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?

Pandawatch
But the chief exec of the CSA was not
nor is the head of PR for HMRC
nor are the 3000 other Whitehall staffers who are in their own companies
or the around 1000 BBC staffers
let alone NHS and local government

until the tax rate is evened out between personal and corporate taxes, it will happen.

Some of the morally outraged might find this interesting:

Your Money And How They Spend It

I watched this programme earlier in the year and was surprised to learn that "The top 10% of households contribute, on average, five times more than they get back." Puts things into perspective.

Right so you are saying that people who might be using tax laws to their advantage ( not talking the multi millionaires or big corporations) and probably still paying way more than the average Joe in taxes shouldn't be allowed to use any services - yeah right! And I don't believe the majority here would do any different. If your accountant said, "if you set up your affairs this way and you will pay less tax" - would you really turn round and say, no please I want to pay as much tax as I possible can. We do pay tax, loads of it actually.

I worked from home, I was free to work for whomever I wanted to. I found out about it through other freelancers from one company I worked for and followed suit and that's when I took on more outside work. It's not illegal. I am neither a tax dodger nor a work dodger. I took advantage of the opportunities available to me and I'm not responsible if other people do not have the nous to do the same.

Puts what into perspective? That some rich people pay their share, and some pay almost nothing? Yes it does, doesn't it.

How much does Jimmy Carr contribute to society???? Not five times more than he gets back I'm sure.

But the top 10% are earning 5 times as much as the bottom 10% so why wouldn't they contribute a lot more?

tax avoidance is morally wrong and I have no idea why these loopholes haven't been closed up already but I imagine it's some bollocks about high earners then moving abroad in order to dodge tax altogether whereas it's fine for mrs supermarket worker and mr courier to be taxed under PAYE and pay proportionately more and die earlier through ill health

I don't know why Jimmy Carr has been singled out though and David Cameron and his croonies all have friends and family doing it anyway

As for people paying less and using more services, there are lots of ways of looking at that. I work part time though I go just over threshold so pay tax but I consider my main job is being a carer to my severely disabled child. I save the country far more in tax and services than I would ever be able to pay into it if I handed my childs care over to the state. You shouldn't judge peoples contribution to society by what they earn in figures

Making yourself out to be a contractor is different to using a company to lower the tax you have to pay by, eg, only paying yourself dividends, running expenses through the company etc.

I may have misunderstood what Damsel was saying but I know people who have been caught out by HMRC trying to make themselves out to be contractors when they are in fact employees.

I know quite a few contractors who have set up companies and pay themselves a lower wage and the rest in dividends, it's really common

Oh ok - I misunderstood Damsel. I don't actually see anything wrong with that - morally or legally.

Pandawatch really? to my knowledge, HMRC has not won a single IR35 case yet.

Yes but Fio they will be employees of the companies they set up - not contractors

Damsel working as a freelancer is perfectly entitled to use this arrangement, there are downsides to working as a freelancer, lack of job security being one of them. I am annoyed when people working in the public sector use this arrangement, I cannot remember who it was but someone in a senior civil service role was using it. Cannot see how they are a freelancer somehow.

I don't know so much tbh. The contractors I know are earning well into 6 figures and it does make me suck my teeth a bit that they avoid paying tax. It isn't fair when the PAYE equivalent is earning less but contributing proportionately more

"The top 10% of households contribute, on average, five times more than they get back."

However:

1. The market does not award income fairly - tax redresses this.
2. UK Income tax is designed to take contributions according to ability and the state gives according to need. If you want a system where your use of services is linked to amounts paid in, emigrate to Singapore, or vote for a different system.
3. Any figure like that is a bit made up anyway. How do you value having ambulances on call? How do you value the benefit of living in a (largely) civilised society? How do you value not having to walk through a shanty town to get to your house?

Yes. They were journalists. Got a notice through demanding back taxes. This was a few years back.

Panda
Ah yes, those cases related to self employed - hence why we all use limited companies now. :-)

Cameron is attacking Carr for avoidance in an attempt to cast himself as being on the people's side. But it's a bit rich for someone whose government has consistently rewarded the wealthy with tax breaks.

Tax-avoidance loopholes ought to be closed up. Cameron has a fucking nerve condemning someone for using them when he has the power to change things.

I voted for Dave but I think it was underhand and very unfair of him to make an example of Jimmy Carr in a cheap and cynical bid to curry favour with the hard-pressed masses. JC has done nothing illegal and if you want to go after tax avoiders with a flaming torch and a pitchfork then he is not the most obvious target - not by a long margin.

That is all.

"But the top 10% are earning 5 times as much as the bottom 10% so why wouldn't they contribute a lot more?"

They do contribute a lot more.

Come to think of it, yes, that is right! I stand corrected TalkinPeace! :)

Hmm - cheap and cynical attacks on others... I'm sure JC can take a taste of his own medicine :)