Tax avoiders like Jimmy Carr have nothing to fear from Osborne

The Chancellor's plans will allow the vast majority of tax avoidance to continue uninterrupted.

"I regard tax evasion and indeed aggressive tax avoidance as morally repugnant." So said George Osborne in his Budget speech in March.  I hope he meant it. The trouble is he has not evidenced it.

Last week, the government started a consultation on the introduction of what is, in effect, the tax anti-avoidance rule recommended  by Graham Aaranson QC as a result of a review Osborne commissioned in 2010. The government says that this is a general anti-avoidance rule. The trouble is that is precisely what it isn’t.

I can say that with confidence. Aaranson himself said in his report:

I have concluded that introducing a broad spectrum general anti-avoidance rule would not be beneficial for the UK tax system. 

In other words, what Aaranson suggested was not a general anti-avoidance rule. He did instead propose:

[I]ntroducing a moderate rule which does not apply to responsible tax planning, and is instead targeted at abusive arrangements, would be beneficial for the UK tax system.

The trouble is that his plan – now adopted almost wholesale by the government - is intended as a result to only attack what he described as the "most egregious" tax abuse schemes. I met with Aaranson during his review process. What he clearly meant was that his intention was that the vast majority of tax planning should continue uninterrupted. Indeed, he says in his report that a broadly based general anti-avoidance rule

Would carry a real risk of undermining the ability of business and individuals to carry out sensible and responsible tax planning.  Such tax planning is an entirely appropriate response to the complexities of a tax system such as the UK’s. 

May would disagree. He was also worried that such a scheme:

Would also inevitably in practice give discretionary power to HMRC who would effectively become the arbiter of the limits of responsible tax planning. 

To make sure that didn’t happen he wanted representatives of the tax profession – dedicated almost solely to tax avoidance as it is – to decide which schemes were acceptable or not. That’s like putting the foxes in charge of the hen house.

That’s why I doubt that Osborne is committed to tackling tax avoidance. And it is why I have always supported a general anti-avoidance principle in the UK, and not a general anti-avoidance rule. As a tax avoidance specialist said in the Times (£) today:

It’s a game of cat and mouse. The revenue closes one scheme, we find a way round it.

That is what happens when you have a rule. A principle is something quite different. It looks at intent. It is not about box ticking, as rules are (which is why they are so easy to get round - general anti-avoidance rules included). It is about looking at what you did and using that evidence to assess on the balance of probabilities what your intentions were.

So, if, for example, you arranged your affairs so that you provided your services via a series of companies, one of which happened to be in Jersey which lent you back the tax free income it had received so that you appeared to have no legal requirement to pay tax in a way that a more commercially obvious arrangement might have given rise to then it would be reasonable for someone – and I think that someone should be HM Revenue & Customs – to decide you’re tax avoiding. And if that’s what they decide then if we had a general anti-avoidance principle they could say that the scheme was abusive and take the obvious step of simply ignoring all the steps put into the arrangement likely to be solely or mainly included to save tax. They’d then tax the commercial substance of the deal and not the artificial arrangement put in place solely to avoid tax.

Of course any such HMRC ruling would be subject to appeal to the courts, but the taxpayer would have to show why the scheme was not tax avoidance: the burden of proof would be on them.

This changes the way we assess tax in the UK, without doubt, and in a way Aaranson and Osborne clearly do not intend. But even the Times said today in its leader:

The British tax system is unfair. It charges the vast majority of people the basic rate of income tax, and expects them to pay. It asks a minority to pay higher rates of tax, and then invites them to avoid it.

That is true. A general anti-avoidance principle rather than a general anti-avoidance rule would radically change this and would provide the power needed to deliver a fair tax system in the UK. That’s why Michael Meacher MP is tabling a private member’s bill to introduce a general anti-avoidance principle into UK tax law this week.

It’s what the Times wants. It’s what the UK needs. But will Osborne find the moral will to back it?

Comedian Jimmy Carr channels proceeds from DVD sales and television appearances through a Jersey-based company. Photograph: Getty Images.

Richard Murphy is an adviser to the Tax Justice Network and the TUC on taxation and economic issues. He is also the director of Tax Research LLP.

A woman in an Indian surrogacy hostel. Photo: Getty
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The Handmaid's Tale has already come true - just not for white western women

Why, if the fate of the fictional Offred is so horrifying, is the fate of real-life women in surrogacy hostels causing so little outrage?

When anti-choice Republican Justin Humphrey referred to pregnant women as “hosts”, I found myself wondering, not for the first time, whether everything had got “a bit Handmaid’s Tale.”

I’m not alone in having had this thought. Since Donald Trump won the US election, sales of Margaret Atwood’s dystopian novel have spiked and we’ve seen a plethora of articles telling us how “eerily relevant [it] is to our current political landscape.” In an interview during Cuba’s international book fair, Atwood herself said she believes the recent “bubbling up” of regressive attitudes towards women is linked to The Handmaid’s Tale’s current success: “It’s back to 17th-century puritan values of New England at that time in which women were pretty low on the hierarchy … you can think you are being a liberal democracy but then — bang — you’re Hitler’s Germany.”

Scary stuff. Still, at least most present-day readers can reassure themselves that they’ve not arrived in the Republic of Gilead just yet.

For those who have not yet read it, The Handmaid’s Tale tells the story of Offred, who lives under a theocratic dictatorship in what used to be the United States of America. White, middle-class and college-educated, Offred once enjoyed a significant degree of privilege, but now belongs to a class of women whose sole purpose is to gestate offspring for high-status couples. Much of the shock value of the story comes from the contrast between Offred’s former life – in which she had a name of her own - and her present-day existence. If this can happen to someone like Offred, it is suggested, surely it can happen to any of us.

Or so that is what a white, middle-class reader – a reader like me – might tell herself. Recently I’ve started to wonder whether that’s strictly true. It can be reassuring to stick to one narrative, one type of baddie – the religious puritan, the pussy-grabbing president, the woman-hating Right. But what if it’s more complicated than that? There’s something about the current wallowing in Atwood’s vision that strikes me as, if not self-indulgent, then at the very least naive.

In 1985, the same year The Handmaid’s Tale was published, Gina Correa published The Mother Machine. This was not a work of dystopian fiction, but a feminist analysis of the impact of reproductive technologies on women’s liberties. Even so, there are times when it sounds positively Handmaid’s Tale-esque:

“Once embryo transfer technology is developed, the surrogate industry could look for breeders – not only in poverty-stricken parts of the United States, but in the Third World as well. There, perhaps, one tenth of the current fee could be paid to women”

Perhaps, at the time her book was written, Correa’s imaginings sounded every bit as dark and outlandish as Atwood’s. And yet she has been proved right. Today there are parts of the world in which renting the womb of a poor woman is indeed ten times cheaper than in the US. The choice of wealthy white couples to implant embryos in the bodies of brown women is seen, not as colonialist exploitation, but as a neutral consumer choice. I can’t help wondering why, if the fate of the fictional Offred is so horrifying to western feminists today, the fate of real-life women in surrogacy hostels is causing so little outrage.

I suppose the main argument of these feminists would be that real-life women choose to be surrogates, whereas Offred does not. But is the distinction so clear? If Offred refuses to work as a handmaid, she may be sent to the Colonies, where life expectancy is short. Yet even this is a choice of sorts. As she herself notes, “nothing is going on here that I haven't signed up for. There wasn't a lot of choice but there was some, and this is what I chose.” In the real world, grinding poverty drives women of colour to gestate the babies of the wealthy. As one Indian surrogate tells interviewer Seemi Pasha, “Why would I be a surrogate for someone else if I don't need the money? Why would I make myself go through this pain?"

None of the feminists who expressed shock at Justin Humphrey referring to pregnant women as “hosts” have, as far as I am aware, expressed the same horror at surrogacy agencies using the exact same term. As Dorothy Roberts wrote in Killing The Black Body, the notion of reproductive liberty remains “primarily concerned with the interests of white, middle-class women” and  “focused on the right to abortion.” The right not just to decide if and when to have children, but to have children of one’s own – something women of colour have frequently been denied – can be of little interest of those who have never really feared losing it (hence the cloth-eared response of many white women to Beyoncè’s Grammy performance).

As Roberts notes, “reproductive liberty must encompass more than the protection of an individual woman’s choice to end her pregnancy”:

“It must encompass the full range of procreative activities, including the ability to bear a child, and it must acknowledge that we make reproductive decisions within a social context, including inequalities of wealth and power. Reproductive freedom is a matter of social justice, not individual choice.”

It’s easy to mock the pretensions to pro-life piety of a pussy-grabbing president. But what about the white liberal left’s insistence that criticising the global trade in sexual and gestational services is “telling a women what she can and cannot do with her body” and as such is illiberal and wrong? “Individual choice” can be every bit as much of a false, woman-hating god as the one worshipped by the likes of Humphrey and Trump.

One of the most distressing scenes in The Handmaid’s Tale takes place when Janine/Ofwarren has just given birth and has her child taken from her:

“We stand between Janine and the bed, so she won’t have to see this. Someone gives her a drink of grape juice. I hope there’s wine in it, she’s still having the pains, for the afterbirth, she’s crying helplessly, burnt-out miserable tears.”

Right now there are women suffering in just this way. Only they’re probably not white, nor middle-class, nor sitting in a twee white bedroom in Middle America. Oh, and they’re not fictional, either.

The dystopian predictions of 1985 have already come true. It’s just that women like me didn’t notice until we started to be called “hosts”, too.

Glosswitch is a feminist mother of three who works in publishing.