Mr Michael Blackwell

This course is available on the BA in Anthropology and Law and LLB in Laws. This course is available as an outside option to students on other programmes where regulations permit and to General Course students.

This course is capped at 15 students.

Taxation is a topic that pervades political debate and is encountered in every area of life. This is recognised in the LSE Taxation course, where the approach to the subject includes a strong policy perspective. Legal issues are still important, but are placed in their economic and social context. This makes it easier to understand the purpose of the legislation, the reason for the problems encountered and why difficulties remain. So this taxation course suitable for a wide range of students – not just those interested in commercial law. The substantive law element of the course is UK based, but the issues that arise are ones that all jurisdictions have to face.

Students taking this course should be prepared to use a variety of sources ranging from statute and case law to literature on public policy. The precise balance of materials used varies from topic to topic. All the readings set will be accessible and non-mathematical. NO COMPUTATION is required and no knowledge of any discipline other than law is required. The course is open to second and third year law students, and experience suggests that it is equally suitable for both years.

The syllabus is set out below, although there is some variation of topics selected from year to year, depending on the focus of current debate, and in the order of topics. The course starts with an examination of the objectives of a tax system. What is meant by a ‘good’ or ‘fair’ tax? What is progressivity in taxation and how might it be achieved? What are the advantages and disadvantages of using the tax system to redistribute wealth or to provide incentives for certain types of behaviour? The course examines how employees and the self-employed are taxed and the differences between them, the taxation of business profits, how this is influenced by accounting developments and the ways in which we can tax companies and capital. We also study tax avoidance – how is this distinguished from evasion and is there a distinction between unacceptable tax avoidance and legitimate tax planning? Other issues that may be covered are taxation of the family and integration of tax and social security, international taxation, and constitutional issues relating to the use of ‘discretion’ by the Inland Revenue.

Syllabus Topics

1. General principles of taxation, objectives of a tax system, types of taxation, capital and revenue. Structure and administration; powers of HM Revenue and Customs. Outline of the British tax system. Taxation of the individual: rates, allowances and treatment of the family, national insurance contributions.
2. Business income (trading income) – taxation of business profits, income taxation of unincorporated businesses.
3. Tax treatment of capital – capital gains tax; other taxes on capital and on income from capital – objectives and effectiveness.
4. Alternatives to income tax – comprehensive income and other definitions of income; expenditure taxes and other taxes on consumption; indirect taxes (such as VAT).
5. Corporations – legal forms for carrying on a business, reasons for taxing corporations, corporation tax, integration with taxation of individuals, distributions to shareholders, taxation of groups of related companies.
6. Employment income – taxation of salaries, wages and other remuneration of employees and officers.
7. Expenditure – examination and comparison of the deductions available from business and employment income for different types of expenditure; the distinction between capital and revenue expenditure.8. Statutory interpretation – application and interpretation of tax legislation by the courts; tax evasion and tax avoidance and methods of controlling these activities.

20 hours of lectures and 10 hours of classes in the MT. 20 hours of lectures and 10 hours of classes in the LT. 4 hours of lectures and 2 hours of classes in the ST.

Students will be expected to produce 2 essays in the MT and LT.

Introductory reading:

Williams and Morse, Davies: Principles of Tax Law, Sweet & Maxwell, 7th ed., 2012)

James and Nobes, The Economics of Taxation, Financial Times/Prentice Hall

Avi-Yonah, Sartori and Marian, Global Perspectives on Income Taxation Law,

Oxford, 2011(copies of these books are available in the Library or electronically)

The principal book for the course is expected to be Lee, Revenue Law Principles and Practice (Bloombury Professional). Tiley, Revenue Law (Hart Publishing) will also be referred to. These texts are supplemented by the other readings that will be set. The cases and readings are readily available electronically or in the LSE library. Vouchers are available for students on the course to purchase of published copies of the tax legislation at a substantial discount. N.B.: most tax law textbooks are revised extensively on an annual basis, so do not buy an old one!

Watch the debates on this year’s Autumn Statement (in December) and Budget (in March), particularly in the more serious newspapers and weekly papers, as an introduction to some of the policy issues.

Exam (100%, duration: 3 hours, reading time: 15 minutes) in the main exam period.

Selected 'Legislation' may be taken into the examination, with non-verbal markings only.