to think that 100% of MNers probably avoid tax?

[TravellingToad]

Just watching a frustrating debate on TV about a man who has legally taken advantage of a loophole permitted by the government in order to reduce his tax bill. Some people in the debate are on their high horse.

Now it occurs to me that unless you voluntarily hand back your tax allowance (roughly £10,000 per person) you are in no position to squawk about other people avoiding tax.

The £10,000 tax allowance is a legal tax avoidance loophole permitted by the government that means that you can assign £10,000 a year of your income and pay NO tax on it. 99.9% of people i'm sure grab it with open arms.

Anyone here voluntarily pay the tax instead of accepting the avoidance scheme? Anyone of you phone your accountant and say "I don't want to use that loophole thanks please donate the tax to the government instead" No? thought not.

I expect i'm about to get leapt on now with cries of "oh its so different though because he's so rich and I only earn £20k a year" but where do you draw the line? To the homeless person on the street you are rich beyond their wildest dreams, just as gary barlow seems to you. At what point does it become one rule for you and one for anyone richer than you?

Let the slaughter begin!

Maybe a dumb question OP, but how exactly would you not use the tax-free allowance? If you're on PAYE, it's applied automatically through the payroll software, if you're self-employed and file online it's automatically applied to the calculation, if you submitted a paper return with the tax calc wrong, it would either be corrected for you or sent back, if you phoned up to donate money you'd be told it wasn't possible, and if you wrote in with a cheque it would either be returned to you or, if cashed, kept as a credit on your SA account for you to reclaim at any point, probably with a GIB note on the system.*

HMRC doesn't have the authority to accept money without the existence of a legal charge or contract settlement based on a legal charge (think that was established in the Demibourne case, though I might be wrong) - you can't actually choose to pay more tax than you're due.(Can you tell I've just escaped after far too many years in HMRC?)

(*GIB = Green Ink Brigade)

No, you're still talking bollocks.

"Lougle when you say government endorsed do you mean "legal"? because so was this."

No. I mean that ISAs are set up and legally intended to be exempt from tax up to a limit each year which is set by the government.

The icebreaker scheme allowed stars to 'invest' by borrowing money and putting it in the scheme. This scheme had no prospect of returning that money through the sale of intellectual rights, which was the front of the scheme. Instead, the borrowed money was circulated then used to pay out a 'guaranteed payout' which covered loan repayments. The stars were then able to declare the 'invested'money as losses, which meant that they didn't have to pay the equivalent tax on their real earnings.

Technically legal in practice but the overall intent was to artificially diminish their tax liability when they hadn't actually made the losses in real terms that they were claiming.

Forget the "tax avoidance is legal" argument. It's not the point.

So you're a millionaire musician. Your account says to you "hey, I can squirrel away £10 million of your hard earned income and you won't have to pay any tax on it, it's totally legal!"

Do alarm bells not ring? On an ethical level if nothing else?

Yes of course YAB bloody U.

Have you not heard of JK Rowling?

She pays every penny of tax she owes without trying to find legal loopholes for rich people and she gives away so much to charity that she's dropped out of the rich list.

Not everyone is a money grubbing greedy creep. No amount of saying "oh but it's legal" or "well poor people would also avoid tax" changes the fact that if you are staggeringly rich, avoiding tax is deeply, deeply naff, venal behaviour.

But OP. I pay more tax than I have to. I could save a few pounds a month in tax using childcare vouchers but I don't.

No, you're still talking bollocks.

I've overpaid tax. I'm sure it's not that uncommon.

beaksnout has explained more eloquently than me.

calamitously excellent! You may bitch about gary to your hearts content without irritating me ;)

No bitterness, beak, Not about the earnings. Poor Gary is hardly going to be skint by paying the appropriate portion of tax on his earnings, though. He's hardly going to be deciding between asking for a month's rent leeway or feeding his kids, is he? Even at the less extreme end, he's not going to be thinking "shit, if I pay all my tax to the letter of the law, the school fees will be a stretch, this month".

Paying on the basis of affordability is not fair and never has been. If it was, the same system would be prevalent in the private sector. If you and a mate went on the same holiday, but you were on £50k per year and your friend was on £25k per year, should you pay double for the holiday?

Totally false analogy, thank goodness the country moved on from this attitude in the 1940s.

WellWhoKnew

It is a government endorsed tax relief. It is not a loophole.

Which? The £10k tax allowance or the scheme GB invested in? Because as far as I am aware, Icebreaker, the investment scheme that Gary Barlow (and other members of Take That) invested in was designed to use government endorsed tax relief aimed at supporting creatives such as musicians.

I suspect the dividing line is actually when you pay someone with specialist knowledge to interpret the legislation in order to make a substantial difference then it starts to look iffy.

Not just confined to very rich. They tightened up the rules when IT contractors were able to declare earnings of 8k pa despite being paid 50ph and working 40+ weeks pa full time.

There are plenty of people who don't think as individualistically as 'why should I pay £15 million in tax if I can get away with not doing so?'. Apart from anything else', you're left with a huge amount of money after paying £15 million in tax. Lots of people would just be pleased to be so bloody rich.

"Because as far as I am aware, Icebreaker, the investment scheme that Gary Barlow (and other members of Take That) invested in was designed to use government endorsed tax relief aimed at supporting creatives such as musicians."

That was the claim but the court found that there was never a realistic possibility of making a profit so it was actually a shelter.

You are being unreasonable, or ignorant, or both.

I've just paid a (very small) NI bill I didn't have to because I couldn't be bothered to fill in the low earning exemption form for my self-employment. Do I win a special badge or just the right to loath Gary Barlow I'll have both please

*insertrandomnamehere i've said already, I was being of course facetious. Believe it or not I do understand what the tax allowance is. I'm trying to say that I doubt anyone on this thread pays more tax than they have to. Thats all gary did. He didn't pay any more tax than he had to, within the law.

People gleefully use childcare vouchers, ISAs etc (ok maybe they would have been better examples) to maximise money in their own pocket. We're all human. Money in our pocket is what we want.*

Again, you don't understand. The line between evasion and avoidance is very blurred, and again the line between aggressive avoidance and tax planning.

I don't pay any more tax than I have to, nor do I pay any less. It's very easy for me, I pay tax through PAYE.

As a self employed entertainer, it's much more complicated. It's the same for a business. They make decisions to reduce their tax bill, of course. This is fine as long as they use the intended mechanisms to do this.

I've got no problem with GB using tax planning to reduce his tax bill. His tax affairs will be very complex and he will have choices to make. That's fine. Creating an elaborate scheme of substanceless transactions to exploit. Loophole in the law is not tax planning.

I should add, I also use ISAs, pension relief etc. so I have made choices with the aim of reducing my tax liability.

This is not tax avoidance. Parliament intends for me to use ISAs etc to reduce my tax bill, and I've taken them up on the offer.

What I haven't done is employ an accountant to scour the thousands of pages of tax law to find loopholes that noobs else gas found yet that can exploit to dramatically reduce my tax bill.

Noobs else gas = nobody else has !

The scheme was more similar to money laundering that investing. What legitimate scheme gives you back the money you invested in the first place in small chunks so you can pay the loan you took out to invest in it?

Well no be cause everybody is allowed too earn up to 10,000 without paying tax how is that a loop hole?

nsertrandomnamehere, bravissima.

of course no one pays more tax than they have to. none of us are beating down the door of number ten saying here dave have this wodge of fivers on me. what we are talking about here is people who earn a significant amount above the average salary in this country making a conscious decision to take part in a scheme that avoids paying the tax that is due. that is not all Mr Barlow did is it. he asked some clever financial people that he could afford to pay probably more than I earn in 10 years, to work out a way so that he kept hold of more of his money. sorry OP but I do not want money in my pocket. I want services for people who cannot provide those services for themselves. mr barlow sets himself up as someone helping the disadvantaged which he gives with one hand whilst systematically and consciously taking with the other by denying the govt sufficient of his money to provide services for them. he is wrong. he knows he is wrong. the public know he is wrong and actually I think so do you.