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!

Ubik1 - tax avoidance isn't immoral - it is normal and i should say required. Evasion - is illegal and arguably immoral. i would argue that it is immoral to encourage profligacy and waste in government. Funding this idiocy condones it.

His money has been used by the government. Not only on health and education but on bombing iraqis, funding the french sheep farmers, keeping lloyds bank solvent, ensuring MPs have lovely homes and giving the foreign aid to a country with a very nice little space programme.

If you think it is simply about right and wrong then you potentially not thinking it through - there are always grey areas

Haha...this is hilarious. I wasn't aware my personal allowance is infant a legal loophole, a tax avoidance scheme! Hee hee, how funny?

I'm guessing this thread was started by Gary's PR company.

"There is an assumption here that 'the little people' just don't get how complex the tax system is"

I don't think anyone is being deliberately condescending. Truth is that the tax system genuinely is complicated and people who are employed to be good with money will use it to their advantage and occasionally sail very close to the wind in the process. It takes a test case to establish that something is illegal and, once established, that loophole is closed. Slow process.

In the meantime, paying tax is not a morality issue it's a bill, and in the same way that we all pile into comparison sites trying to reduce the amount they pay for gas or car insurance, we are all interested in legitimate ways to pay less tax.

*infact not infant!!

your personal allowance isn't a loop hole. it is an allowance simple - it gets taken away depending on your circumstances.

Transferring shares to your partner to minimise CGT is.

Giving money to charity in your will is.
Entrepreneur relief?
innovation relief?
VAT relief?
Advance Corporation Tax relief of shares?

not sure if it has been said but the difference between the allowance and a loophole is intent. the allowance was intended by law, loopholes were not in the spirit of the tax law.

Moral relativism... :)

But cogito - one is a government scheme to help people on relatively low incomes pay for childcare.

The other is someone who earns millions willingly participating in a scheme that a judge has later deemed to be tax avoidance.

There is a difference in what the government intends when setting up childcare vouchers scheme and when sharp practice enables rich people to exploit legal loopholes.

so if you contact HMCR and say 'I wish to pay tax on my first £10,000' they will arrange that will they

we ALL get that tax allowance - even Saint Gary

When I was married my husband - self employed, successful company, employed an accountant to do his tax returns - he didn't try and avoid tax - he paid it and was happy to do so because he felt he had a moral obligation to care for the less well off in society

He had been in care and in poverty and he never forgot where he had come from

Yes the 'I don't use the services' argument.

Call the nice private ambulance or the private police force....

If any one is in any doubt over the complexities surrounding investment in the production of film and television (such as a DVD of a live show)

Enterprise Investment Scheme (EIS) and Co-productions in Film and Television
This note is being issued to clarify the interaction of the above and, in particular, the eligibility of co-productions to access EIS.
In the case of co-productions each party to the production is responsible for creating a certain part with usually the majority producer responsible for collating these parts into a finished film or programme, the finance necessary to produce the individual parts being raised by each party.
The intellectual property created in relation to the film or programme is jointly owned by the parties and income from the film or programme shared between them. It is a common feature that the parties will divide this income in the same ratio as their input into the production, though there may be some exclusive territorial rights for each party. One of the parties will possibly receive in excess of 50% of such fees, though in the case of a co-production involving more than 2 parties this may not be the case.
The proposition has been put forward (and accepted in instances in the past) that if a majority producer, i.e. one creating in excess of 50% of the production, receives royalties or licence fees then under s195 Income Tax Act (ITA) 2007 it is not conducting an excluded activity and thus eligible to be considered a qualifying company for EIS purposes.
However the view of HMRC is that, notwithstanding that s195 could potentially be satisfied, consideration must firstly be given to the provisions of s183 ITA 2007. That section requires that no part of the qualifying trade is carried on by a person other than the company or a qualifying 90% subsidiary. In the case of a film or television programme there is a single product that is produced and that film or programme in a co-production has been produced by the activities of more than one party. The consequence is that the trade of a potentially EIS qualifying company is being conducted by another person and so this company will fail the test of s183.
The above will apply whether the production is a qualifying co-production as defined by s1186 and s1216AI Corporation Tax Act 2009 (an official co-production) or an unofficial co-production.
None of the above will affect the entitlement to Film or Television Tax Relief of qualifying co-productions....

Taken from the HMRC website.

not quite like PAYE is it?

"one is a government scheme to help people on relatively low incomes pay for childcare. "

That's what it's meant for.... but it's frequently being used to divert income by some people who are trying to avoid paying tax on their Child Benefit. So quite legal but it technically falls foul of the test whether the mechanism is being strictly used for the purpose it was intended. Arguably therefore it is immoral.

It is sad to see Mners resorting to insult so easily! As a former tax consultant I would like to state that avoidance is legal and evasion illegal. So-called 'loopholes' are legal - obviously - and are soon corrected by HMRC or amended legislation. Rich people who pay huge fees to tax advisors and lawyers get to take advantage of them - for a time.
Sadly it is a well-known phenomenon that the richer you are the rich are mean and the poor generous. Ce la vie
Btw I doubt that someone like Joanne Rowling would choose to do this...

Gordy - the HMRC will accept cheques. Make them payable to HMRC or The Treasury.

And you are factually wrong on the allowance. It is covered twice upthread.

hahahaha okay then how much should I pay - on my £10,000

do you pay it back Voice maybe you will know how much I should make the cheque out for?

Protegoo - JKR also gave a lot of money to a political party -so I would question her judgement over matters fiscal. She can churn out a fine yarn tho

Gordy

You are not required to pay any tax on your first 10k of income. Unless it is dividend income, or a capital gain in which case differing limits apply. Or if you earn over 100k pa in which case that amount will be reduced by £2 for every £1 over 100,000.

If you feel that you want to pay more tax - that is entirely your prerogative. i would argue that it isn't a wise one - but it is your choice.

People who are entitled to benefits should claim every penny they are entitled to. It's irrelevant whether it's "fair" to get what they do, they don't make the rules, it's up to the people who make the rules to make them fairer.

The same applies to tax. People who pay tax are entitled to do everything they legally can to decrease their bill. It's irrelevant whether it's "fair", they don't make the rules, it's up to the people who make the rules to make them fairer.

If people claimed benefits/paid tax according to differing conceptions of what is "fair" we would have chaos. What the law says should be the only criterion.

Tax avoidance isn't immoral. It's only over the last decade or so that politicians have started to try and sell the idea that it is.

Some quotes (selectively extracted from Wikipedia, which also has some that will suit the other side of the argument.)

No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores. James Avon Clyde, Lord Clyde, Ayrshire Pullman Motor Services and Ritchie v. IRC (1929) 14 TC 754.

Every man is entitled if he can to order his affairs so as that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax. Thomas Tomlin, Baron Tomlin, in the UK House of Lords case, IRC v. Duke of Westminster (1936) 19 TC 490, [1936] AC 1.

Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes. Judge Learned Hand, Helvering v. Gregory, 69 F.2d 809, 810-11 (2d Cir. 1934).

But with Gary Barlow it was £340m ? I took childcare vouchers when dd3 was little I think I saved about £100 - and that's a generous estimate- over the year! And that scheme is not open to higher rate taxpayers.

Gary Barlow has done nothing illegal - but the question is what did parliament intend when formulating these tax rules?

That case law is from almost 100 years ago!

Ubik1 - it was less than that - the amount for all the investors was about 340m - and over 1000 people were investing. They invested in 2010 and the HMRC began investigating in 2012. After Icebreaker themselves brought it to the attention of HMRC.

They do have the ability to go back retrospectively - a bit unsporting. Like changing the speed limit to 20 on wednesday and nicking every one for driving at 30 the previous monday.

Parliament intended for people to invest in the music and creative arts. The plan for icebreaker is to provide funds for start up acts. losses (i.e. acts that are duff) can create a taxable loss for the people who stumped up the cash and thus reduce their liability overall. I think they may have got a little carried away ;-)