TAX PLANNING CASES 1. The Duke of Westminster” Principle.
Lord Tomlin stated: “every man is entitled, if he can, to order his affairs so that the tax attaching …is less than it would otherwise be. 2. The “Ramsay” Principle: This was established in a Capital Gains Tax Cases in relation to composite transactions.
At the time, the most prevalent scheme to avoid tax(especially Capital Gains Tax ) was to enter into a series of transactions, which would facilitate the following: a) Conceal the sale of property subject to Capital Gains Tax (CGT) b) The exchange of shares for shares, which would not have CGT implications.
This interdependent series of transactions would normally be “circular and self cancelled “. The Ramsay doctrine provides that whether a series of transactions is genuine or artificial would be dependent on the end result. Transactions which have no commercial purpose are treated as a fiscal nullity. The preordained series of transactions are disregarded if they have no business purpose other than achieving the preordained end.
The same principle was extended in CIR vs. BURMAH OIL CO.LTD. 3. Francis vs Dawson
Facts of the Case
George Dawson and family owned two private companies which they wanted to sell. If they were sold in UK at a gain, it would be subject to Capital Gains Tax.
Dawson wanted to sell to W Ltd a UK company. He was advised to sell by an exchange of shares for shares with an offshore company, G Ltd.
G. Ltd then sold its shares in the two companies to W Ltd. The scheme succeeded on the grounds that the end result led to “enduring legal consequences “and therefore the individual transactions had a business purpose and not artificial as in the Ramsay Case.

a) Edwards v Clinch 1981
A civil engineer acted occasionally as an inspector on temporary and hoc appointments.
Held: there was no ongoing office which could be vacated by one person and held by another so fees received were from self-employment not employment.

b) Hall v. Lorimer 1994
A vision mixer was engaged under a series of short-term contracts.
Held: The vision mixer was self –employed, nor because of any one of the case but because the overall picture was one of self-employment.

c) Carmichael and Anor v National Power company 1999
Individual engaged as visitor guide on a casual ‘as required’ basis were not employees. An exchange of correspondence between the company and the individuals was not a contract of employment as there was no provision as to the frequency of work and there was flexibility to accept work or turn it down as it arose. Sickness, holiday and pension arrangements did not apply and neither did grievance and disciplinary procedures.
A worker status also affects national insurance. The self-employed generally pay less than employees.