If the coalition really want 'savings', why do they ignore the £40bn a year in tax avoidance...?

[LadyBlaBlah]

Bearing in mind that benefit fraud (feckless scrounging wasters) and error costs us £5.2b, why the emphasis on this, rather than tax avoidance?

Because the people who are either avoiding or evading paying huge amounts of tax are the people who are more likely to vote Conservative?

I don't know that credit agencies are used to snoop on benefit recipients, I have no knowledge of that, but the government does take action against tax avoiders and evaders - that is why there is a compliance department in HMRC. They collect tax through processing and also raise enquiries and interventions into evasion and avoidance.

There are entire offices set up to deal with new avoidance schemes that are entering the market all the time, although I believe there is less avoidance work generally at the moment as companies/taxpayers have less cash and are far more prone to losses due to the recession.

There are literally thousands of government workers who investigate taxpayers, companies, employers, to ensure that the correct tax is being paid. £435 billion was collected by HMRC in tax during 08/09. £400m of this was collected in underpayments - payments that wouldn't have been made apart from the intervention of HMRC. I'm afraid I can't find the figures that have been brought in my benefit investigation

In regard to benefits and tax credits, of course these are also pursued if they are claimed fraudulently. But the double whammy is that not only are people paying nothing into the system in tax when they are earning money and not telling HMRC so therefore their benefits do not decrease, they are also taking money from the pot that is meant to help those in need. So effectively they are taking twice.

I think both benefits and tax need to be looked at and of course any fraudulent activity of either should be dealt with. But I say again, I just don't see what else can be done.

I do seem to have gone on a bit. I won't blame you if you've nodded off

There was a labour government for the last thirteen years, so what would their excuse be?

Good point Humphrey

Ahh, I thought I was being a bit narky

Bertie and LadyBlaBlah are being very impressively clever though

Its the way its done Humphrey. The rhetoric, the narrative and the assumptions made, which for example, tends to spill over to include anyone claiming benefit. Furthermore, their whole being is consumed by "cut the deficit", " what a mess we are in", "we are close to disaster like Greece" "everyone will feel the pain".

If that were their ideology then it would make more sense to spend at least some after the £40bn a year in tax avoidance. They only need to get a very small percentage of that and it is more than they will get from spending a disproportionate amount of time on benefit cheats.

Bertie - I think there is a lot more that can be done..............they haven't even mentioned it fgs!

I agree that they should do both.

We are in an awful bloody mess though.

I don't agree that the implication is that everyone on benefit is assumed to be dodgy though.

Neither do I

But I am amazed everyday by the number of people I meet who think that they are

but there are tossers everywhere, I meet daily mail reading ones and guardian reading ones.

ill informed opinion exists on both sides of the political divide

They say it's because closing these loopholes will scare off the super rich. But the tax laws in the US are such that you must report all earnings from abroad no matter what, you can't even renounce your citizenship and get out of it for 10 years after that.

And there are still plenty of super rich.

Dh says there is no difference between 'tax mitigation' and 'tax avoidance' except that they used the word 'mitigation' in meetings.

'evasion' was doing things illegally.

'avoision' = legal but borderline
'evadence' = borderline but illegal

arranging ones finances in a tax-efficient way is perfectly fine (the tax system is, after all, fiendishly complex)

there is much out and out fraud however - and it is bad that if you commit such a fraud and pay it back, they'll probs not take it further than that (whereas benefit fraudsters would face jail).

When the government slashes public sector jobs, it'll be interesting to see whether they get rid of the people at HMRC who are paid to keep up with the rich, monitor and close tax loopholes.

LadyBB's right that the public debate is dominated by outrage at 'benefits cheats' while tax avoiders get away without a mention and there's barely any scorn directed at tax evaders.

Think it goes something like this:

• Working class person who costs the state money by overclaiming benefits = evil threat to society and public enemy.

• Middle class person who costs the state money by getting away without paying their fair share of taxes = fine and dandy.

• Rich person who pays less tax than their own cleaner = must be propitiated, my God, if we ask them for an extra tuppence ha'penny they might leave the country in a fit of pique.

OP, because they are nob ends.

But they do not see themselves as nob ends.

Do you think the Queen and the 'royal' family see themselves as scroungers or feel bad or guilty for taking state subsidies when they can afford otherwise?

You see, this is the rub. How Cameron sees himself as 'middle class'?

How does he come by such a belief, if it is not a lie and I give him the benefit of the doubt that he believes this genuinely?

Where did he get this idea?

I do not want to believe he is a bad man, but a misguided and clueless one.

Despite my innate cynicism, I do not like to think he truly cares nothing for us, the working poor, or for my children, the product of this.

But the cynic in me does, because I have seen such in my own area.

I want to believe he might listen, but I know he hasn't by now.

Edam, tax evasion isn't confined to the rich.

How many times has a tradesman offered to do a job 'cash in hand' for you?

In the last six months I have had that offer from a plumber, a gardener, a taxi driver and a decorator.

The notion that the government turn a blind eye to tax evasion in order to protect their wealthy supporters is rather short sighted.

Look at the non-doms and the House of Lords. Our dear leaders sure DO turn a blind eye to tax evasion by their wealthy funders. I give you Lord Ashcroft. Who has been making the laws you and I have to pay, including setting tax rates, while not paying full UK tax and lying about his tax status. If a benefits claimant behaved in the same way, they'd be prosecuted.

Tax evasion and avoidance is NOT practised by the poor - they can't afford financial advisers. It's practised by the relatively well off right up to the super-rich.

Things the poor do that limit government receipts are condemned. Things the well-off and rich do are treated as sensible and praiseworthy. Clear double standards.

(And I don't imagine many benefits claimants can afford to employ gardeners.)

But tax evasion includes those on benefits who are earning money that they are not declaring. They are evading paying tax and NI that is due.

Avoidance I agree tends to be an expensive business.

It is unfair that the government appear to be scared the rich will take their money elsewhere, particularly when as we have said these people are practising avoidance. This is not something due to the present government however, this has been going on for decades. I'm not sure who will be brave enough to tackle this, as it does stick in the throat I think of every rightminded person.

I agree that the public act quickly to condemn benefit cheats. However it is often seen to be okay to cheat the tax man, there is a definite attitude of "I pay enough already" and some people do regularly evade tax. Who hasn't paid or been offered a reduced price for cash in hand? And that does include people on benefits in some instances I'm sure.

Unless you are very wealthy in which case the public think you should pay what is due. By the way I think everyone should pay what is due within the laws of this country.

I have said above that benefit cheats, if working, do take from the "pot" twice which I find particularly hard to stomach.

But I can't agree that the government does nothing to stop avoidance. Perhaps they do need to raise it into the public consiousness more, to make it less palatable and more of a crime.

I appreciate that this does sound as though I am a Tory supporter and I'm not. I just don't think it is helpful to say something needs to be done, without offering ideas on what CAN be done.

I second both Edam and Techlovingdad's explanations

techlovingdad was pithier...

earthworm not all tradesmen do work 'cash in hand' to avoid paying tax. My DH prefers to be paid in cash so as not to have huge bank charges (or is that bank charge evasion?). It doesnt matter beause it still goes through the books. I know because I do the books.

What can be done?

Prosecute a few

Send out a message that it won't be tolerated in order to change the culture

Do everything they are doing with benefits fraudsters e.g the credit agency collaberation

Be honest about Ashcroft

Anything really

avoidance is legal. paying a tax advisor to organise your/your companies finances to best effect is sensible if it saves you cash. In the same way, spending time on the benefit caluclators online is also fine (or indeed, getting advice from fellow Mumsnetters), to ensure you've claimed all you can. Either way you are behaving in a legal and decent fashion.

fraud however is not OK, and there is plenty of fraud going on out there.

I suspect few of us know landlords who pay income tax on their rental incomes? (less 10% allowed, mortgage repayments are not deductable) ....just one potential personal-level fraud....

The small amount of tax evaded by small businessmen i have no doubt is vastly outstripped by that evaded by larger companies (they have, after all, more turnover to evade with..)

and with things tight for many businesses the motivation to commit fraud is much stronger than in previous years.

the problem i think is that company tax frauds can be very difficult to detect, as HMRC check paperwork but not whether reality matches that paperwork (unless they already suspect something is wrong). They rely much on being tipped off.

England - the Guardian tried to work out how much tax Tesco pays compared to what they actually make. Got into rather hot water IIRC.