Are we evading ‘avoidance’ definitions?

Discourse is essential to fostering change. But discourse is not groups of people talking past each other; nor is it commentators using the same language, but according words differing interpretations to suit their argument. For discourse to foster change, it is essential that the language used in the debate is aligned and conceptually correct. The debate surrounding tax avoidance is certainly in need of alignment in this regard.

Terms such as ‘avoidance’ and ‘evasion’ are extracted from legal judgments and stripped of their context. This short piece will seek to give some clarity to this debate.

The easiest term to deal with is ‘evasion’. This is an illegal act and accords to a situation where the taxpayer is guilty of failing to disclose or concealing information.[1] If a shopkeeper deliberately lies about how much stock she has sold in order to hold onto customer’s VAT, this is evasion. It occurs, then, when a taxpayer has failed to engage with the law.

Avoidance, on the other hand, is trickier. The distinction between avoidance and evasion is often explained on the basis that avoidance is legal whilst evasion is illegal. But this is myopic and misconceived. Avoidance involves the use of the law in a manner which may not have been strictly intended. Sometimes this will be held to be legal, and in other times it will not. The feature distinguishing avoidance from evasion is that of engagement with the law. Whilst evasion arises where there is disregard for the law, avoidance arises where in fact the taxpayer has sought to comply with the law.

A brief example will help to illustrate this point. Let’s say that the law says that ‘Cycling through a red light is illegal’. Evasion then is cycling through a red light at a junction. Avoidance is approaching a red light at a junction, getting off one’s bike, walking with the bike across the junction and carrying on cycling at the other side of the junction. Whilst the former is illegal, the latter uses the rules in a way which is not intended. A policewoman watching the latter may or may not decide to book the cyclist, as it is not entirely clear whether the act is legal or illegal.

Avoidance and evasion are just two of the terms used in this debate whose definitions are in constant flux. It is imperative that everyone is reading, not from the same script, but from the same dictionary if any kind of meaningful change is to be procured. Discussions at cross-purposes rarely produce prudent, normative solutions.


[1] Michael Devereux, Judith Freedman and John Vella, ‘Tax Avoidance’ (Oxford University Centre for Business Taxation, 2012), available at:


About taxatlincolnox

Tax law academic. With this blog, I seek merely to contribute to the debate. All thoughts are mine, of course.
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