (because otherwise the taxpayers of the YState are subsidising XCo’s activities in ZState). But it’s not implicit in my answer that XCo’s activities are making a profit somewhere.

  10. Sorry to labour this point……

    “But it’s not implicit in my answer that it’s making a profit somewhere.”

    But you do say that:

    “To argue – as you and others do – that because XCo makes a consolidated loss it’s not avoiding tax in YState is, in effect, to say that the general body of taxpayers in YState should subsidise XCo’s (loss making) operations in ZState.”

    So if it isn’t implicit in your answer that XCo is making a profit somewhere, what’s the subsidy that taxpayers in YState are providing?

  11. Not sure I have anything more to say than is in my last comment. But we do seem now, at least, to be agreeing that the fact (if fact it is) that Amazon makes a consolidated loss does not necessarily mean that it is not diverting profits from the UK (or any other state in which it operates).

  12. It’s getting hard to keep up with all the tax related blogs and even harder to find a way of commenting on them. Too many posts, too little time, and how to begin?
    To explain. Jolyon puts some words here on DPT, Richard Murphy picks it up but comments on his own blog, so there are now at least two threads, with Jolyon writing on both. David writes on Risk Mining, Andrew Jackson comments on his own blog, I reply to both of them; Michael then posts here on Jolyon’s blog, whereupon David replies and includes comments on my post, as well as on Jason Piper’s post. His “Certainty” sits on the ACCA site where there does not appear to be a comments facility, and my comments on it may have to go here as well.
    So I think this post will be on the long side, but it’s really three posts in one, so you can break off after each one… I’ve had to set up some signposting that may seem a little obvious but I hope it keeps me on track.
    RISK MIN(IMIS)(ING (Post 1)
    David has obviously addressed what he thinks are the misunderstandings of his position but I think Michael has omitted some “real world” considerations and comes to a conclusion on Exchequer Risk that I think needs expanded for the sake of completeness.
    There are several points:
    1. In theory, of course, “taxpayer risk is in principle a function only of the likelihood of the taxpayer being wrong in law”. But, to me, in the real world “in principle” has no practical meaning. Such a risk is only likely to ever materialise if HMRC challenges (rightly or wrongly) the taxpayer’s return. There is then the consequential money risk of the challenge succeding. I think it unlikely such a risk will arise in any other way, but would be interested to hear if others disagree. If HMRC is unable or unwilling to challenge (e.g. lack of resources) then I cannot see how there will be a test of the application of the law to the transaction(s) in question.
    2. I disagree on some of the implications of Rebecca’s recent post. I think her post was not about how the “law can produce wide variations in tax burden on essentially the same income of the same person depending on which part of ‘the law’ is thought appropriate to apply.” I thought it was about the different tax treatment of different legal persons – employee, self-employed, limited company – and the ‘ethics/morality/defendibilty’ of advising on a change of taxable legal person.
    3. The risk of challenge in Rebecca’s cases is surely not based on the correct legal position. For her simple cases the law seems quite clear on how you compute taxable income for each of those three legal persons. The risk and uncertainty must be whether the facts in each case support the claim that there is an employee, self-employed, limited company engaged in the activities that give rise to taxable income.
    4. But in each of these cases I think David has already removed them from his flow chart because I think they fall within his exemption in para 33 – “If you do something in pursuit of your commercial objectives and it gives rise to tax risk, you are not in the “avoidance” zone.” Clearly it will depend on the facts, but I think it could be easily argued that both sets of planning have genuine commercial aspects; maximising the return on labour and capital involved, or taking on the commercial risks of no contracts, or avoiding personal liability.
    5. As mentioned above, I believe that for all practical purposes the risk to the taxpayer is that of HMRC challenge. If unsuccessful, then this demonstrates there was no Exchequer risk and the “avoidance” succeeds. I think there must also be a risk a taxpayer accepts an incorrect HMRC challenge or incorrect view of the law (e.g. in its guidance). We might deem that “taxpayer risk”. But, equally, if there is no HMRC challenge then there must be some tax at risk to the Exchequer. To believe otherwise is to assume that HMRC challenges each and every potentially risky return, and ones that are not challenged are always correct. I think HMRC operates a policy of risk assessment, with declining staff numbers, so it cannot ever deliver that ideal.
    6. Thanks to David for expanding on some of his earlier comments, e.g. on where, when and how tax risk is created. Also thanks to Maya for setting more clearly than I did the issue that some new forms of business model are sui generis and it’s hard to think of a “traditional” alternative.
    7. But, like Michael, I’m still not convinced by the decision box I’ve previously called a Schrodinger Box – “is the filing position correct as a matter of law”. The reason I’m not convinced is, as David sets out in his original paper’s para 3: “As at the point of filing (i.e. after the relevant taxpayer behaviour has taken place but before the outcome has eventuated) there is no way to determine whether or not the tax liability is understated.” So nobody can, at the point of filing, navigate their way through that decision box. It is simply not possible to say, ab initio, that by accepting and acting on tax advice the taxpayer has filed an incorrect return. This is regardless of whether that advice, under challenge, does or does not eventually prove to be effective or ineffective avoidance. So I think this view fits with Michael’s revised wording of “genuinely believed”.
    9. But I do agree with David’s point that “The principal question is the one raised by the difference between our usages of the term “tax risk” i.e. is it “tax avoidance” where the taxpayer takes steps to minimise tax which introduce a risk of unsuccessful HMRC challenge? My answer to this is a resounding “no”. I’d go a little further and raise again that anomalous animal – ‘successful avoidance’. What is the status of steps taken when either HMRC’s view is not known, or which challenges HMRC’s long accepted views? Does it start off as the caterpillar of “avoidance” but then metamorphise into the butterfly of acceptable “planning?
    10. Should we echo Lord Hoffmann: “Tax avoidance in the sense of transactions successfully structured to avoid a tax which Parliament intended to impose should be a contradiction in terms. The only way in which Parliament can express an intention to impose a tax is by a statute which means that such a tax is to be imposed. If that is what Parliament means, the courts should be trusted to give effect to its intention. Any other approach will lead us into dangerous and unpredictable territory.”
    ‘Tax Avoidance’ (2005) British Tax Review, 2, 197, p.206).
    11. Like David I’m not sure if this really is something that businesses find as attractive close up as they might initially profess. Jason suggests larger businesses want certainty but smaller ones want simplicity. I’m not so sure. Smaller businesses might want certainty because they can’t adapt to change as easily as larger firms and they will manage (somehow) to cope with complexity – has anyone tried administering PAYE/NIC for a small payroll?
    12. There are a lot more things that could be discussed from Jason’s paper but I think a few need comment, either because they echo Michaels post, or make large claims. For instance, “Identical economic activities should produce identical tax outcomes.” But this ignores the legal form in which these activities are undertaken – for instance, would it be better if the tax system were simpler, and more certain, and, for example, looked through incorporation for businesses with low turnovers (say the VAT threshold?).
    13. I also find it very surprising that nobody has yet commented on what, from a UK perspective, lacks virtually any evidence, although I accept that in some other fiscs this may not be the case. This is the suggestion that there is uncertainty because of the risk that tax officials may take bribes and then equating that action with enforcing “unreasonable “demands on a taxpayer. And this is followed by the suggestion of “deals”. I think all the experience in the UK and probably all G20 countries is that is it taxpayers and, on a few occasion, even their advisers, who act in a criminal way. Tax officials’ criminality is usually extended to obtaining fraudulent enrichment of themselves, friends and families. Perhaps Jason can say over what ranage of countries an ACCA paper extends?
    14. And I would suggest that the uncertainty caused by “subjectivity” is not unique to tax law. As Jason notes earlier, “Corporation taxes are typically based on an adjusted value of published accounting profit, but that underlying published number may rely on subjective valuations such as provisions, accruals and prepayments.” Subjectivity is, in many ways, the ghost in the machine.
    15. Finally, I have to take issue with a view that suggests “Tax systems should be designed so as to reduce the possible incidence of such dilemmas by allowing business to pursue comfortably the course that offers the greatest overall benefit to society.” I may be misreading this, for which I apologise in advance. But it seems this is capable of being read as suggesting we let businesses decide what courses of action they want to take in the belief this results in the greatest overall benefit.
    16. Finally, on a smaller point, is the analysis of risk or certainty any different for PAYE taxpayers who do not self-assess/directly pay their tax liability? A self-assessment stands good unless challenged; claims have to be actioned. Are there different analyses that apply to employees who make claims for reliefs or expenses which reduce their income from employment and whose effect is usually given by way of a repayment? Or can we say that a “filing position” applies to making a claim or asking for a relief?

  13. Hello Iain,
    Just to quickly respond on the housekeeping (much as I’d love to I don’t have enough hours in the day to reply just yet on the interesting bits; maybe later), the Certainty paper sits on ACCA’s Technical Activities pages, with it’s own homepage accessible via http://bit.ly//TaxCertainty And yes, it is meant to have global application, not just UK (ACCA is after all the global body for professional accountants). But I’m afraid there isn’t a comments facility there either; for that you’d need to head to the blog – which went up on 1 December, and opens up another whole field for debate (or would have done had it not got lost in the Autumn Statement circus and hullabaloo) http://blogs.accaglobal.com/2014/12/01/tax-is-difficult/

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