Ingenious but legal - the advisers on tax avoidance

'The tax avoidance industry is always ingenious, but it is one industry which this Government has never helped' - Kenneth Clarke, Chancellor of the Exchequer THESE words of the Chancellor when he presented his Budget must have had a hollow ring for some of the MPs sitting behind him.

Thirty-eight Conservative MPs work for firms or companies that advise clients on minimising their tax burden - either by exploiting loopholes or through investment plans such as offshore trusts. The very industry that Mr Clarke is determined not to help.

Tax avoidance within the framework of the law is perfectly legitimate - as most of the MPs involved have been quick to point out. None of the organisations involved concentrates solely on tax advice but they tell clients how to minimise their tax liability. Most have offices in offshore tax havens. There is no suggestion that they do anything illegal or improper.

Archie Hamilton, the former armed forces minister who advises the US investment bank Merrill Lynch, said: 'Basically the name of the game is that people will do all they can to avoid paying tax and will work within the legal limits to do so. The Chancellor is doing all he can to close the loopholes.'

Cheryl Gillan, who lists the accountants Kidsons Impey among her interests, commented: 'Tax avoidance is a complete misnomer when discussing legitimate tax planning. The sort of tax loopholes we talk about are legal tax planning points. I would never advise anyone to break the law.'

Ian Taylor, an adviser to BZW Investment Management, preferred to talk in terms of tax 'mitigation' rather than avoidance. 'Advice on how to organise your own affairs so that you pay no more tax than you need is a very sensible part of financial management.'

Quentin Davies, a consultant to NatWest Securities, and Ms Gillan argued that the Treasury was responsible for creating a series of so-called tax avoidance schemes, by offering tax relief as an inducement to savings plans such as Tessa and Granny Bonds. Malcolm Moss saw mortgage tax relief in a similar light. 'Avoidance is not a dirty word . . . You're not saying there's anything wrong with buying a house, are you?'

Along with a clutch of other MPs, including Tim Renton, the former arts minister, Sir Terence Higgins and Peter Ainsworth, these MPs felt the legitimacy of tax avoidance meant there was no conflict with the Chancellor's words.

Nearly all MPs, including Spencer Batiste, Peter Butler and Peter Temple-Morris, emphasised that they did not advise their companies on tax matters. David Howell, former Secretary of State for Transport, said he counselled the accountants Coopers Lybrand Deloitte on energy and transport issues, while George Walden advised Samuel Montagu and Chase Manhattan, both banks, on international affairs - 'It's small beer, looks terrific in the register of members' interests.'

Sir Edward Heath, who sits on the Public Review Board of the accountancy firm Arthur Andersen, said: 'Arthur Andersen's approach is to ask, 'What are your obligations to pay tax?' They advise on obligations, not how you should avoid them. They have a fundamentally different philosophy from the other firms.'

While many, such as Ian Taylor and Tim Renton, welcomed the Chancellor's attempts to close loopholes, they also warned against coming down too hard on foreign investment. Michael Stern, a consultant to Cohen Arnold & Co, believed 'the Opposition has this idee fixe that everyone, everywhere in the world has a moral responsibility to pay tax to the British Exchequer.'

Ian Bruce, whose own private firm lists the Saudi-American Bank as a client, said: 'I advise Saudi investors coming to Britain. You always have to be aware that loopholes bring in people to invest in the UK, to create jobs.'

Several members, including Gerry Malone, would not comment on their links with the firm or company or what they did for their money. Sir Peter Hordern, a consultant to the accountancy firm Pannell Kerr Forster, said that what he advised them on 'has nothing to do with you, unless you're a customer of Pannell Kerr Forster'.

Patrick Nicholls, who advises Dunn & Baker, a firm of solicitors which said it offered advice on tax and offshore trusts, dismissed enquiries as 'impertinent' before hanging up. Norman Lamont's office, meanwhile, said that to question the former Chancellor's position with N M Rothschild was 'completely ridiculous'.

Sir Anthony Grant, an adviser to Barclays Bank, said: 'Certainly loopholes should be closed . . . but (avoidance) has been going on since the dawn of mankind. The Chancellor blocks up one loophole and along comes some genius and finds another.'

(Table omitted)

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appeal
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
Arts and Entertainment
Strictly finalists Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge
tvLive: Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge face-off in the final
Ched Evans in action for Sheffield United in 2012
footballRonnie Moore says 'he's served his time and the boy wants to play football'
Have you tried new the Independent Digital Edition apps?
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture