Risk-Mining the Public Exchequer

David Quentin

Abstract


Tax avoidance is commonly theorised on the hypothesis that, in any specific instance of it, its effectiveness or ineffectiveness is determinate, whereas in the vast majority of instances it succeeds by default without being subject to forensic scrutiny. This article offers a new theory of tax avoidance which treats indeterminacy of outcome, as at implementation, as being of its essence.  It proceeds from existing tax industry discourse regarding tax risk management, and shows (using the case study of Amazon’s former UK/Luxembourg tax structuring) how tax avoidance is a discrete category of tax risk management with a determinate institutional genealogy. It proceeds to consider how (on a systemic level) such behaviour yields unwarranted financial transfers out of the public exchequer, and does so notwithstanding the adequacy of tax risk mitigation in any given instance.  It concludes with comments on the utility of the theory.


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References


CASES CITED

Brooke v Bool [1928] 2 KB 578

Cosmetic Warriors Ltd & Anor v amazon.co.uk Ltd & Anor [2014] EWHC 181 (Ch)

Duke of Westminster v Commissioners of Inland Revenue 19 TC 490

Flanagan and others v Revenue and Customs Commissioners [2014] SFTD 881; [2014] UKFTT 175 (TC)

Peterson Farms Inc v C&M Farming Ltd [2004] 1 Lloyd’s rep 603

WT Ramsay Ltd v IRC [1979] STC 582

LEGISLATION CITED

Part 7 Finance Act 2004

Schedule 43C Finance Act 2013

Part 4 Finance Act 2014

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