George Osborne is stupid or naive or a liar. Or all of the above.

Alice, I agree. I don't see how he can possibly earn less than £150k. His house in Notting Hill is apparently worth £2m (so I learn from the Evening Standard ) so I think £1000 pw is on the low side. I imagine he's put that income into his spouse's name or something. AKA legal tax avoidance.

Off to google what Mrs Osbourne does...

I think that tax haven comment will come back to haunt him. The tide of public opinion is really turning against this sort of thing. It's like Margaret Thatcher's "there's no such thing as society.." - when your commitment to an ideology takes you to a very, very foolish place.

Osborne is Chancellor of the Exchequer - salary c.£134k

He is also the heir to the fortune of the Osborne and Little company - admittly not making much money at present but have built up a fortune in the past.

Osborne says he does not have an 'income' above £150k so did not benefit from the 50% to 45% tax cut as his 'salary' was below the threshold but did admit he had some other property income from letting a London house - he benefits from both No 11 Downing Street and a Grace and Favour country pile but neither are classed as taxable benefits as they would be for any other employee but does allow him to let out his original London home - rent must be at least £1000/week

So, either he really is not benefitting from his family fortune - probably because it has been paid into a trust fund - a popular tax avoidance scheme for the wealthy

and/or he is offsetting his property income against expenses - a popular form of tax allowance with landlords

and/or he does not understand the difference between salary alone and gross taxable income and he really is above the threshold but does not understand that - in which case - why is he Chancellor?

On the basis of the available evidence - I would suggest all three are possibilities - individually or in combination.

"It's a compliment to be a tax haven", says Francis Maude
Francis Maude has boasted about trying to turn Britain into a tax haven.

I don't believe that George has any real intention of cleaning up the tax system, if he did why do the rest of the cabinet not agree or at least know about it. It's just hot air until something else distracts us.

NO government is going to fix things, that is my point, it's not a partisan issue. No government has the power to challenge and effectively change tax laws to stop tax evasion etc. We may as well forget about the subject

I agree, why are people making tax avoidance a partisan issue. Pointing fingers at the opposition. Why is it so utterly inconceivable to people that the three major parties have their hands tied, they are not fundamentally different and they lack the will and the back bone to deal with this.

Maybe if we all realised that voting for one of the 3 isn't democracy at all we might actually have to question other issues like globalisation and the effect of these rich people and corporations, not just in lost tax but in terms of creating hunger in the third world.

I'm happy to pay tax but then I don't give to charity, they don't pay all their taxes but they give to charity. Horah! NO, they give to charity because it minimises tax and because by doing so they shape the underlying core values of those charities. We also have Dave setting up this new fund for investors to make money through social enterprise, so now we allow them to give, invest, avoid tax and make money out of social causes. my bet is that they will lobby for a tax efficient way of collecting those profits too.

We have a huge debt caused by the banks-we borrow from the IMF who issue phoney bonds which we use to bail out the banks-who owns the shares in the IMF......rich bankers. Who imposes austerity on the UK and makes ordinary people carry the financial debt? whilst they and their creed avoid paying tax but are happy to pay into charities, charities whose core business is to mop up the mess caused by the IMF! who imposes crippling debt on the third world? Anyone else notice a theme here? because I do and I don't believe the Torries or the left have the ability to take this on.

I think it should just be illegal to claim that you run your massive distribution business from what is effectively a PO Box in Luxembourg.

We have a relatively low corp tax rate but we are not a tax haven which is what Lux effectively is because it cannot sustain any other form of business. It would be relatively easy to do something about this because Lux and Ireland are both in the EU. there are minimum rates of VAT in the EU to prevent exactly this sort of arbitrage and there should be a minimum rate of corp tax too.

Or, a regulation to ensure that tax is paid where income is earned, not where the companies claim they are running their businesses from. That Boots claims to be a Swiss-run company is a bloody disgrace.

Anxious - Don't you think it would be better to have a competitive low corporation tax rate of say, 12.5%, so that foreign businesses could sevice the UK out of the UK, instead of sheltering in Ireland or Switzerland or wherever? Isn't it better (and fairer) to have a smaller tranche of everything that happens in the UK, rather than a larger tranche from smaller businesses who aren't big enough to divert their operations to a more tax-friendly spot?

OK then I genuinely don't think it's a problem. Amazon paying no corp tax in this country is a problem but this isn't.

I have many objections to the tax avoidance schemes available to the wealthy (the fact that private equity managers can pay tax at 18% for example and the stamp duty loophole) but not this.

Ah I wondered if it was that.
Show me a big company that doesn't avoid tax, though, in quite a major way? They're all at it, and it's facilitated by the government, who are advised/led/directed/coerced(?) by the Square Mile. NO government is going to fix things, that is my point, it's not a partisan issue. No government has the power to challenge and effectively change tax laws to stop tax evasion etc. We may as well forget about the subject.

AnxiousP - It's just that Apple are among the biggest tax avoiders in the world, and in the UK. They bay a UK tax rate of 0.2% of their UK turnover. This is because they shelter in Ireland, benefitting from its business-friendly 12.5% corporation tax.

At least the Tories recognise that we consume in a global market and it's better to get a small tranche of a huge amount of money (via competitive low taxes) than almost nothing at all.

margoandjerry - You are missing nothing. There's a genuine risk the country will throw the baby out with the bath water if people persist.

Um, why?!

AnxiousPanxious - Do you have an iPhone or an iPad by any chance? Or a Mac computer?

Can someone explain to me what he has discovered though? BTW I hate George Osbourne and his ilk so this is a genuine question. From what I read he has discovered millionaires giving money to charity and claiming tax relief on that - but since they are actually giving the money away, it's not the dodgy sort of tax avoidance that has everyone up in arms, surely. Like if someone gives £1m to Cancer Research they actually have to give that money away and no longer get the enjoyment of that income so tax relief is appropriate. Whereas if they have structured some dodgy offshore company to buy a house to avoid stamp duty they are genuinely buying a house and enjoying it on better terms than the average person which is completely wrong.

What am I missing here? Is this not like giftaid on a bigger scale? Or is the implication that these are not real charities? In which case that's not a tax avoidance question but a fraud question.

It was shameful that Labour didn't get the tax avoiders, but they wouldn't: it's one of the points where politics and money have differing aims, and money wins. No government will ever do this, it's off the table. Which is why we have to judge them by how they approach personal and small business taxation. It stinks but there it is.

And by the way, I would dearly love to have seen Labour crack down on tax avoidance.

Like Tough on Crime, it's one of those things where they tried to out-Tory the Tories to get the imagined middle vote, alas.

It's only come into the spotlight now because of the populace repeatedly shouting about tax avoidance while the Tories cut incomes of the working poor and essential services for the disabled.

And we're yet to see what actually comes of this. Especially as the first thing Osborne did was link "cracking down on tax avoidance" to "charities losing funding".

Haha, if you voted for the Tories in the hope of a small state, you must be well cut up by Cameron increasing the size of the Lords by 16 percent last year. 117 new peers, no less.

But in fact the people shouting loudest for a "small state" don't usually want a small state.

They want to get their commercial trotters in the tax trough. And for that they need a government that collects lots of taxes. The NHS as an opportunity for profit, etc.

And George Osborne is very bright.

Richard Murphy is fairly extreme in his view of tax reform. If a company earning below the threashold registers for VAT (this is allowed but only compulsory once a certain level of earnings is reached) RM would count this as tax avoidance. I think that's pretty silly.

I wish we could see the details of the tax avoidance measures that were used in those HMRC samples.

ttosca - but you don't answer the question above. Were Brown and Darling similarly stupid/naive/lying? If no why did they not blow the whistle during their terms in office?

I think most people recognise the Tories stand for a small state versus Labour's big, fat, waddling state. That's why they vote for them.

Sorry, just repeating AnxiousP.

"This Government with its idea of shrinking state provision... seems not to grasp the basic principle that... investors... will increasingly take over the business of the state via the back door."

They do realise. That's the point of it.

Freida-

See my answer to your question on the other tax avoidance thread in politics or in news.

Presumably Gordon Brown and Alistair Darling were similarly stupid, naive or liars? If not, why didn't they do something about it during their long term at the exchequer?

Hes all of the above.