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Is it legal

102 replies

newwave · 16/02/2011 16:28

Myself and others have posted items which detail tax avoidance and other money grabbing schemes, I am aware that people from all political parties (and none) do this.

The thing is that it appears to be only the Tories on this site that think this is ok because it is legal and nothing else matters. Others from the left seem to understand that it may be legal but is is also immoral/greedy/unfair etc.

Francis Maude is a prime example, he used the rules to aquire public money but how can anyone defend him as the Tory posters have done, what he did was within the "rules" but it was just plain greedy.

Still "we are all in it together" says "offshore Gideon Gekko"

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complimentary · 19/02/2011 12:20

Quattrocento. LOL at 'tax illiterate thread'.
Yes someone must set up a thread. 'Is it morally acceptable to avoid paying tax?' It is not illegal, so some of these posts are talking about morals and nothing else! Which are subjective anyway! I do find it informative though, and Cinnabar posts some good information. Grin

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Mellowfruitfulness · 19/02/2011 13:03

Agree, Paul (again). Smile

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Chil1234 · 19/02/2011 13:17

@Paul88 I don't resent paying tax but I do resent the implication that somehow I should be thrilled at the privilege of paying tax because it finances all the marvellous things I enjoy as a resident of the UK. As I've said before, it's just another bill. I pay it because, if I didn't pay it, I would be fined or imprisoned... not because I find it a thrilling privilege or because I'm motivated by altruism. I pay my gas bill so that I don't get the gas cut off. I pay my credit card bill so the bailiffs don't come round.

I think I'm fulfilling my social obligation as a taxpayer by paying my dues. However, I don't intend to pay a penny more than I'm legally required to pay and am quite sure that I am not alone. The idea that that makes me or anyone else with the same approach a bad person, I do not accept.

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siasl · 19/02/2011 13:51

Paul88.

Shock horror! Barclays knows how to use it's losses and set them against profits in future years.

Next you'll be telling me individuals can do the same with their CGT gains & losses.

Oh wait...

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Paul88 · 19/02/2011 13:54

@Chil1234

I too don't pay more tax than I have to. If I wanted to give away money on the whole I would choose where to give it - probably a local project - rather than give it to a government of any hue.

However when you get to the super rich - lets say £200K pa plus - the game changes a bit. They have so much to gain by playing games and although it won't solve the deficit issue in the face of that issue it feels wrong that they are taking advantage of these loopholes.

The solution, as well as naming and shaming such individuals, is to close the loopholes. The attitude of this government is that they would rather keep the loopholes. They say people will leave the country - I think that is not true; after all it is not as is they won't still be able to live comfortably here.

Given the make up of the current government it looks as though they are looking after their friends, and themselves, and their own futures, rather than acting in the country's best interest.

It is true that the previous government didn't do enough, and didn't do it soon enough - they were too afraid of being attacked by businesses and made to appear anti business.

But now "we are all in this together". Lets close some loopholes, lets name and shame businesses and super rich individuals who are
going too far in their tax avoidance strategies.

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siasl · 19/02/2011 13:59

Paul88

First, £200k is hardly super rich, clearly you have no idea how much houses cost in London!

Second, why do you presume people who earn £200k plus are all tax evaders/avoiders? At £199k everyone has morality but that just vanishes at £200k ... how daft.

Third, why do people who earn £200k have less rights to privacy than someone on £20k?

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jodevizes · 19/02/2011 14:00

Tax avoidance may be legal but it is morally indefensible. If you are rich enough to need this, you are rich enough to contribute a bit more to the country that has nurtured you.

I personally will not be using Boots unless I am in Switzerland and I think everybody else should do the same.

I think we need a list of companies that are avoiding British taxes so that they have to rely on the sales of the country they have chosen to hide in.

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IShallWearMidnight · 19/02/2011 14:13

You don't need to be rich to use a tax avoidance scheme! Anyone who has an ISA is avoiding tax, anyone with childcare vouchers is avoiding tax, anyone ticking the Gift Aid box is colluding in avoiding tax (if you are a HR tax payer then your avoiding tax yourself)
And no, accountants and tax advisers aren't just for the rich - my least well off client earns around £10k a year

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rabbitstew · 19/02/2011 14:39

I see absolutely nothing to criticise in people discussing morals, whether there is such a thing as a moral absolute and to what extent our own morality should be guided by the State. What is your politics, after all, if not a reflection of your personal opinions, guided to a certain extent by your own moral code? If people are morally uncomfortable with the way the tax system is being used at present, that is a perfectly valid subject for discussion. If people feel that the banks having been bailed out created an entirely new precedent with which the current legislation is not fit to deal, then that is a perfectly valid political issue for them to discuss, also, albeit I don't think it was actually being discussed on this thread until those who want to close down all such discussions weighed in.

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CinnabarRed · 19/02/2011 15:12

ISWM - none of the things you mentioned are tax avoidance because they are used in the manner the policymakers intended at the outset - to incentivise savings (ISAs), employment (childcare vouchers) and charitable giving (gift aid). Those are all examples of morally acceptable entirely legitimate tax planning.

Tax avoidance would be if you could somehow channel savings into a non-ISA vehicle but still benefit from ISA relief without contravening the letter of the law. Tax evasion would be forging ISA forms to get tax relief.

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CinnabarRed · 19/02/2011 15:23

BTW, I know I owe replies to some specific questions - I'll be back tonight.

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Paul88 · 19/02/2011 15:26

@siasl

"£200k is hardly super rich"

That is over 10 times average earnings. Well over Dave's salary. What measure would you use?

Please don't think that I am saying everyone who earns over £200k is avoiding tax. Just
that it matters more when they do.

And I don't think the privacy issue is simple but as someone said earlier in the thread they have a different attitude in Sweden and everyone's tax returns are public.

@IShallWearMidnight

Again - you are right; many of us avoid paying more tax than we have to. And some loopholes are put there intentionally, for example to encourage us to save and to give to charity. There is nothing morally wrong in this.

But when the super rich - wherever that line gets drawn - take advantage of these loopholes to the extent that they do and end up paying less tax than their share, we should get upset about it and we should demand that the rules are changed.

Should someone who is a company director be able to pay themselves £200k via dividends and contribute less in tax than a head teacher on £100k? (that is a rhetorical question - no I haven't done the sums so I don't know the exact figures but the bottom line is they can take home more and pay less tax and that is not a fair system)

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Mellowfruitfulness · 19/02/2011 15:36

It's clear that small businesses are having a really rough time at the moment. I know a street where at least seven have closed or are closing in the last couple of months. In the same street, in the same quarter mile, there is a Waitrose, a Marks and Spencer's and a Sainsbury's just about to be built. It's because the rents are so high, they tell me.

It does seem unfair to ask the small businesses to forgo the money they could make by avoiding tax, and to start obeying the spirit of the law, when the big boys have got where they are now by doing just that. But at some point this has to stop. Cameron's Big Society is a direct result of councils not being able to raise enough tax to pay for services.

Local businesses might be looking on, thinking that there will be opportunities for them to pick up contracts when they are all divvied up to 'the community', but that won't happen, because the huge multi-nationals will get there first - just as they have been doing for the last forty or fifty years on local high streets. All the so-called 'community'-led initiatives are in effect just opportunities for global companies to dive in, as they will be the only ones who can afford to offer the most competitive tenders.

I know I'm rambling on, but I am trying to come to the point. I do happen to believe that we are all in this together. I don't want a Macdonald's hospital or a Tesco's school. But the only way to keep them out is by people paying their taxes so the government can afford to pay for our services. That's what I'm trying to say.

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IShallWearMidnight · 19/02/2011 15:40

CinnaBar I agree, but the various threads on this at the moment are implying that not paying the maximum tax you could if you are "super rich" is immoral while at the same time conveniently ignoring things that the less well off can do to also pay less than the maximum possible tax. It seems to be one set of standards for everyone richer than yourself and another set for "people like us"
(that's a generic "yourself" btw and not aimed at you obv!)

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Mellowfruitfulness · 19/02/2011 16:17

Just reread my post. I'm not implying that the financial crisis is all the fault of small businesses - hope it doesn't sound like it.

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rabbitstew · 19/02/2011 17:44

IShallWearMidnight - the super-rich would be better off not investing in ISAs, given that these generally offer far worse rates of interest than they can get by investing their money elsewhere (even after tax). ISAs were not, after all, designed to attract rich people, but designed to encourage the less well off to save a bit more so as to be less reliant on the State as they get older, and to encourage people who wouldn't otherwise be involved, into the stock market. As for childcare vouchers, it is impossible to find a totally fair cut-off point where people above a certain salary shouldn't get them, because that creates some injustices at the margins. However, their primary purpose is not really for people who can easily do without them. I, personally, would definitely claim them if I felt it would really benefit me in the way intended (eg make it financially worthwhile going back to work rather than staying at home), but if it was a drop in my financial ocean, I would feel like a bit of a fraud to get the money just because I could. I therefore would choose a point, according to my own moral compass if that differed from any State-enforced cut-off point, when I would stop using them. I would seriously resent the State creating the moral compass for me, but would at the same time be disappointed by people whose moral compass on this appeared to fall an incredibly long way from my own, because that is how personal morality works - it tends to judge others by its own standards... And as for Gift Aid, I only ever viewed this as an advantage to the charity. I have no interest whatsoever in any personal tax advantages it may bring. In other words, I do think there is a moral difference in some cases between less well off people using legitimate tax saving devices and extremely well off people using the same devices, but that it is a very personal view which cannot and should not be legislated for and I understand that others do not feel at all the same way on this and will think me foolish for seeing things in this way.

And finally, I think anyone using tax avoidance schemes, where there is no way you could argue you are doing what the State originally anticipated or wanted you to be able to do, is doing something potentially, if not actually, immoral, and should not be done with an entirely clear conscience just because it can be done.

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TheCoalitionNeedsYou · 20/02/2011 07:40

'Super rich' is clearly a term that is relative to other rich people, not the average salary. If we take 'rich' as the top 1% , then to be rich relative to that you need to be in the top 1% of that.

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rabbitstew · 20/02/2011 08:16

Of course super rich is a term relative to other rich people. I think you are rich even if you aren't in the top 1%, though, but heaven only knows what percentage of people I, personally, would view to be rich... it's all very personal, and I think my view of what a sufficiency is is likely to be more puritanical than many others', but probably also less so than others'! So, most peoples' "personal morality" (if that's what it really is) is very self-centred (unless they're saints)! That's why you can't legislate for it. I'm 100% certain, for example, that what I consider to be enough for myself and my family is more than every person in the entire world could hope to dream of, so in that sense, I want more than my fair share.

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Chil1234 · 20/02/2011 08:28

I have a feeling that often this boils down to the difference between incomes judged by PAYE and incomes that fall outside the system

Anyone on PAYE has very few opportunities to pay less tax. Even when you get into the 10 x & 20 x average earnings bracket, if you're still on PAYE you're no better off in the tax avoiding stakes than the person on average income. If you're self-employed the picture changes instantly because you can offset business running costs against your income and pay tax only on the profit. And if you're a millionaire director of your own company, your income is part cash, part shares & you can afford to live outside the country or pay a team of clever accountants then there is even more scope.

My feeling is that, if PAYE didn't exist and we all were responsible for submitting our own tax bills, many more people would find legitimate, creative ways to avoid paying the full whack.

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rabbitstew · 20/02/2011 09:37

Yes, I'm sure a lot of people do find others' tax avoidance annoying more because they can't do it themselves than because they wouldn't do it themselves. Most would still rather the relative security of being an employee than a small business owner, though. I guess what grates for most people is the power that comes with size. eg a large corporation that has taken over all its little competitors is no longer taking the risks that smaller ones were, so cut-throat business practices and aggressive tax avoidance schemes in a larger corporation seem more like bullying tactics and taking unfair advantage than survival tactics. But then there are supposed to be laws to deal with monopolies, etc.

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rabbitstew · 20/02/2011 11:53

So, when it comes down to it, we have a system which attempts to harness human greed in a positive way, but which doesn't seem to be providing a very good harness at the moment. People are very poor at regulating themselves, it would seem, and dislike the inflexibility of other people setting the rules. And it's hard to set an agreed point at which greed is becoming too great, because greed is greed - it's not supposed to be a good thing from a moral perspective in the first place. That's why we like to translate it into the concept of survival of the fittest, skewed into ensuring the survival of those who mean most to ourselves regardless of their strength, skewed into making sure those who mean most to ourselves are as comfortable as possible, skewed into taking unfair advantage of a situation for the benefit of ourselves and our own. We all ought to admit that it is actually greed that gets people into a far better position than everyone else around them, because extreme wealth has nothing to do with basic survival.

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rabbitstew · 20/02/2011 11:59

And, of course, that greed is not confined to the extremely wealthy - there are plenty of greedy poor people and all the people in between. That there are lots of greedy poor people around, who aren't clever enough to be greedy rich people, doesn't excuse greedy rich peoples' behaviour.

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newwave · 20/02/2011 14:08

Who is rich?

From a personal point of view I think:

Under 25k = poor

25 to 50k = or

50k to 80k = well off

80k t0 150k = bloody well off

A gap now, one million, that should be more than enough for anyone.

Above one million = fucking greedy shits.

Caveat one, if you have started a business and employ people on good wages then over one million is probably fair as you a providing a social benefit.

If your a banker then a rope and lamppost would be a better solution to their sickening greed as they are a social parasite :o

Caveat two, of course I am not allowing for the amount of dependant kids and mortgage level nor where you live in the UK.

In my case we have a joint income of 82k to 90k depending on certain factors. I have no mortgage.

I have comfortably sent two boys through uni.

I feel I am very well off.

As said how rich you are/feel is relative but any decent person can see a level above which is unacceptable.

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newwave · 20/02/2011 14:14

Did anyone see a TV program last year (Panorama I think) which showed that the CEO of a large company was paying less tax as a percentage of his salary/bonus than his office receptionist by using tax avoidace methods not open to the receptionist.

When he was asked to justify this he avoided answering. It was also said only the senior managers in the company got bonuses and free private medical.

Self serving scum or what

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rabbitstew · 20/02/2011 15:19

newwave - I would definitely classify you as bloody well off and agree strongly that the huge gap between the bloody well off and the "fucking greedy shits", is obscene and unjustifiable. People that well off are not THAT useful to us. But taxing the money out of the hugely greedy to a point where they are not quite so obscenely well off in comparison the next group of people, isn't going to happen in the near future, not when there isn't a more reasonable consensus within society as to how the money should be spent. I think there are too many divisions amongst the less well off with respect to who should be provided with support, and how, within our society.

Of course, lots of us would like the board members of hugely successful companies (which more often than not they did not build up from scratch themselves) to turn their ridiculous bonuses into higher salaries for very low-paid employees, or tiny bonuses for everyone, or money for ploughing back into the business itself, but greed dictates that these people think they deserve their bonuses and deserve their golden handshakes when they mess up and move on. And they think they deserve their bonuses not because they really think they are that much more brilliant than their salary already indicates, or adding that much more value to the business all by themselves without the help of all the poorly paid people who work underneath them, but because they are mercenary enough to say out loud and in public that if they can't squeeze that much money out of everyone where they already are, they are certain they can squeeze it out of someone else.

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