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?

I agree with you, I don't see someone reducing their tax bill any differently to someone minimising their gas or electric bill.

Narked - apart from your first two sentences, I agree with your post. DC is on pretty dodgy ground by speaking out against it - I'd put money on it that it'll come back to bite him on the arse!

The PM is a hypocrite as he doesn't moan about Phillip Green doing exactly the same - I wonder why?

The loopholes should be closed. I read not long ago that Mick Jagger never pays stamp duty on any of the houses he buys in the UK because they are all bought and owned by some off shore trust. Can't see what difference that makes. So that loophole should be closed for a start.

This scheme is clearly tax evasion because clearly Jimmy Carr (and anybody else who uses such a scheme) is receiving an income, not a loan from these companies. As a UK citizen and resident he is taxable on his worldwide income.

Equally, there are guidelines to clarify whether a person is truly employed or self employed.

On the other hand, somebody who is genuinely self employed and sets up a Ltd Company so that they pay Corporation Tax and tax on dividends, rather than income tax as a sole trader, is following the letter and the spirit of the law.

Having just read an article about how ShinyDave's late father earned millions (for himself and others ) via tax haven investments under a Thatcher scheme -money which DC inherited a big chunk of, and which paid for his privileged upbringing- DC is in no position to proclaim the immorality of tax avoidance.

If DC is serious, he could actively take steps to close the loopholes. But he won't , because that would cost his Tory donors , and he can't risk upsetting them.

I'm someone who believes in everyone paying their fair share, and I am no fan of Carr - but I should think that his mistake is not to be a Tory donor.

Agreed Inertia - I think the government are scape-goating easy targets like Carr and other self employed people employed involved in this rather clumsy scheme to make it look as though they are being tough on tax avoidance.

On the other hand, people like Phillip Green who clearly allocate to themselves/their wives living in Monaco far more money than they could possibly know what to do with (while employing people at a rate that requires their wage to be topped up by benefits) become 'advisors'.

It's all PR.

Did the gov scapegoat him? I would have thought it would be the press.

No point in David Cameron whinging- why didn't he get the law changed?

Quite right Anniewoo - if only there were some way that DC could change things, rather than ineffectually hand-wringing from the sidelines and bleating about morals - oh.

Bono preaches about helping others but u2 have moved their financial affairs to Holland to avoid paying tax here. It makes me sick as Ireland could do with the money - there have been so many cuts here cos of rotten bankers and the government guaranteeing the rotten banks. Our wealthiest are tax exiles yet their families live here and they flit in and out of the country .

Ireland actually had a policy of no-tax for 'artist' type people so musicians etc would go there. Lisa Stansfield moved there,Joe Elliot (singer from Def Leppard) did so. U2 were natives but the regime may have changed hence the moving of U2's money. Bono and The Edge have (or had) a luxury hotel in Dublin and have been involved in property development so they'll probably say they've created opportunities (like P.Green)

IMO this highlights several problems in the uk

1. Tax system is too complicated.
2. If tax system was fairer, people wouldn't try to avoid paying
3. The gap between rich and poor is far far too big.

Discuss!

Do you feel the same about people using loopholes to avoid enforcement in other areas of law? That the problem is always the government's failure to close every loophole as soon as it's spotted (or spend years testing every piece of legislation so it only gets passed when perfect) and never the people who do everything to avoid abiding by the spirit of the law by manipulating the letter?

So, when a drunk driver kills a child but can find some 'mr loophole' to get them off on a technicality that's just fine and they have no moral responsibility for their actions?

If you think non-payment of tax is a victimless crime/choice, tell to the people having services cut which will significantly change their quality of life.

I think quite a few people here are being rather naive about how knowingly this avoidance is done and how legally close to he wind it is - legality or otherwise is often not established until tested in court. It is a deliberate search for unintended interpretations of the law which clearly go against its intention. Very much like computer hacking (but you'll think that is fine too, whatever the consequences, right?). It is completely different thing from sensible tax planning using intruments intended for that purpose.

Tax isn't that simple merry My DHs industry was hit by legistion years ago that meant though he was self employed (ltd company) he would be treated as employed and self employed and pay up to 60% tax. He and many others moved to a tax planning scheme. It was disclosed fully every year to hmrc. They said it worked, 7 years later they changed the law and people have to pack back tax and pentalties of up to 50%. It will bankrupt hundreds/ thousands. And bankruptcy means not working again in this industry. Retrospective legislation is very scarey stuff bought in by labour, nobody can be certain of their tax bill.

I wonder how many tax avoiders and their supporters also begrudge benefit payments and believe that Britain is too overcrowded to support immigration.

A fair few, I bet!

this is tax evasion I dont give a toss if there is a loophole
MY dh pays 40% tax because he is employed maybe we should all become self employed and just pay 1% im sure the country would go to the dogs then

it actually leaves me cold thinking the poor get poorer and the rich get richer, Jimmy carr isnt the only one
he has just been singled out I bet there is people quaking atm incase they are exposed, and what is dave cam bleating on about tories supported this in the first place

It is sickening, but it's a loophole that Cameron should close not whinge about people using it.

And a politician of all people lecturing about what is morally right and wrong?! At least its not outright illegal.

But if he closes the loophole, there will be another one. Instead of spending money trying to fix the loopholes, the government should be trying to make the uk tax system more attractive to rich individuals and businesses so that they WANT to keep their money in the UK. A simpler, fairer taxation system would be more economically efficient and profitable, easier to run and more attractive to the high earners in the uk. Then HMRC wouldn't waste billions trying to chase people who are avoiding paying tax, which is largely a pointless exercise as there will always be a way found to avoid paying in some way.

I think Jimmy Carr is just saying that he is going to pay tax because he was singled out. why was he singled out anyway what happened ? saw him this morning on tv looking a bit sheepish,

There is a long lists of criteria to judge whether somebody is employed or self employed e.g. do you work for different clients or one client all the time, do you have control over your work.

Equally whether you are resident or non-resident in the UK isn't just dependent on how many days you live here - there are also criteria like family ties, place of business and your normal 'home'.

Obviously these criteria can be a little bit grey, and there are points where HMRC will argue one way and the taxpayer/their lawyer will argue another. However, it is clear that many people try to avoid tax that common sense would show they should be paying.

I'm not sure what industry your husband works or the details of the scheme he joined Chinsup, but IR35 rules came in to stop people exploiting a tax loophole. Clearly if you exploit a tax loophole and do not obey the spirit of tax legislation, you can't be altogether surprised when the people who try to manage tax collection close that loophole.

What Tanith said.

I dislike Jimmy Carr but agree that it is the job of the government to close tax loopholes. There should be some way of ensuring that if you earn money in the UK OR reside primarily in the UK then the UK government gets the tax on that money. If parasites like Jimmy Carr then choose to live in Monaco good riddence, although Monaco would become less wealthy if money earned in other countries was taxed in those countries, as there aren't that many people in monaco to sell stuff to.

To tak the attitude 'if you don't like it, naff off and live somewhere else' is very short sighted.