The Worshipful Company of Tax Advisers

“A history of tax avoidance – an overview from pre-history to the present day”

29 October 2024

On 29 October the Worshipful Company of Tax Advisers History of Tax group was delighted to welcome David Goldberg KC to give an overview of the history of tax avoidance.

David is one of the greatest authorities on tax and gave us a masterful and wide-ranging review of the history of tax avoidance, which he delivered with a delightful lightness of touch, interspersed with some personal stories.

David’s opening position was not to define tax avoidance. Whilst he was clear what he did not consider to be tax avoidance (for example evasion or reducing a liability through an innocent mistake), in his view tax avoidance is hard to describe but recognisable when it is present. However, there are different views of tax avoidance, and the concept keeps evolving.

Evolution was a theme that ran through David’s talk and his review of tax avoidance took us back to the earliest taxes in ancient Egypt which had few rules and therefore offered little scope for avoidance. Over time taxes required more definitions and more rules which resulted in a tension between taxpayers working within the rules and tax authorities adopting a broader view of the rules.

David deftly took us through a review of the last 50 years of tax avoidance cases, demonstrating how the UK courts had evolved the approach to tax avoidance from a rigorous and strict interpretation of legislation in the 1940s, to the current position where courts pay scant attention to the structure of legislation and reach instinctive conclusions on the basis of morality. This, he argued, was similar to the approach of a looser interpretation adopted by the US courts in the 1940s.

As the approach taken by the courts changed over time, the approach of the legislature also changed, with an increasing focus on targeted anti avoidance measures and the little used general anti abuse rule, coupled with greater powers and increased penalties for HMRC. He concluded his review with the impact of BEPS on the UK tax system introducing the multinational top up tax - a demonstration of overseas intervention in the UK tax system.

David must be thanked for a fascinating presentation.

The next History of Tax event is on 18 February 2025, when Carrie de Silva will give a talk on glass tax.

Caroline Turnball-Hall