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?

Well no. It isn't fair really

But l feel a bit sorry for JC getting as much flak as he is for doing something legal anf that a lot of people would do if they could

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."

if it was that clear HMRC wouldn't have to go to long periods of arbitration deciding whether they apply to this company/ situation or that...

I can categorically tell you that in respect to the tax legislation that this type of scheme is based on, rarely is anything which is the basis for NOT paying a tax or deferring it 'clear'. These schemes are born of the ambiguity of words and / or often, what is NOT said as opposed to what is - as a general rule what's not made illegal in our country is deemed to be legal.

If these schemes were easily available to all and not just the already wealthy, I would have less of a problem.

At present, they're legal but immoral. So why haven't the government fixed the loophole - I'd guess because many of them have similar arrangements.

Exactly panda

They ARE 'available' to anyone, in theory. However the costs of setting up the relevant company structures, having lawyers and accountants advise, draft all of the documentation, provide legal/tax opinions, and the scheme put into effect and serviced are prohibitive unless the amounts involved are relatively large.

There a soooooo many 'loop holes'. Did any of you listen to the BBC R2 debate on this today with I think Jeremy Vine? He has an accountant on who basically said that if the loop hole gets closed, they just look for ways around it / another loop hole. These huge accountancy firms don't make their cash doing Joe Bloggs' tax return...

You don't need lawyers, accountants and docs etc........there are LOADS of agencies who will sort this out fir a small fee

(although I think only if you are S/E. Would be much more complex if you were PAYE I imagine)

But l feel a bit sorry for JC getting as much flak as he is for doing something legal anf that a lot of people would do if they could I certainly don't! He's a fecking hypocrite, especially after that 10 0'Clock Show sketch where he took the piss out of Barclays for minimising their tax contribution!

I hate tax avoidance. I don't care if it's borderline legal - it's immoral and it disgusts me. And no, if I had the chance to do it, I wouldn't. If I earned megabucks, I honestly would be happy to contribute my share, e.g. 50%, or whatever the rate is - even though of course (like most people), I don't agree on how it's all spent. The country cannot afford to run the NHS, schools, roads, defence, street lighting etc, on what the "average" tax payer contributes; it relies on those earning more to pull their weight too.

No they don't deserve to be rich, just because you earn too much does not mean you work any harder.
Inheritance tax is over only over 300000 and they dont take it all there after! You can still pass on a huge amount of wealth that way. It's not losing your parents house blah blah. Don't bleat on about the plight of the wealthy.

No, it doesn't always mean you work harder. But sometimes it does mean you work harder. It is more likely to mean that your work is worth more.

Outraged,please explain that one

Haven't had a chance to read all the posts here but here's another thought for those in the YABU camp:

Self-employed people and contractors who choose to set up a limited company and "pay" themselves through that are no better or worse than Jimmy Carr and his tax-avoiding peers. They do this for the sole purpose of avoiding tax at income tax rates as they can channel funds instead through the limited company and pay only dividend tax rate.

So what's the difference?

I am unsure how rich people manage to avoid tax and then think its ok to do so

Oh and Krumbum, the wealth that people pass on when they die is not only taxed over £300k, but has also been taxed at the point of earning/acquisition during their lifetime. This isn't a feudal society we live in.

In what way is their work worth more?

peppin,yes there are other sectors doing this,i agree they are no better

but rather than me getting involved in that topic im gonna stick to the original post,as i think my heads gonna explode soon,lol

And what about the husband and wife companies........ we have one of these. All income to company. We are 50:50 shareholders, therefore two basic rate bands as well. All legal, all above board - for now, the government had a go at these set ups and no doubt will again.

The work of a heart surgon is more valuable than the work of someone selling double glaxing over the phone

But that's a flippant example and I dont think wage always means the work is more worthy.

Footballers earn a lot more than nurses etc.

Looks as if Gary Barlow's knighthood may be going down the pan....

catgirl
most heart surgeons are self employed for their NHS work and run Limited companies for their private work - to minimise the tax on their £250k incomes.
does that make them better or worse

Peppin, I suppose it's aggressive tax avoidance I object to the most, i.e. somebody pays 3% rather than 50%. I'm not as incandescent with rage at the Sole Trader/Ltd Co analogy. I'll probably raise an eyebrow at the latter, but shake a fist at the former .

doesn't affect it either way for me

I am someone who thinks people have over reacted to Jimmys tax affairs and whose father has used a similar scheme for as long as I can remember

I know a number of surgeons (not heart ones) in my professional capacity and I can tell you that £250k is about 3 months' salary for most of them (the ones who do mainly PP with just a bit of NHS). But perhaps that's OK because they're doing "worthy" work, while the Jimmy Carrs and Gary Barlows are just milking the system?

Ok, I'll try to explain. Probably badly!

Someone who is a TA, like me, earns barely above minimum wage. When I go to work, I work bloody hard. I give my job every ounce of effort I have and I can leave work feeling physically and mentally drained. But, let's face it, it's a job that millions of people could do. When I leave work I don't really have to think about it until I turn up at clocking on time again the next day. I do think about it, because I care about it, but I don't have to. I can do what I want in the time that is my own, and it will have no effect at all on how I perform when I next go into work. It's a valuable job that society needs and I believe it deserves to be better paid, but it doesn't generate money, and like I said, there are plenty of people that could do it just as well as I do.

Someone like Wayne Rooney earns a fortune. A big fortune. When he goes to work, he works bloody hard too. He gives his job every bit of effort he has and is probably often exhausted when he leaves. But when he does leave, he has to make sure he eats properly, gets enough sleep, and does what it takes to stay healthy, because if he doesnt, he wont be able to do his job properly. He risks injury when he works. Now, don't get me wrong, I'm not trying to say that Wayne Rooney has a hard life. Clearly he doesn't. But the fact is that there aren't many people in this world that can do the job Wayne Rooney does to the standard that he does. He has a talent that i dont have. Therefore, his work is worth more than my work. And his work generates money, so he deserves to recieve some of that money.

This is a very crude example, I realise that. I'm just trying to point out why one persons work is worth more than another persons work even if they work equally as hard.