Only the employed seem to pay tax?

[Taxevasion]

This is annoying me. Met a person recently that owns a lot of property (multi-million) that is let out in various ways but doesn’t pay any tax. Whatever they do is legal but the fact is they don’t pay tax so don’t contribute to the costs of running the country.

So am I being unreasonable in thinking this is very unfair? It seems that only those of us who are employed and pay tax paye fully contribute.

@Elieza

Were Starbucks and other companies not getting away with paying practically no tax?

Something to do with offshore accounts and payments in dividends has helped many too I think.

Basically if you’re minted you can pay expensive accountants to legally do all they can to minimise your tax bills.

The regular people can’t do that.

Here is a very simple example (probably unlawful now but it gives the gist).

BigCo operates in the UK. It makes £30 million profit in year x.

(Say it operates in various other countries too)

BigCo's is owned by BigCo (San Serif) Ltd, a company incorporated in a little-known tropical islet.

Each year, BigCo (San Serif Ltd) charges BigCo a management fee. That fee is - guess what? - equal to BigCo's annual profits.

The result is that BigCo has no profits to tax, therefore no income tax to pay in the UK.

It will have income tax to pay in San Serif, but the rate there will be 0.001%.

Nothing actually happens on San Serif.

The point of the arrangement is to transfer profits from high-tax to low-tax jurisdictions.

It's very, very, very hard to prevent this sort of thing. I wince when I read some commentator or politician say "let's close all the tax loopholes and make everyone pay". At best it's whack-a-mole.

In my view we should be looking into relying on income tax and sales taxes less, and wealth taxes more (I don't mean CGT but an annual tax on wealth).

And then you have the social media giants, who are even more problematic. They are unlike BigCo in that they don't really do anything in the UK, or any country other than the US, where they have their operations. It's just that their services can be accessed over the Internet by people anywhere, resulting in profit from advertisers who are probably also located elsewhere for tax purposes.

So under existing tax principles they don't get taxed in 99% of the countries where their services are available and the US has been very resistant to changing this.

Shocking news, people who have money use that money to first create loopholes in the tax laws and then use them. Well, now we are waiting for the shocking investigation into corruption in the United States. I think taxes are very complicated and tricky. So if you are trying to find a way to get rid of them or try to pay less, most likely, you will not succeed. Especially in this area, it is better to consult an expert or have someone who can help you with pay stubs or how to make pay stubs. Of course, the market is full of offers, but you can find some great platforms if you do your research. I haven't done any calculations myself for years because of the platform I used.