The Application of the Illegal Contracts Act 1970 to Contracts Associated with Tax Evasion

Abstract

This essay considers the application of the Illegal Contracts Act 1970 to contracts associated with tax evasion, by first identifying when such contracts will be illegal, and then discussing the circumstances in which the court will grant relief under the Act from the consequences of illegality. This discussion is largely restricted to contracts illegal at common law, rather than by breach of statute, although it has relevance to both. The discretionary approach of the statutory regime is contrasted with the strict common law treatment of illegal contracts, with a particular focus on the emphasis, under the Act, on doing justice between the parties, as well as the importance of retaining the deterrent effect of the common law rules.