Free Jimmy Carr

As I don't believe that politicians are on the whole particularly intelligent, I reckon they're lobbied for wording etc.

It is highly unlikely that you would have any infrastructure supported on a 1% tax rate and it has not worked in Greece where tax is heavily evaded.

I am all for low taxation which is why I would look to the Hong Kong model as it has been hugely successful in my view.

Small Government and Low Taxation.
It's the only way forward.

I just wish the masses would wake up.

I should perhaps add that the problem HMRC face is that they can only challenge on the basis of the wording of the law and not Parliament's intentions behind it.

Scose - aye, but it's the Parliamentary draftsmen that carry the can

+1

Don't get me wrong, I understand the distinction, but it should still fall foul of the rules as they currently stand. They are specifically designed to catch things like this without making any individual step illegal.

If this goes to court and HMRC lose (loose), they'll most likely just change the rules to cover situations such as these.

However, in this case if it did go to court I would imagine that HMRC would win.

They have clamped down on it but they cannot shut down retrospectively so people who set up before the court decision can carry on as long as they like

It's a nonsensical system worthy of much lulz

Actually, it's not just based on law as in purely the clauses in the relevant legislation.

There is also a vast body of case law to be considered. I think that this was the point in MacNiven - the law was reinterpreted by the judges in that case, but from then on that has established the new practice.

I'm in favour of lower taxes, smaller government - and not just for economic reasons either. But the issue here is not that, rather it is whether what has been done is allowed. Note the key is allowed, not legal. Case law clearly establishes that what is legal is not necessarily allowed for tax purposes.

I think the principle has clearly been breached in this case, and like I say I expect HMRC will either successfully challenge or if not get legislation amended to allow them to act in such cases. It should be very easy to write legislation that distinguishes between legitimate loans and those made purely as part of a tax avoidance scheme.