To not "get" all the fuss about tax avoidance?

[Peppin]

There is a difference between tax avoidance an tax evasion. Tax evasion is unlawful, tax avoidance is working within the law to minimise tax liability.

I should caveat this post with the fact that I am employed and all my income is taxed through PAYE. If I had more sources of income and more of it, I would not object to paying tax on all of it (by way of example, I never seek to reduce payments by paying cash to plumbers etc.), but equally, I would not want to pay more tax than I had to in order to remain on the right side of the law.

It seems to me that for wealthy individuals, paying an accountant to advise on minimising your tax liability is perfectly reasonable. If the government doesn't like the net effect of this, then it is the job of parliament to pass legislation that closes the loopholes that permit the "avoidance". So why is David Cameron bleating on about tax avoidance as though it were some sort of criminal offence?

Of course it's legal, but it ain't right.

Paying 1% when you earn millions and only having to pay 1% because you are rich enough not to have to pay more.

It doesn't sit well with me.

I agree with the OP. The law is there to be exploited. Or loop holes should be closed

It doesn't sit right that people come up with schemes to avoid paying what they would normally pay through PAYE. How much money do they really need? There are plenty of people who work very hard, earn very little but pay the agreed rate of tax.
Agree the hypocrisy of Carr is breathtaking.

Agree with closing loopholes, absolutely. But how this particular government can accuse individuals of poor morals and still keep a straight face is beyond me frankly. Their own morals are seriously shaky in many respects.

I object to people who abide by the letter but not the spirit of the law. A society is based at least partly on the goodwill of all those involved; to deliberately try to circumvent the purpose of taxation is distasteful at best.

YANBU - I had a rant about this today. Of course everyone is trying to pay as little tax as possible. The schemes they invest in may work or they may not work, that's for the courts to decide. If they're found to be illegal the tax, together with interest and penalties, will need to be paid. If not illegal but going against the spirit of the law new legislation will be introduced to block the loopholes. I don't know enough about the scheme to decide one way or the other - if/when the details

YANBU, I completely agree. When I was younger and had inheritance money in trust my trustees did stuff to minimise the tax I had to pay. No idea what but I'm glad they did.

I have no idea what Jimmy Carr said or did, but he is a twat anyway.

Stupid phone...

When details are released then I can make up my mind.

I have discussed this with a couple of very rich individuals and the difference between avoidance and evasion is very slight in some cases. Just pay the bloody tax and stop bleating when you are richer than 99% of the other people in your country.

Imo its a case of the law is wrong. I can't blame people for not paying tax when they don't have to.

I agree. If you save into a pension or an ISA rather than putting your savings into an interest-bearing savings account then you are saving tax and therefore a tax avoider. There is no sin in choosing to structure your affairs to pay less tax where this is permitted by law.

The scheme whereby the head of the SLA got paid via a company rather than PAYE to save tax does not work. HMRC have the tools to combat this abuse - the law is clear, these arrangements do not save tax. For some reason HMRC just chose not to enforce the law in that case.

I agree. similarly i also believe if you are eligible for benefits, you should claim every penny.

there is more than enough illegal tax non-payment of varying kinds for HMRC to be getting on with.

"I have no idea what Jimmy Carr said or did, but he is a twat anyway." I agree.

There's tax efficiency (e.g. making best use of your personal allowance, managing a company to pay less tax) and then there is taking the proverbial.

Clearly Jimmy Carr is receiving an income, he is just using a round about method to pretend he isn't. It's a bit like a child with chocolate on his face pretending he hasn't been eating biscuits.

I think David Cameron is bleating on about it to make him look more even handed when he moans about benefit scroungers.

We should fix the law, not condemn the people who use it to their advantage.

If I were rich, I would avoid paying taxes (the legal way, of course, I wouldn't break the law to do so), and instead use my money for other worthy endeavors. I can do more good for society with my money than government can because I don't need 100 laws and regulations to put it to good use.

What bamboo and coops said.

Glad I am not alone! I really do believe in taxation but at the end of the day, no individual wants to - or should - pay more than their share under the law of the day.

It seems to me that the prevailing current of "tax avoidance is reprehensible" stems from some misguided sense of "the rich should just shell out to subsidise the rest". But we're not Communists for a reason!

I don't think that is what Communism is...

Because if your wealthy you don't deserve it and should be giving a lot in tax. I agree they should change the law, but it's still wrong that people choose to do it anyway when they have more wealth than they know what to do with and poor people are dying because there isn't enough money in the nhs.

Krumbum "if you're wealthy you don't deserve it"??

I think that vindicates my view that those who think tax avoidance is evidence of bad character are of a Communist mindset.

What I object to is wholly artificial transactions for the purposes of tax avoidance.

Moving a UK resident's company to Jersey and then taking loans from it rather than income JUST to avoid tax is taking the piss.

AS is buying your home through an offshore registered company to avoid Stamp duty (as Bob Geldof and others have)

Well your right about that when it comes to me but you cannot presume that everyone else thinks the same.

Some people do have more money than they know what to do with, and I completely condemn the greedy, but there are a lot of deserving people who are rich who live to use their wealth to make life better for others.

I condemn the wealthy who become rich by swindling, but not those who become rich by providing incredible inventions and services for the world.

YABU, avoidance is choosing to interpret the law so that it gives a tax effect that is contrary to the spirit and intention of parliament. Clearly it is not the intention of parliament to allow wealthy individuals to create artificial structures to avoid tax liabilities.

I don't know the full details of this particular avoidance scheme but from reading the press it appears that they are receiving income disguised as loans. Loans that they have no intention of paying back to the Jersey entity because it's their income in the first place! The 'mischief' is the legal documentation surrounding the transaction.

These situations are completely difference to tax incentives available to encourage people to save for retirement (pension relief), salary sacrifice schemes etc.. Parliament wants you to do these things and they are not 'tax avoidance'.

As soon as people start realising that tax avoidance isn't 'legal' the better. Tighter drafting of legislation is one way, but there are a very few 'loopholes' in modern tax legislation - scheme promoters count on the fact that HMRC is swamped in litigation. The only way to resolve civil tax disputes is to go to tribunal then onto court if there is an appeal. By the time the matter is decided in the favour of UK PLC then the avoided has had the benefit of those funds for x number of years and has normally spent it! HMRC needs more funds to tackle avoidance, it is seriously under staffed with qualified staff to deal with high level avoidance.