The recent debate on tax in the UK has strayed into the murky area of questioning the relevance of morality. Chair of the Public Accounts Committee Margaret Hodge has stated that exploiting the complexity of tax law to reduce tax liability is “morally reprehensible”. David Cameron meanwhile in the last week voiced the opinion that there is a “moral duty” to cut taxes in order to allow people to spend more money on their families. What has perhaps been overlooked in relation to these assertions is that philosophers and jurisprudes for centuries have struggled to understand not only what influence morality has on the law, but also what influence it ought to have. As such, it seems unlikely that there will be a speedy resolution to the debate about tax law and morality.
Leaving aside the issue of what part morality ought to play vis-à-vis reducing tax bills, it is interesting to note that in certain circumstances there is no rigid figure as to what tax must be collected by HMRC. Taxpayers may find their tax bills to be less than that which is strictly owed under the law, without resorting to the use of ‘gimmicks’ or abuse of reliefs. As such, the tax which is raised from taxpayers is relative and this arises in two cases: first, where the law is fuzzy and second, where the law cannot be practically applied.
To explain this relativeness, it is worth recalling that HMRC’s primary duty is to collect and manage taxes and credits (Commissioners for Revenue and Customs Act 2005, s. 5). Within this duty is contained
“a wide managerial discretion as to the best means of obtaining for the national exchequer from the taxes committed to their charge, the highest net return that is practicable having regard to the staff available to them and the cost of collection”
In the case of complex or fuzzy law where it is unclear as to the true amount of tax which is due, HMRC are empowered to arrive at a working interpretation which objectively satisfies the will of Parliament and in their opinion would raise the greatest amount of money in relation to that tax, over the course of all taxpayers. This same logic applies where the law itself is clear but would be impractical or unworkable in a certain set of circumstances. The Courts have found time and time again that, where this arises, it is proper for HMRC to forego the full collection of tax in a particular case, so long as it is done with a view to raising the greatest amount of money for the exchequer overall.
Whilst morality will continue to cause debate as to its proper relevance in relation to tax, the relative nature of tax itself provides an interesting problem which is often overlooked. Complexity and resource constraints reduce the tax which might otherwise be due. With HMRC visibly struggling with the continuing reduction in resources (see here) and the increasing layering of complexity in tax law, this issue is set only to become more important. Should we not then be more concerned with reality than morality?
 Lord Diplock in the House of Lords in Commissioners of Inland Revenue v National Federation of Self-Employed and Small Businesses Ltd (1981) 55 TC 133, at page 163
 See R (on the application of Greenwich) v Commissioners of Customs and Excise  EWHC Admin 230; R v Inland Revenue Commissioners, ex parte Unilever plc  STC 681; R v CIR, ex parte Fulford Dobson  STC 344; Commissioners of Inland Revenue v National Federation of Self-Employed and Small Businesses Ltd (1981)