Remember the discussion about tax avoidance being legal on the benefits thread?

[LadyBiscuit]

I was shouted down by a lot of people who said that it was okay because it wasn't actually illegal and benefit fraud cost the UK a lot more. The HMRC estimates it costs us £14bn a year. Kind of puts benefits cheats into perspective a bit doesn't it?

Of course it's not immoral nor is it immoral to take tax advice from an accountant or claim tax relief no pension contributinos.

Obviously at an extreme view point you would say it's immoral not to hand 100% of your income to the state so it will provide for you.

Or you cuold say tax is theft and is immoral.

Most of us in terms of morals fall between the two areas and probably most of us plump for if it's legal it's fine, if it's not then it's not for tax issues.

So then Ivy I should feel immoral about claiming my refund of tax paid because I earnt less than the tax free allowance last year? I think not.

The tax system is too complicated. If the system was simplified then there would be far fewer grey areas, and fewer staff needed at HMRC.

Some tax avoidance is actively encouraged, such as using your ISA allowance. Some is more questionable, in the same way that purposely living apart from your partner solely to get a higher level of state benefits is more questionable. Both are legal.

The thing pan and ladybiscuit seem to be forgetting is that tax avoiders are already paying tax and may also be providing employment to people if they are a company. Benefit cheats contribute nothing to society that I can see.

I think providing employment is irrelevant. There are plenty of individuals and companies who provide employment and do not engage in nefarious tax practices. I agree that the tax system is far too complicated and simplification would help. But as edam says, I am rather mystified why people are so forgiving when the net loss to the country is equivalent to the cost of national State education. That's a shocking sum.

I don't agree with cheating the benefits system either incidentally but just because you provide employment doesn't mean you're any less guilty if you're caught shop lifting

There is nothing nefarious about tax avoidance. It's not equivalent to shoplifting, it's working the system, admittedly the system needs an overhaul.

Virtually every company that exists to make a profit will be be seeking to minimise their tax bill by whatever legal means possible. It is the directors responsibility to employees, shareholders and customers to keep the company financially viable within the framework of the law.

I get the feeling that those of us trying to explain this to you will never get the message across because you aren't open to the idea that business is anything but 'immoral'. We don't live in a utopian world of full employment, we urgently need more jobs. This is vitally important and not irrelevant at all.

That's not true at all thespindoctor. Did you read the link? It is not tax avoidance I have an issue with, it's tax evasion. As it says in the link. That's stealing, however you want to dress it up.

"doesn't mean you're any less guilty"

Few taxpayers are in the slightest bit forgiving of people who criminally dodge paying the tax due. Some fiddles are extremely common.... the cash-in-hand scam is a very common way to get out of paying VAT on jobs - expect a lot of the missing £15bn sits there. So let's clamp down on that little collusion right from the off. People that deliberately fiddle their expenses or CEOs that cook their corporate books to evade the taxman - just as wrong.

We do not have to be 'forgiving' of people who try to be tax-efficient within the law
because that is a legitimate activity. If Philip Green can save himself a few million by living in Monaco or whatever and it's not illegal under UK tax laws then is he in the wrong or is the law badly framed?

"It is not tax avoidance I have an issue with..."

So the title of the thread was just a typo...?

As I've said, there is a very fine line a lot of the time and the tax law has allowed some people to claim they are avoiding tax when actually they are evading it.

Clearly you think it's a fine and dandy thing to do though so there's no point in arguing with you

I don't think anyone is saying they agree with evasion any more than they agree with benefit fraud.

The point where I think we disagree is that grey area between avoidance and evasion. It is the responsibility of HMRC to clarify and simplify the law, and for companies to operate within it in my view.

"It is not tax avoidance I have an issue with, it's tax evasion."

doesn't exactly balance with
"Remember the discussion about tax avoidance being legal on the benefits thread?...The HMRC estimates it costs us £14bn a year. "

also the idea that working within the frames of a man-made tax system is immorral is ludicrous. Minimising your tax bill is in no way a moral issue.

I think it is a moral issue actually mayorquimby. :)

And that the line between avoidance and evasion is blurred and indistinct and yes that's the HMRC's fault as other posters have said to some degree. On the other hand I have a good deal of sympathy for them when they are trying to stay one step ahead of professionals who try to find a new loophole every time they close one.

Plenty of things are legal but wrong. Marital rape was legal until 1991. I suppose if this was 1990 you pro-tax avoidance types would be arguing that men are perfectly correct to enjoy their legal conjugal rights in whatever way they see fit.

It is fine and dandy to obey the law.

Morally, if morals comes into it at all, HMRC should make the system simpler and less ambiguous, rather than burdening business with high accountancy bills for what should be a relatively straightforward process. Save your sympathy for small businesses that are struggling to survive in this climate.

how is the application of criteria within a synthetic and amoral system in anyway relating to the difference between good and evil or right and wrong?
The tax system is set up and it defines it's own rules. They are not governed by a concept of what is morally right/good, they are designed to be effective as a system of taxation and nothing else. Tax avoidance is a misnomer, it is merely the application of the rules and criteria which the system itself has set in a way which benefits the tax payer in question, however this benefit is not morally created or motivated, it exists already within the system and is just another method by which it can be applied. It has nothing to do with over-arching concepts of morality in the slightest. By your logic then a person using a 2 for 1 voucher is somehow being immoral despite the fact that they have no control over the issuing of such vouchers and such a system exists regardless of their input.

If the tax system is in control of its own rules and criteria then in what way could a person adhering to these rules and criteria ever be construed to be a moral issue?

The HMRC encourages tax avoidance through provision of tax breaks. The HMRC itself is 'pro avoidance'.

As I suspected some of you are on a misguided lefty anti business agenda. I'm going to leave you to it now as I have to go and fiddle my expenses or something. Bye

I did a few rough sums in my head the other day and figured out that my tax obligations account for about 25-30% of my total gross income. As my overheads account for almost all the remaining 70-75% (wages, rent, v high running costs) I am, as I feared, working simply to pay tax. I haven't had any wages for well over a year and work my arse off, as does DH. I have a debtor's list in excess of £120,000 so the tax I am being hounded for has not even been collected in and yet I am supposed to find it from somewhere. If there's any way to cut a tax bill, fair play to those who can find it. As it stands, I employ 13 people who could well be out of work if I don't manage to get my customers to pay up soon (just so I can pay my taxes).
I don't actually mind paying taxes - a successful country is one that can provide a decent standard of living for its citizens, but how about a little help now and again for those (taxpayers) who need it? Maybe if we had a more accommodating system - especially in these hard times - people wouldn't try so hard to avoid paying their dues

"Plenty of things are legal but wrong. Marital rape was legal until 1991. I suppose if this was 1990 you pro-tax avoidance types would be arguing that men are perfectly correct to enjoy their legal conjugal rights in whatever way they see fit."

absolutely farcical logic and a ridiculous statement.

Why so mayorquimby?

because at no point has anyone (or at least the majority have not) claimed that morality and the law are exactly the same thing and so anything which is legal is moral.
Morality deals with overarching themes of good and evil where as the law deals with the rules governing a society. Just because in this case the law and section of posters moral views dove-tail does not instantly mean that their moral views are dictated by the laws, which is what you suggest and is a ludicrous jump of extrapulotory logic.
Most are pointing out that the tax system sets the rules and if you believe that one has a moral duty to pay taxes then they believe that this duty extends only as far as a duty to pay what you owe which is governed by the criteria of the tax system and that calling it tax avoidance or stealing is ridiculous as by definition you are only paying what you owe. They are pointing to the law in this case as the tax system is a completely legal based construct and not a morally constructed system and as such any morality which could be associated with it is associated with adherence to the rules, which in this case support their arguments that "tax avoidance" is merely an adherence to the rules when people saying it is immoral are somehow claiming that they are both at once adhering to the rules but not paying what they owe at same time which is a logical fallicy.
This does not however automatically mean that because they agree with the laws in this instance and believe they reflect their own morals that they also agree with slavery/rape/murder as being morally acceptable because the law at one time accepted such things which is what you have suggested and is as I said before and absolutely ridiculous logical conclusion.

Nonsense. Lots of people have posted on here to the effect that tax avoidance is OK precisely because it's legal. It's not my leap of "extrapulotory" logic.

I know this is a sidetrack, as the thread is realy about tax avoidance not benefits -

but if someone 'works' the benefit system, by moving out from their partner's home to live down the road with their children, and claim single parent benefits, would that that illegal or immoral or neither?

Someone I know did this - in order to fund her PGCE (she was able to claim housing benefit whilst living apart for the duration of the course, but couldn't afford to give up work & pay her share of the rent whilst they lived together.)

I don't think she broke the letter of the law, since they really did live apart, albeit a few streets away - but she probably cost the state a few pounds more than someone on the dole doing a cash in hand job for a few weeks.

It's neither illegal (as far as I am aware) or immoral surely. People are perfectly entitled to arrange their own affairs to achieve optimum financial benefit. In this instance actual lifestyles have been changed to reap the financial benefits so its hardly a case of routing income offshore or engaging in uncommercial circular transactions to get a tax advantage (as some individuals/companies do).

It's a little like Philip Green and Monaco. If she's prepared to go to the lengths of splitting the family into two separate properties etc., and if she sticks to the letter of the law then she's simply taking advantage of a loophole. If she were claiming to live elsewhere but was all the time really living with the partner as a couple, that would be lying and therefore she'd be acting fraudulently.

Tax avoidance is legal and morally right. Tax evasion is illegal and morally wrong.

Being more clever than someone next door who doesn't bother to claim both tax allowances or doesn't know you can set your charitable contributions against tax doesn't make you immoral.

Indeed we have obligations to feed our chidlren. If because we are brighter than others we can ensure within the law we have more money to fulfil our personal responsibilities rather than let Governments waste our money on the army and even the feckless poor then we are morally better than the idiot next door who doesn't work within the law to minimise his tax bill. The moral high ground is arguably with those who within the law minimise their tax bills.