Pension tax relief and Isas are ‘never tax avoidance’

Added 29th September 2016

Paying into an Isa or getting pension tax relief can never be tax avoidance, according to Richard Murphy, an economist and long-standing active member of the Tax Justice Network.

Pension tax relief and Isas are ‘never tax avoidance’

Murphy was speaking yesterday at an evening debate held in London by the UK’s Revenue Bar Association, for barristers specialising in taxation cases, on the motions of penalising tax avoiders and whether enablers of tax avoidance should be penalised.

In his blog, Murphy said his own definition of tax avoidance was as follows: “An arrangement that is intended to reduce or eliminate a liability to one or more taxes in a way that could not have been anticipated by any reasonable legislator and whether or not the law in question specifically relates to tax or not.”

Some of the others present found this broadly acceptable, he said, but he, Alexi Moustrous of The Times, and Graham Aaranson QC who all spoke for the imposition of penalties, lost both motions, the second more heavily than the first.

He added in his blog that he wanted to be clear that his definition of tax avoidance “means that paying money into an Isa and getting pension tax relief can never be tax avoidance.

“I say this because an MP suggested these may be tax avoidance in my presence the other day, and that is wrong because the law deliberately intended that those reliefs be provided and so no tax can have been avoided.”


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Tax: avoidance vs evasion

There still seems to be a tendency to lump avoidance together with evasion. There is a substantial difference, even though HMRC have, in the past, tried to pretend they are one and the same.

Posted by: John Allan, 03 Oct 2016

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Mark Battersby is editor of International Adviser. He is also programme director for International Adviser events in strategic expat locations around the world, and its flagship FundLinks conference in London. Mark joined Last Word Media in February 2012, having previously worked at Citywire, Interactive Investor International, and FT Business.


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