To think Gary Barlow is worse than a benefits cheat?

[Roshbegosh]

People cheating on benefits do at least need the money .... What he has done is hard to excuse IMO

The point about this scheme was that the money they put into it was nearly 100% safe. So if they put in £20million, they'd get most of it back, after costs etc. With schemes designed for investments- there is always a risk that it won't work.

So if this scheme was legitimate, they would put in £20m and know they may lose about 60% of it. This scheme wasnt taking any risks as they weren't actually investing in a anything. It was a complete con for the taxman and they knew it.

Tax avoidance sounds terribly reasonable in practice but exploiting the loopholes left is pretty fucking grimy in practice. See the FT article that I posted ^^

Here are some figures, so that we know exactly what we're talking about, and who is taking what out of our economy.

ONS breakdown of benefit fraud in 2012/13. Net it's about £1.5bn, of which £1.2bn is fraud. (£3.5bn overpaid - more than half due to error, and not fraud; £1.5bn underpaid; £900m otherwise recovered).

Then we have the tax gap. HMRC's analysis of it here. Look at page 3. Estimated at 7% of tax liabilities, it is worth £35bn and includes the type of scheme that we are discussing here.

*sorry, that should have been ONS breakdown of fraud and error

I totally agree with you. When the rich cheat....eg...the greedy MPs fraudulent expenses claims, it is usually not looked upon as a terrible crime, when the poor do it ( and their need is much more than the MPs) it is looked on completely differently and treated much more harshly. Rich celebrities who fiddle their tax is much worse than someone on benefits who might do an odd job on the side.

Rootypig In fact, it is quite plausible that capitalism requires a pool of unemployed, to discipline wages, and suppress inflation.

But unemployed ? benefits cheat - do we really need people cheating the system for more than they are entitled to in order to suppress inflation?

In 2010 Barlow donated more money to the Conservative party than he paid in tax. It's a pretty safe bet that that's the reason Jimmy Carr was slated by the PM and Barlow wasn't

jimmy carr did it got utterly slated im surprised he was allowed to stay in the country gary barlow does it and people cry but he is a national treasure he has an OBE! (yes but he still did it)

The people at fault in tax evasion/avoidance are those who have not closed the loopholes.

DoJo I'm not arguing that we need benefits cheats, that is absurd. I'm arguing that the system thrives on a percentage of the population being in penury - more than that, that we create and use an underclass, - so to then moan about those who commit benefit fraud, the vast majority of whom I imagine are poor, while at the same time lauding the wealthy, is deeply incoherent. It is doubly offensive because it is the wealthiest who benefit most from the existence of the working class, which provides the cheap labour to their capital and the demand for their products.

Public spending is the oil on the wheels of this system (this was my point about in work benefits, which are just subsidies to companies who have driven wages so low that people cannot live on them) - so for people to talk about the wealthy "wishing their money were better spent" just makes me laugh. How much richer do you think we can make people??? Who exactly is this system working so well for?

I wonder how many people coming down hard on Gary Barlow on this thread have ever paid a tradesman 'cash in hand'?

I'm an accountant, I can understand basic tax, but stuff like this is way beyond me. Turned out it was beyond his advisers too. No way GB would have understood it, he'd just have accepted their advice and signed on the dotted line.

I'm sure that if he happened to hire an architect at about that time, he'd have accepted the architect's drawings, not nipped out and got a degree in architecture, signed on with a firm of architects for the on the job portion of the training, then sat down and tried to work out if those drawings complied with building regulations, etc.

I have to say that a vast majority of people in this country, myself included, would do almost anything to avoid giving too much to the taxman. That's why when my DH is elf employed, we use an accountant! All perfectly legal, but avoiding nevertheless. If you are fortunate enough to earn lots why shouldn't you keep it? Methinks there's a bit of jealous reaction here?

Don't know if this has already been said, but, this pisses me off:

I can understand that benefits fraud is illegal, and rightly so, but I hate the way really wealthy people get to dodge paying their fair share and are protected by the law, because those in power allow the status quo to continue for their own benefit.

The loop holes need to be closed once and for all, but then the politicians wouldn't be allowed to benefit personally, so on it goes!

Re GB, though, I completely agree with cowsarescary. Not that cows are scary, but with her post

GB probably thought he was doing good by investing in this company that was supposed to be ploughing money into the arts, but then I am perhaps naive.

Why shouldn't tax avoidance in complex schemes be made illegal?

The loopholes do get closed, Misfitless, as they are discovered - this is a case in point.

But the fact is, it is so difficult to draft legislation that is 100% watertight, that new ones are found and exploited as fast as others are closed.

I used to draft contracts - it is incredibly hard to see every side of what you're drafting as you do it. And then 100 other people come along and add their slant on review / edit, so that sometimes the original force is diluted or something unexpected creeps in.

That's why I like 'flat tax' scenarios.

I agree with cowsarescary. If someone said to me - here is a perfectly legal way to pay less tax, I would do it.
Who in their right mind would say 'no please let me pay thousands more than I need to'?
And YY to anyone who pays cash in hand to traders. There's some tax avoidance right there!

Here's one: why should we pay such high taxes just to support benefit cheats and scrounges?

I disagree. If my tax bill was smaller than my contribution to a political party I think I'd have an inkling something wasn't right.

Here's one: why should we pay such high taxes just to support benefit cheats and scrounges?

We don't really. Benefit fraud is tiny.

No way GB would have understood it

From the FT article:

The investors borrowed 70-80 per cent of their investment in what the Judge said was unnecessary borrowing aimed to “inflate the scale” of the tax relief claimed on their losses.

The investors devoted at least 10 hours a week on activities aimed at demonstrating their active role in their partnerships, which would have been necessary to secure tax relief. These ‘research activities’ included listening to music, much of which was supplied by Icebreaker, attending concerts and exhibitions and searching for new prospective projects.

But the Judge ruled that they were not active partners.

Oh yes, I'm sure all this went right over his head

Is not just the wealthy who use tax avoidance measures. Here are some examples.

Let's say you're self employed and near your year end you invoice a customer who usually takes ages to pay. ( you prepare accounts on a cash basis) They surprise and pay within a few days, taking your earnings for the year above the 40% threshold. So, to bring your total yearly earnings back down to within the standard rate band, you pay a sum over to your pension funding, this proving an offset. This is everyday tax avoidance. And you'd be mad not to do it.

Another example would be on inheritance tax. Let's say your parents own a home worth £700k and also have a pot of money (say £300k) in the bank left to them by Grandma. When they go, you as an only child, would have to pay about £120k tax on that. So instead of that they pass over to you Grandma's pot now, live another 7 years, and you only pay tiny amounts of IHT. That's avoidance. If they signed over their house to you now and still lived in it, that would be evasion

There are hundreds of other every day examples. avoidance is perfectly legal but it's on a spectrum from NORMAL to incredibly COMPLICATED. But what they HMRC is cutting out is those schemes designed SPECIFICALLY to cut tax. But of my examples, which is those is not designed specifically to avoid tax? I wouldn't want to be a judge on this one.

Beck where you are entirely missing the point is the intention of parliament, which is the source of democratic legitimacy for all, including the tax code.

Everything that you describe was created in order to try to produce particular effects in the economy (pensions and investment) or from an ideology or principle (IHT).

What we're talking about here is a shabby and cynical way to create the illusion of losses which the Exchequer allows businesses to write off for relief.

I wouldn't want to be a judge on this one.

He seems to have found it very straightforward

sorry, the source of democratic legitimacy for law

Gary Barlow has not broken the law.

Benefits cheats are breaking the law.

The fact that both the UK personal tax and benefit system is the most complex system in the world and needs completely scrapping and starting again is a major issue we should all engage with.

In addition, we need to seriously consider why the UK Govt spending needs to be almost 50% of GDP. Just 100 years ago it was 15% of GDP and we were running the largest empire the world has/will likely ever see.

If we didn't have such big Govt spending we would not need so much tax. In Victorian times there was almost no personal taxation.