If the coalition really want 'savings', why do they ignore the £40bn a year in tax avoidance...?

Quite right. It's a well-known fact that the people who pay the least tax are those who contribute the most.

And that the best way of raising the tax take is to lower tax rates to zero.

Tax avoidance is just common sense.

I take it none of you railing against tax avoidance have any money in ISAs or Premium Bonds?

Or is this envy again, taxing the rich till the pips squeak for the sake of it, even if it sends jobs and private investment overseas?

If loopholes exist the government can choose to close them; it should do so only on the basis of maximizing the gain to the economy as a whole in the long-term (not just to the Treasury).

Low taxes bring growth and jobs from productive private companies. If people are clever enough to lower their tax bill, then good on them.

I think that there is a culture in this country that says that paying tax is bad, and it is morally legitimate to avoid doing so. Hence the number of people who will offer the option of paying cash at a discount. It doesn't matter whether they are rich or poor, it is still wrong.

Unfortunately, recent governments both Labour and Conservative (going back to 1979) have refused to make a strong case for state spending as a Good Thing. Unless and until there is a govt that is prepared to do this, and a society that takes it on board, it seems to me that tax avoidance/minimising/downright evasion will remain socially acceptable.

I've often thought it might be a good idea if there were some way of giving those who pay lots of tax some kind of status/social recognition equal to those who give serious money to charity. So, just for example, a special badge to put on your car if you were in the 40% band, and then say an invitation to a Royal Garden party if you paid 50%. The idea being NOT to further materially benefit the rich, but to make being a high level tax payer a positive social status.

50 billion is un-collected taxes then Bertie why is that? Damn it we need that money right now!!!!

PAYE means you gotts pay...not let out there...its the others who evade that need rockets nes pa?

England - the Guardian tried to work out how much tax Tesco pays compared to what they actually make. Got into rather hot water IIRC.

avoidance is legal. paying a tax advisor to organise your/your companies finances to best effect is sensible if it saves you cash. In the same way, spending time on the benefit caluclators online is also fine (or indeed, getting advice from fellow Mumsnetters), to ensure you've claimed all you can. Either way you are behaving in a legal and decent fashion.

fraud however is not OK, and there is plenty of fraud going on out there.

I suspect few of us know landlords who pay income tax on their rental incomes? (less 10% allowed, mortgage repayments are not deductable) ....just one potential personal-level fraud....

The small amount of tax evaded by small businessmen i have no doubt is vastly outstripped by that evaded by larger companies (they have, after all, more turnover to evade with..)

and with things tight for many businesses the motivation to commit fraud is much stronger than in previous years.

the problem i think is that company tax frauds can be very difficult to detect, as HMRC check paperwork but not whether reality matches that paperwork (unless they already suspect something is wrong). They rely much on being tipped off.

earthworm not all tradesmen do work 'cash in hand' to avoid paying tax. My DH prefers to be paid in cash so as not to have huge bank charges (or is that bank charge evasion?). It doesnt matter beause it still goes through the books. I know because I do the books.

techlovingdad was pithier...

I second both Edam and Techlovingdad's explanations

But tax evasion includes those on benefits who are earning money that they are not declaring. They are evading paying tax and NI that is due.

Avoidance I agree tends to be an expensive business.

It is unfair that the government appear to be scared the rich will take their money elsewhere, particularly when as we have said these people are practising avoidance. This is not something due to the present government however, this has been going on for decades. I'm not sure who will be brave enough to tackle this, as it does stick in the throat I think of every rightminded person.

I agree that the public act quickly to condemn benefit cheats. However it is often seen to be okay to cheat the tax man, there is a definite attitude of "I pay enough already" and some people do regularly evade tax. Who hasn't paid or been offered a reduced price for cash in hand? And that does include people on benefits in some instances I'm sure.

Unless you are very wealthy in which case the public think you should pay what is due. By the way I think everyone should pay what is due within the laws of this country.

I have said above that benefit cheats, if working, do take from the "pot" twice which I find particularly hard to stomach.

But I can't agree that the government does nothing to stop avoidance. Perhaps they do need to raise it into the public consiousness more, to make it less palatable and more of a crime.

I appreciate that this does sound as though I am a Tory supporter and I'm not. I just don't think it is helpful to say something needs to be done, without offering ideas on what CAN be done.

(And I don't imagine many benefits claimants can afford to employ gardeners.)

Look at the non-doms and the House of Lords. Our dear leaders sure DO turn a blind eye to tax evasion by their wealthy funders. I give you Lord Ashcroft. Who has been making the laws you and I have to pay, including setting tax rates, while not paying full UK tax and lying about his tax status. If a benefits claimant behaved in the same way, they'd be prosecuted.

Tax evasion and avoidance is NOT practised by the poor - they can't afford financial advisers. It's practised by the relatively well off right up to the super-rich.

Things the poor do that limit government receipts are condemned. Things the well-off and rich do are treated as sensible and praiseworthy. Clear double standards.

Edam, tax evasion isn't confined to the rich.

How many times has a tradesman offered to do a job 'cash in hand' for you?

In the last six months I have had that offer from a plumber, a gardener, a taxi driver and a decorator.

The notion that the government turn a blind eye to tax evasion in order to protect their wealthy supporters is rather short sighted.

But they do not see themselves as nob ends.

Do you think the Queen and the 'royal' family see themselves as scroungers or feel bad or guilty for taking state subsidies when they can afford otherwise?

You see, this is the rub. How Cameron sees himself as 'middle class'?

How does he come by such a belief, if it is not a lie and I give him the benefit of the doubt that he believes this genuinely?

Where did he get this idea?

I do not want to believe he is a bad man, but a misguided and clueless one.

Despite my innate cynicism, I do not like to think he truly cares nothing for us, the working poor, or for my children, the product of this.

But the cynic in me does, because I have seen such in my own area.

I want to believe he might listen, but I know he hasn't by now.

OP, because they are nob ends.

When the government slashes public sector jobs, it'll be interesting to see whether they get rid of the people at HMRC who are paid to keep up with the rich, monitor and close tax loopholes.

LadyBB's right that the public debate is dominated by outrage at 'benefits cheats' while tax avoiders get away without a mention and there's barely any scorn directed at tax evaders.

Think it goes something like this:

• Working class person who costs the state money by overclaiming benefits = evil threat to society and public enemy.

• Middle class person who costs the state money by getting away without paying their fair share of taxes = fine and dandy.

• Rich person who pays less tax than their own cleaner = must be propitiated, my God, if we ask them for an extra tuppence ha'penny they might leave the country in a fit of pique.

Dh says there is no difference between 'tax mitigation' and 'tax avoidance' except that they used the word 'mitigation' in meetings.

'evasion' was doing things illegally.

'avoision' = legal but borderline
'evadence' = borderline but illegal

arranging ones finances in a tax-efficient way is perfectly fine (the tax system is, after all, fiendishly complex)

there is much out and out fraud however - and it is bad that if you commit such a fraud and pay it back, they'll probs not take it further than that (whereas benefit fraudsters would face jail).

They say it's because closing these loopholes will scare off the super rich. But the tax laws in the US are such that you must report all earnings from abroad no matter what, you can't even renounce your citizenship and get out of it for 10 years after that.

And there are still plenty of super rich.

but there are tossers everywhere, I meet daily mail reading ones and guardian reading ones.

ill informed opinion exists on both sides of the political divide

I don't agree that the implication is that everyone on benefit is assumed to be dodgy though.

I agree that they should do both.

We are in an awful bloody mess though.