Breakingviews | Tax avoidance

Considered view

18 Mar 2009 10:23

Closing the loopholes

By Hugo Dixon

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Context News

Barclays Bank secured an emergency order in the early hours of March 17 to ban the Guardian from publishing internal memos from the bank’s structured finance department. The documents refer to alleged tax avoidance schemes.

The bank is now trying to secure a permanent order preventing the publication of the documents. Barclays argued that the documents contained sensitive client information and internal knowhow which would cause it material harm if publicly available.

Alan Rusbridger, the Guardian’s editor, told the court it considered the documents to be of the “highest significance in the debate about tax avoidance. They revealed at first hand the processes involved in structuring extremely complex and artificial tax avoidance vehicles; how lawyers and accountants worked together to exploit loopholes in government legislation; and the degree to which they are sanctioned at the highest levels within Barclays.”

It’s hard to blame the likes of Barclays for avoiding tax by elaborate fiscal engineering. The real error is that governments have allowed loopholes to mushroom. Normally, cracking the problem would be hard. But the financial crisis may have changed the zeitgeist.

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Closing the loopholes

Context News