Tax avoidance, has really changed my opinion of someone

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For clarity, I am a moderately high earner, paying higher rate tax. I do take advantage of legal tax savings by paying into ISAs and a pension, but generally recognise that tax is necessary if we want things to work and am happy to pay my share. I don't, for example, vote according to where I think I'll pay less tax.

Friends of mine have 6 children, all went to the very ordinary local comp, most have decent but ordinary jobs.

One son does "something" in the city. His dad talks about him and his success and wealth all the time. It sometimes makes me cringe for the other DC, but his pride is understandable. He also gives rather too many details of exactly how much the son is worth for my liking, but I was raised never to discuss money.

Anyway, so is due a big bonus (low millions) which will be paid next tax year. Dad was telling me about a clever scheme involving living off shore for 9 months so that he doesn't have to pay any tax on it. Dad is thrilled at the idea. This is a man I used to have a lot of respect for - we have similar career paths ourselves.

I felt really disappointed. I understand it's a lot more money than the few thousands I am "happy" to pay in tax, but he's a young man enjoying immense good fortune (albeit worked for) and he's going to avoid putting anything back.

This is obviously his choice, but I am disappointed that my friend, his dad is so thrilled about it, especially (but maybe not relevant) as they are a family which has been very costly to the taxpayer over the years, lots of children, education, medical care, two of the adult children currently claiming benefits etc. He and his wife are first to complain that DF is having to pay care fees, but where do they think the money should come from? It's changed things and I couldn't speak at the time. I was hardly going to tell him I think his pride and joy is a terrible person, but equally, I couldn't be pleased about it.

This is a strange post. The us is actually one of the few countries that taxes its citizens even if they are non resident in the USA.

Banks, investment companies etc have Mid East offices so he could work out of there. Housing may also be paid for. Someone I know has a daughter working for Emirates airlines. Tax free salary, and apartment provided and she travels the globe. Still in her 20s. Went from working in Home Bargains to Dubai. All her living provided when she is on stop overs in Dallas or Bangkok etc

50% of nothing is nothing, so this is an example of the argument for a 10% flat rate charged that would allow higher net earners to stay put.

That's pretty loaded language. If the law allows it it cannot be 'dodging'. Putting it the other way, if I am not tax resident in the UK, and pay all my taxes in the country in which I am resident, what right do you think the UK government currently has to interfer with that? Likewise, the law puts a statutory obligation on directors of a company to act in the best interests of the comany and it's shareholders. Deliberately paying more tax than is required is a breach of that duty.

You of course are at liberty not to use the tax planning techniques that legally exist. That's not a moral choice though. If it was just about what was 'right' for the country you would voluntarily donate all of your surplus income to HMRC, and their is a channel to give aditional funds to HMRC if you want to.

There is a massive gap between illegal and morally wrong. We all have different points in between that we consider acceptable or too far. But yes, someone doing this would be a massive no for me, regardless of the fact it is legal.

If it's not illegal, it's fine. You admit that you do what you can to avoid paying unnecessary tax. It's the same principle. Just on a larger scale. The gov loses more by many ordinary people using ISAs, pensions etc than the odd person doing this with a huge bonus.

Ultimately, the government is rubbish at spending money. I'd probably rather this guy had it & spent it in the UK on goods & services or invested it in UK business than it being taken in tax

I had a friend (well friends husband) who did this as well. Then he got cancer and moved back to the UK for healthcare (in treatment for five years) never having paid a penny in UK taxes.

Doubt anyone would do that now given the state of the NHS.

I used to do expat tax. If the money was earned from time he worked in the Uk it should be taxed here. You used to have to live outside the Uk for a complete tax year to be exempt from UK tax.
WFH for a UK company also cuaes all sorts of tax issues - overseas branch of UK firm etc.
Maybe he's heard of this scheme off a mate in the pub and hopes it will work.
Or if it has been properly signed off and is legal then thats the governments fault for letting these rules exist (the same as for Amazon, Apple, Starbucks etc).

Don’t waste your breath airing your opinion. You’re not going to change his mind.

I think OP hilariously lost the moral high ground when including in her post she also use legal loopholes to avoid paying tax

No one costs the taxpayer more than a born and raised Brit.

Oh no! I did that thing where I copied your original post. I hate it when others do that 🤣

I'm not going to have a go at anyone who exploits loopholes

Ive always been paye and yes it hurts when you see your tax breakdown but it also makes me feel a little proud as well

Yes, me too!
I pay a lot of tax and it does make me feel proud

I'm sorry OP but to a large part of the population (including myself) taxation = legalised theft.

Good luck to the bloke.

That link is to do with people who are resident in this country but have income or assets abroad that they fail to declare.

This situation is different. The son is relocating abroad for a period of time.

I'm not so sure about the 9 months thing though. This from the advice:

"If you’re non-resident, you do not pay UK tax on income or gains you get outside the UK. You may be non-resident the day after you leave the UK - this depends on your situation and how ‘split year treatment’ applies to you."

and:

Overseas tests

You’re usually non-resident if either:

you spent fewer than 16 days in the UK (or 46 days if you have not been a UK resident for the 3 previous tax years)

you worked abroad full-time (averaging at least 35 hours a week), and spent fewer than 91 days in the UK, of which no more than 30 were spent working

Source:

https://www.gov.uk/tax-right-retire-abroad-return-to-uk

Well thank god not everyone thinks like you. We wouldn't even have roads to drive on never mind police, courts, sea defences, education for all children, social services, libraries etc etc etc.

Yeah, the USA has plenty of fraud cases. And they have a whistleblow system, explained here. That helps uncover those frauds.