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?

TalkinPeace2 - Everyone should pay the amount of tax set by law for their income. Seeking to exploit loopholes to pay less might be legal, but is always morally wrong.

Obviously, it is fine to dislike the the tax levels that have been set, but I bet thats the same for everyone. No matter what ones income is, it would be wonderful if the tax level was only 1%.

cakeismysaviour
Everyone should pay the amount of tax set by law for their income
But there are MANY different rates depending on HOW that income is derived.
One for PAYE (20% tax + 11.8% NI)
One for self employed (20% tax plus 9% NI)
One for savings (10% or 20% or 37.5 % tax)
One for capital gains (28% tax)
And if one is running a business then one chooses the best way to extract money from that business.

if they close the loop holes then they will just bleat on about all the rich people buggering off. Thats what they always do. Thats what they said about the financial tax for the banks.

I heard someone trying to defend it on the radio earlier. He said that someone earning millions and paying 1% was paying alot more tax than someone on £25grand paying their PAYE tax, so that was OK.

What they didnt seem to mention was what was left over - OK so the multimillionaire paid maybe tens of thousands in tax, but even if he had paid 20 x that he still would have had millions left over. Surely there comes a point where you are earning so goddam much that you couldnt spend it up in a year or soif you tried, and so trying just to stuff more in at the trough, especially while the country in in recession (due to the greed of those top %ers) is abhorrant

DH and I are both fortunate to be employed but unfortunate in as much as we pay PAYE. I try to view it that we are blessed to earn enough to pay X in tax. It is a shame that others, who earn a lot more than we do, don't feel the same.

Jimmy Carr and his ilk (as opposed to a MN ilk!) still use the services of a society, I presume he would expect NHS and police help if he had an accident and uses other services so should pay his share as the rest of us do.

Why the rich think they are entitled to keep a larger percentage of their greater disposable income is beyond me.

talkin,yes you may not want your taxes spent on those items but as far as im aware none of us have the choice really how tax is spent

i do think its greed,you want more of your income to come to you not the taxman.you can dress it how you like but wanting more and more that is greed in my book

how can it be right then that a paye employee may pay the same or more tax than somebody that is earning far far more,because they have the way,knowledge etc

do the likes of jimmy carr not get payed enough for their work,and then making out their just like the man in the street,imo i dont think so

thekids
In exchange for less tax I get no holiday pay, no sick pay, no pension and my earnings go down if I have a bad month. Its risk and reward.
And I'm working in the other window because self employed people work whenever they can.

perhaps we should all insist on being employed as self employed contractors, that way we could take advantage ourselves. we could form tax avoidance co-operatives so that we can pay the services of a flash accountant between us all.
sadly we would probably lose things like paid holiday/sick pay/pensions, but as lots of companies are doing people over with pensions then maybe private ones might fare better, and there is always insurance (tax deductable) for illness. May put us in better positions to demand a decent wage too, especially if we all decided between ourselves what we considered what a working wage should be, and what we were worth, and refused to work for less.

Edgar I think that you'll find that the explanatory notes that accompany legislation introduced are very clear on the reason why the particular section of an act or statutory instrument is necessary.

Tax efficient arrangements aren't avoidance if they are commercial and not artificially structured but if their main reason is to avoid tax then they are!

I'm fully aware that tax rules can have unintended effects and if there effect enough people then there is usually a change of policy on enforcement or legislation to rectify it.

Sneaky? No, some schemes are brazen!

believe me theres a few low earners who dont get the proper "benefits" they should be entitled to even though they pay a stamp and tax

stat sick pay is a pittance from the goverment if thats all you get im talking,hotel workers,shop workers etc no sick scheme there and no pension so these people really dont see alot of security in these jobs or perks

and still the pay a percentage more in tax etc than the jimmys of this world

the tax you save atleast would enable you to insure yourself or make some provision,very hard on MNW to do that

Fifty Shades - are you serious - the 'rich' as you call them (do you consider yourself 'rich'?) are entitled to keep ALL of their income which they are not LEGALLY required to pay in tax. What they choose to do with this disposable income is nobody's business (incidentlally, many give away very sizeable amounts to charities). It is not down to the government or anyone else to say 'well you have paid your dues in accordance with the requirements of the law, but we think you shouldn't have all that cash left over so we are going to find another way to take that off you'.

It may be partially greed motivating some - I don't know the guy - but for me, if I earned enough to make one of these schemes workable, my motivation would be that - sure, I could buy more stuff - I would be able to save more for my retirement (not rely on the state), not have to gamble on schooling and send my children to independent schools if no good state ones were available (therefore not relying on the state), have private health care (not relying on the state), provide for my relatives (so they don't have to rely on the state). Ere is a heme here, no??

Of course he uses the services of a society, but I bet you my next pay cheque he is a net contributor as opposed to a net user of society's services, therefore in theory enabling those who are less well off to have access to them, AND CONTRIBUTING HUGELY TO THEIR PROVISION BY THE MASSES OF TAX HE PAYS.

I believe that at the bottom of everything, for a lot of people who have an issue with this, the underlying reason is jealousy. Why should someone who is already rich be allowed to get away with only paying the tax that the law requires? We must take it from him! COLLECTIVISATION! Hold on, where have I heard that before.....

My DF uses and offshore company like Jommy Carr (although he earns a lot less)

It's perfectly legal and I don't really see a massive issue with it tbh

why do some MNers think that anybody on PAYE working has the perks of a

sickness scheme through employer

pension through employer

generous holidays through an employer

profit sharing etc etc

get real,shop workers, cleaners,hospatality,private nursery workers earn a low wage and dont get these things but still pay tax and a stamp

im sure i live in a different world sometimes i really do

no you wont see a massive issue with it because you are gaining from it,

PULL THE LADDER UP JACK

So everyone here is happy to see their parents house, savings etc, inheritance tax go to the government. None of you would think of trying to offload assets to your kids as you get older, like signing over a house, giving cash gifts, and string up trust funds for grandchildren. Many of these are ways of trying to out with the government from taking your home/savings to pay for any old age care.

apologies catgirl thought you meant partner,even so i dont agree

We have an accountant who advises us on what we can do to limit tax, shoot us, my husband still pays way more tax then the majority of people here. And Ai will try to make sure that any money we have when we are older goes to our kids rather than into the government, I'm sure many here would do the same.

Krum, I meant that lots of wealthy people have earned their money and therefore they do deserve it. Because you said that wealthy people don't deserve it, and I disagree with that.

Some people have inherited and I can understand the POV that says thats unfair, although I would still disagree. If I earn a lot of money throughout my life then it is my right to decide to pass that down to my children and grandchildren.

Maybe Jimmy Carr doesn't think he or his will use the services of the NHS or schools but his/our taxes are paid for the benefit of society surely.

Not everyone has children and some resent their taxes going to Education but then where would they be without educated children growing up to be Doctors/Nurses/Teachers etc.

He should pay his taxes and is no better than the bankers he lampooned last year.

the poor probably cant set up trusts etc as their paying alot of tax in relation to their income,and maybe their parents to

there just getting by,and dont have that headache,they wish

I pay loads of tax myself kids

If it wasn't legal he wouldnt be able to do it

Being self employed he does miss out on a lot of security etc and is often out of for long periods and doesnt claim benefits

Society should not revolve entirely around the poor the way a significant proportion of MN seems to believe it should.

I very much believe in our welfare state, but just because poor people exist, that does not mean wealthy people should not.

people dont really care what the "rich" spend the disposable income on (well i dont)and yes they could put it on a horse race if they choose so

BUT they have the advantage of playing the tax system because the goverment let them against those that dont,is that fair

cat,i know its legal im not arguing that,its the fairness of the system i have a problem with

its legal in america to have a gun but it dosent mean its right IYGWIM

But they still pay a large amount of money in tax, so they are paying their way.

If these tax avoidance schemes were so brilliant that they could get away with not paying a penny, then I would agree with you, but they are not.