Tax: Aggressive Tax Avoidance

Lord McFall of Alcluith Excerpts

Wednesday 9th July 2014 Lords Chamber

[Lord Newby]

The noble and learned Lord points to a very important problem. There are over 1,000 tax allowances, all of which have been introduced individually for very good economic development reasons. The problem is that they are now very complicated. Some tax advisers have been extremely creative at finding ways to use these allowances, which were developed for perfectly good reasons, to enable people to avoid their tax.

[Lord McFall of Alcluith (Lab)]

My Lords, is the term “aggressive tax avoidance” not just semantics? Tax avoidance is tax avoidance, whether aggressive or not. By doing this we are encouraging complexity, which is to the benefit of sharp-witted accountants and lawyers. Tolley’s Tax Guide is now 20,000 pages long. I suggest that the Minister should have two ambitions: first, to have the tax book the same length as War and Peace at 1,200 pages. Secondly, he should take up the suggestion of the noble Lord who said that we need to ensure these tax-avoidance schemes are referred to the Treasury first of all to determine whether they are tax avoidance. That would eliminate the complexity.