The Super Rich

[malificent7]

I watched two tv programmes on them last week. Many living in one of their many opulent palaces all saying they didnt think they should be taxed more.
Then all the news about off shore tax evasion. If i dont pay my taxes i get a court order from the council while i sit in my tiny rental.
Aibu to feel a tinsy bit annoyed? Nothing will change though will it?
Perhaps i nedx to work harder.

faithless well put and I agree.

adviceplease, so tax avoidance is ok depending on the cut off? What number do you suggest? And for the last time long standing anti avoidance measures must notably s86/s87 tcga 1992, s13 tcga 1992 and the transfer of assets abroad provisions will prevent uk res/Dom individuals avoiding uk tax by simply moving assets abroad. Unless you know better. And it will be a lot more than 10,000 people.

Good post Faitless

You feel tax avoidance is good. Many, however, understand the link between social expenditure and a well-functioning society

For some people their behavior is based on the belief that funding should be based on the law and not on voluntary donations. It is perfectly possible and not in the least hypocritical to minimize your tax bill while voting for tax increases.

Do you really think government funding should be based on voluntary donations? If not, the way to address tax avoidance is to tighten the law, not shame the more reluctant contributors.

Could all the people who have made voluntary donations to HMRC say how much they gave?

Wealthy tax avoiders benefit from:

• stable societies, which cost significant amounts of money in terms of police and armed forces and the costs of functioning democracy
• a workforce which is educated
• a workforce which has good healthcare, housing and public services so doesn't demand higher pay
• a workforce which is subsidised from the public purse to allow it to exist on low wages
• public infrastructure to allow transport of goods, services and workers (roads, broadband, reliable electricity etc)

Countries with v low/no corporation tax and income tax do not, generally speaking, have these things. Everyone could not do what these tax avoiders do and have these things.

So the question is why are we facilitating systems that enable them to avoid tax in this way, and shift the burden onto others.

In reality, what is happening is v different from tax planning- if there is a tax incentive to encourage me to pay into a pension, it is because the government thinks it will benefit them for more citizens to sort their own pension entitlements. If I instead find a way to play the UK pension rules against the Cayman pension rules and move all income through the pension and out again without paying tax (not possible, but an example) then that's not tax planning, that is exploiting an incentive that exists for one purpose for another. Often, when governments realise this is happening, they then change the rules but with the secrecy they often don't find out.

This is an issue people need to lobby hard on- change is possible, but for now
Most people don't feel they understand it enough to act.

I just hate all the hypocrisy around this topic.

www.telegraph.co.uk/finance/businesslatestnews/9668396/Margaret-Hodges-family-company-pays-just-0.01pc-tax-on-2.1bn-of-business-generated-in-the-UK.html

www.independent.co.uk/news/business/news/guardian-media-firm-makes-186m-but-pays-only-200000-tax-8675818.html

www.telegraph.co.uk/news/politics/10294973/Unite-the-union-paid-no-tax-in-2011-and-2012.html

People should just pay their tax and govt should just work to close down loopholes that allow for tax evasion - tax planning is legitimate and legal (ISAs, pensions, gifts to your children with the 7year rule, deed of variation to reduce inheritance tax etc etc). I don't see a problem with people investing overseas out of post tax income - isn't that legal?

But tax evasion is an international problem - and a consequence of globalisation. Sorting it out relies on govts working together and imposing the same rules to prevent companies and people being able to arbitrage different countries tax systems....never going to happen.

*Wealthy tax avoiders benefit from:

• stable societies, which cost significant amounts of money in terms of police and armed forces and the costs of functioning democracy
• a workforce which is educated
• a workforce which has good healthcare, housing and public services so doesn't demand higher pay
• a workforce which is subsidised from the public purse to allow it to exist on low wages
• public infrastructure to allow transport of goods, services and workers (roads, broadband, reliable electricity etc)*

^ this, agree

I can never get over how people can with a straight face accuse tax-avoiders of being selfish, when by doing so 99% of them are in effect asking for someone else's money to be given to them.

People actually think that seeking to take money away from the person it belongs to makes them look virtuous?

(I would take the money, up to a point, but I would apologize to the people I was taking it from, saying something about the necessity, and reassure them about how well it would be spent.)

I just hate all the hypocrisy around this topic.

So do I. I hate the people who boycott Amazon and Starbucks but happily pay to go to pop concerts, premier league matches, etc. I hate the teachers and GP's who indulge in their own tax avoidance when it suits them but preach to everyone else to support state funded services!

puppy, true and the Government is working very very hard at the moment in trying to stop that evasion including all those measures I mentioned above.

The state can also change rules where it wants to - eg the 7 year inheritance tax rule might become 15 years or we might instead tax gifts from parents to children during life time.

Tax planning as you say is not unwise. In fact it usually means people are caring for their families.

I would support abolition of all tax relief for contributions to charities by the way as I think there ia a lot of large scale tax evasion hidden away in that tax break we could well do without. In fact I would not mind removing all tax reliefs from pensions and pension contributions too and just reduce tax rates overall.

I wonder if any form of tax avoidance was made illegal but anyone living here or had their business or company HQ here paid a set amount of tax . Eg 10% or 4%.
On everything no matter the amount earned. Would we end up with more money.

Hypocracy is a red herring.

Install a progressive tax regime, focused on wealth, and inact clear simple rules.

It would be a system where all needs are met before extreme accumulation could occur.

Why, may I ask did you deliberately choose to invest in a tax avoidance structure (an ISA) rather than a normal savings account?

Because the government was trying to encourage people to save. I think you are being stupid to try to argue that investing in a Government scheme is anything like in the same league as paying lawyers and accountants to move money around.

Firesuit, please see Puppy's post above yours. Many businesses draw on benefits funded by the state in order to make profit in the first place. They should pay for the services they have used. Tax demands could be viewed as invoices for these services delivered by the state to enable businesses to function. They owe the money back to the state, as they do to for raw materials , gas, electricity, rent on business premises etc.

Tax demands could be viewed as invoices for these services delivered by the state to enable businesses to function.

Absolutely.

Peregrina, so if some of the companies top brass take part in a share option scheme where they will pay say 10%tax rather than 47% tax/nic they would have done on an exit bonus is that ok? It’s a scheme designed to encourage investment in employer businesses by government. Or what about the bow defunct employee shareholder status which had similar reasons with no tax. Nearly all tax benefits are meant to drive behaviour.

As mentioned, the law allows this large scale tax avoidance. So vote for a party that will change it.

Given that the party that promised a badly needed tax rise didnt do well, I doubt it will ever happen.

"It would be a system where all needs are met".

Or a system that ran out of money when the rich did the maths and worked out they'd be better off elsewhere?!

Or a system that ran out of money when the rich did the maths and worked out they'd be better off elsewhere

Again, they have benefited from all these things. You are suggesting that they know this and prefer not to pay. Is this what you are suggesting?

Iwanttobe employee shareholder status was dropped because it wasn’t being used in the way intended - it wasn’t being used to encourage the every day employee to become ‘invested’ in the business, it was just being used as a tax planning tool by the already interested and wealthy directors of the business

Yes, make. Of course it is. Do you really think the super rich don't know how others live? Even if they use advisers and don't think about it, or don't know much about where their money is, they still know they have advisers and they are paying for "tax efficient" advice.

That's why I personally wouldn't waste my breath preaching about socialist models that sound awfully like 1950's soviet Russia. I would put that energy into pressing hard on the moral and ethical side of not paying and what money that the super rich wouldn't even notice could achieve.

about socialist models that sound awfully like 1950's soviet Russia

I have not read on this thread a call for the end of private property nor profit.

Do you really think the super rich don't know how others live?

I am quite convinced that a significant majority of the rich have no idea of how others live, or what it's like to live in poverty year in year out.

Because the government was trying to encourage people to save. I think you are being stupid to try to argue that investing in a Government scheme is anything like in the same league as paying lawyers and accountants to move money around.

Most of the tax avoidance schemes start from such a govt initiative though. Take the film partnership schemes which caught out a few pop stars. Govt introduced tax breaks for investors to make films in the UK - so the scheme promoters set up schemes to use those reliefs. If Govt made tax simpler, there'd be far less scope for tax avoidance schemes in the first place.

when by doing so 99% of them are in effect asking for someone else's money to be given to them.

No they aren’t