Rapid responses

The tax debate

[Re: Firms call for tax breaks in infrastructure, Monday]

I would happily support an overhaul of the tax system to try and bring better balance to, and a fairer sharing of, the burden of paying our country’s bills. However, the vilification of anyone who legally manages their tax affairs is worrying. The avoidance of tax has now become a moral crime against the state. Talk of people using “tax loopholes” to avoid payments sounds far worse than people “managing their tax affairs according to the law”. Tax laws are written by experts, and are part of the UK’s economic policy. The debate ignores the benefits that the tax laws were designed to bring to the country – such as the crucial investment in infrastructure that this article refers to. It overlooks that tax affects where people will choose to keep and spend their money. There is also a failure to understand that company directors and professional advisors would be in breach of their duties if they did not act in the best interests of their clients and companies. If the UK takes an isolationist and moralising stance on tax law, there is a risk that shareholders, and other investors who are not subject to UK tax, will move away from UK companies and investments. But, there is a more sinister risk: that financial and legal certainty will be sacrificed in favour of whatever moral crusade is popular at the time.

Christopher Parr, partner, City & Westminster Corporate Finance.

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