Responsible citizens expect to pay their share fair of tax as determined by the relevant legislation. It is reasonable that they should consider the tax consequence of their commercial decisions. This is generally referred to as Tax Planning. The complexity of the legislation often requires careful study. Some planning may go beyond the intention of the legislators. This is covered by general anti-avoidance rules.

The UK General Anti-Abuse Rule (GAAR) does not ban all tax avoidance. The GAAR bans abusive tax avoidance. It effectively describes what the legislation considers acceptable. This approach clarifies the ‘grey area’. It confirms that the advice of Charles Marcus is consistent with UK legislation.

The GAAR clearly states that it is entirely reasonable to take tax consequences into account when deciding which course of action to take. A decision to accumulate profits to be paid in future as taxable benefits, should in normal circumstances be outside the scope of GAAR.

This statement is confirmation of the long-established practice that employer and employee are free to agree mutually acceptable terms of employment, including salary, subject to local legislation. This is basis of Charles Marcus flexible salary arrangement which has been accepted by HMRC since 1998.