‘Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the Treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again, the courts have said that there is nothing sinister in so arranging [one’s] affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands: Taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.’
Honourable Learned Hand, US Appeals Court judge, Helvering v Gregory, 69 F.2d 809 (1934).

‘Taxes are the price we pay for a civilised society.’
Oliver Wendell Holmes Jr

Taxpayers are under a moral obligation to pay the level of tax set by the law. There is a clear distinction between:

• an attempt to reduce the amount of tax that is payable by means that are within the law while making a full disclosure of the material information to the tax authorities, and
• working outside the rules to try to frustrate legal obligations by hiding income through nondisclosure, or improperly taking deductions for which one is not qualified.

Tax law must be clear and certain, and it should be remembered that businesses will look to minimise tax impact as a part of their normal commercial activity. Tax is a business cost alongside any other and company directors typically have a fiduciary duty to run the business in the most cost-effective manner.

While most taxpayers try only to comply with the law, there have been many cases of convoluted tax planning schemes that are designed not for any proper business purpose, but to exploit loopholes in the law and avoid its spirit. ACCA does not support this artificial activity. Such actions, which may generate short-term financial advantage at the cost of long-term value, cannot be supported.