Taxation: Avoidance

Lord Forsyth of Drumlean Excerpts

Wednesday 20th October 2010 Lords Chamber

[Lord Sassoon]

My Lords, it may be helpful if I make it clear that the £900 million of additional money that HMRC will have to use is principally to tackle tax evasion. We are talking about avoidance this afternoon, but the £7 billion will principally be from money that is not avoided but evaded.

[Lord Forsyth of Drumlean]

My Lords, would my noble friend not agree that how we use language is important? There is a big difference between tax evasion and tax avoidance. After all, everyone with an ISA is involved in tax avoidance. It is extremely important that we make clear the distinction between that which is legal and that which is illegal.

[Lord Sassoon]

My Lords, I am grateful to my noble friend, who has made the position absolutely clear. Minimising tax payments is perfectly reasonable. Where it gets into the avoidance on which HMRC needs to focus is where people have minimised their tax payments in a way that HMRC believes to be contrary to the way in which Parliament intended the tax laws to operate.