Tax avoidance in the news

If somebody came to you and said - "I can set you up on a scheme where you will pay 1

  • "No thanks, I like to pay my taxes to ensure the country runs properly"

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cambsno

cambsno

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Simon
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First of all, let's try to be non political!

Jimmy Carr and others are in the news for a k2 scheme which means they pay little tax. The PM has jumped up and down about this being morally wrong and unacceptable which I find hilarious. Carr and the others are not breaking any rules, surely the government should just close loopholes if they don't like it. There is nothing wrong with tax avoidance, if self employed you can claim loads back like use of a room in your house, pay for broadband (even though some will be personal use) etc. some claim that, some don't. There is advice on here in the business section suggesting people use accountants and any costs will probably be offset in less tax being paid. If your employer said to you they can make you better off by paying you in a legal but different who would not do that? My wife and I use childcare vouchers to minimise on tax.

I just find it pathetic that the PM (who while making cuts think its fine to increase foreign aid while we are in recession, think its fair to rip the motorist off and will not let the British people decide on eu membership - all of which I find morally wrong) is having a go at people who are doing nothing wrong.
 
tax avoidance is currently legal

tax evasion is a very different story....



I am pretty sure many medium to very high earners, make full use of certain loopholes... to avoid paying tax...
 
When the new General Anti-Avoidance Rules coming to force Jimmy Carr and his like will be screwed :)

If were lucky the collation will listen to the liberals suggestion of a minimum percentage rate for tax on income, lets stop top earners paying a lower rate than the people who clean for them.
 
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Headless Lois said:
pffft, Call Me Dave should look at his mates before he picks on randoms celebs

A
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Apart from the fact it was the times, DC is damned if he does and damned if he doesn't.

People moaning because he has said something and what would all those rich Labour chaps be saying if he didn't.
 
So, you're all fine with extremely rich celebs not paying their fair share of tax? You're all happy to pay more tax to cover it are you?

Whilst Mr Carr is earning millions of tax free pounds we are all having to pay more and more, and as Mr Cameron said, we all save up our hard earned money so we can go to see his shows, he pockets this money and doesn't pay any tax on it.

It may be (currently) legal but that doesn't make it right. Whereas I am fine with minimising taxation to a point there is a line where it becomes wrong and in this case (and many others) I think Mr Cameron is right. I would like to see all these loopholes closed and everybody paying a fair amount of tax on their income (in an ideal world) including all the politicians who make grand statements whilst all the time taking full advantage of the same loopholes they're condeming of course.

We're all (as in us lowly hard working plebs) currently suffering through austerity but if the big tax avoidance schemes were stopped and the very high earners made to pay their fair share then we wouldn't be suffering quite so much. You only have to look at Greece right now to see an extreme example of what can become of an economy when tax avoidance/evasion becomes the norm.

I do not believe it would be right to raise taxes for the very rich as just as in the 70's they'll all simply leave the country, I do believe they should be made to pay what they're supposed to be paying right now though.

p.s I'm not particularly a Cameron fan. I do however think Jimmy Carr is a .....(insert suitable swear word of your own choice) and not just because of this latest revelation of his tax affairs.
 
Cameron's father took full advantage of Thatcher's legalisation to legalise current tax avoidance methods and gained a lot of wealth that way. Wealth that David, and other family members, subsequently inherited. http://t.co/CpLFbCJj
 
And let's not forget the many highly paid civil servants and council employees who are employed as service companies to avoid the higher rate of income tax (as consultants normally). I can tell you this practice is rife in local government.

I think everyone should pay their fair share of tax, I believe in a welfare state that steps in and helps those less fortunate, but our leaders in public life need to set an example otherwise their assertion that tax avoidance is morally wrong becomes a grotesque hypocrisy.
 
TriggerHappy said:
Cameron's father took full advantage of Thatcher's legalisation to legalise current tax avoidance methods and gained a lot of wealth that way. Wealth that David, and other family members, subsequently inherited. http://t.co/CpLFbCJj
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David Miliband has a company called 'The Office of David Miliband Limited' through which he channels his non-Parliamentary earnings. That way, he only has to pay 20% in corporation tax, rather than the standard 40% in income tax he'd have to pay as a high-rate taxpayer.

Lets not forget the scheme he and his brother cooked up to avoid paying inheritance tax when their father, Ralph Miliband, bequeathed them a £1.5 million house in Primrose Hill.


Don't just think is those rich tories, it's the rich labour too, More millionaires in the shadow cabinet than in the government you know.
 
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I have no problem with people avoiding tax if they act within the law. Why should someone, even if they earn millions, pay more than they need to? Do you really think that if all these millionaires paid their fair share we would see our taxes come down, of course not!

Surely the sale of cigarettes is morally wrong? What about the people who think same sex marriage is morally wrong. We all have different morals but what is important is the law!
 
The key point is Carr's hypocrisy. He was quick enough to criticise Barclays Bank in his show, whilst operating to the same standards himself.
 
acetone said:
David Miliband has a company called 'The Office of David Miliband Limited' through which he channels his non-Parliamentary earnings. That way, he only has to pay 20% in corporation tax, rather than the standard 40% in income tax he'd have to pay as a high-rate taxpayer.

Lets not forget the scheme he and his brother cooked up to avoid paying inheritance tax when their father, Ralph Miliband, bequeathed them a £1.5 million house in Primrose Hill.

Don't just think is those rich tories, it's the rich labour too, More millionaires in the shadow cabinet than in the government you know.
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I don't "just think is [sic] those rich tories". I'm well aware it's almost every other wealthy person in the UK that does it too. Frankly, as long as its legal, they'd be stupid not to. What I was doing was highlighting the hypocrisy in him criticising those who benefit from the practice when he himself has benefited significantly from the very same thing.
 
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I don't see the problem! Let's all be honest about this, if we could avoid paying tax .... we would! :cool:
 
Funny that Cameron finds Carr's actions "morally wrong", but has seen fit not to comment on the £285 million in tax that his advisor, Philip Green, avoided paying.....
 
8 out of 10 cats might be worth a watch on friday then
 
All these guys are doing is taking advantage of the LEGAL tax breaks that are there due to either Government errors or oversights when the legislation was put in place.

I'd be interested to see how many people who bemoan others doing this wouldn't do the same themselves if in the same position and how strong their moral objections would then be.
 
This country has got to stop the "Well the other party is just as bad" political mentality.

We have perhaps the most incompetent team in power ever, at a time when we need the best, and it is in part due to the similar woefulness of the people on the other side of the house who are offering no alternative.

That MUST not mean we ignore, or dismiss the evidence that this shower are doing such a terrible job.

Cameron's comments, targeting a private individual, will mean his family and friends will now be under close scrutiny. Jamie's link above shows how his father conducted exactly the same sort of tax avoidance he is currently berating.

Judged purely on his objectives and how he goes about achieving them, this most recent action shows in microcosm that he doesn't know what he is doing.

As ever my answer is now always the same. We must spend more on educating the next generation. Our generation is just too stupid to be able to vote.
 
I don't think celebs or other high earners are the biggest issue with tax avoidance. Simply sort out corporate tax avoidance and the some £25bn hmrc is in dispute with various companies over & the amount jimmy Carr et al. are actually avoiding looks very small indeed
 
can we keep political viewpoints out please guys or this will be closed.

This is a discussion about tax avoidance/evasion, not the competence of politicians or which side is better than the other.
 
I'm amazed Carr earns enough to pay tax on millions, is he really that funny?? He's about as funny as Lenny Henry.

He's working within the law, Cameron should change it, but then again he would upset a lot of his mates...
 
Edtog said:
I'm amazed Carr earns enough to pay tax on millions, is he really that funny?? He's about as funny as Lenny Henry.

He's working within the law, Cameron should change it, but then again he would upset a lot of his mates...
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This!

Instead of coming on TV to rant about an individual the government should close the loophole. As has been said before, if we were in a position to legally pay less tax, we would all pay less tax.
 
Edtog said:
I'm amazed Carr earns enough to pay tax on millions
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I like Mr Carr, but was also surprised just how much he has earnt... then I thought about it and he pretty much appears on TV continually as well as back to back touring.... so I suppose that all must add up.

As for tax avoidance, I am looking forward to seeing him take a ripping from someone, although I doubt it will happen, but we live in hope.

If any of you read the original expose article from the Times, which I can't quote you, but here is from the Guardian's story:

The Times reported that at a seminar in Birmingham, Roy Lyness of Peak Performance told an undercover reporter that his scheme would net company directors 80% of their earnings. "A contractor will net approximately 82% of their earning after all taxes. And a director will net approximately 80% after all taxes and costs."

"So if someone is on a £100,000 contract they will get as a contract £82,000, no more taxes to pay," Lyness said.

The scheme is understood to work by UK earners "quitting" their job and signing new employment contracts with offshore shell companies. Those companies then "rehire" their new employee back out to the UK but take their earnings. The offshore company then pays their employee a much lower salary but also "loans" them thousands a month. However these loans can be written down as tax liabilities, and so reducing the overall bill to the government.

Lyness added that he believed it would take tax inspectors years before they put a rule in place to block the scheme, according to the Times. "We expect the process to take at least three years to get a proper ... rule in place. We say 'make hay while the sun shines'."
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In the original story, Lyness is quoted as basically saying if they close this loophole then they will simply find another, its a cat and mouse game thats being going on for years.

The figure I remember from the paper was something like 30 odd million was in this scheme - small fry to be honest. Whilst we are all jealous of such numbers, the much bigger fish are the corporations who perform twists and turns to not pay tax on billions.

Those are the ones that need hunting down with dogs.
 
And how many have avoided tax by paying people 'cash'? Pretty much everyone is my bet!! The sums involved are miniscule when you look at government revenues. As Andrew says above, the government have the power to close these loopholes so just do it!
 
its simple. Ask yourself this question:

If somebody came to you and said - "I can set you up on a scheme where you will pay 1% tax and it is completely legal"

Would you say

a) "No thanks, I like to pay my taxes to ensure the country runs properly and I don't think it is fair that I pay less tax than others"

b) "Sign me up"

If the answer is b (which I imagine would be the majority) then can you really blame Jimmy Carr for taking the opportunity? If the answer is a) then you are a better man than I am.
 
I think the thing that narks people is that for the majority there can be no chance of avoidance.

Anyone on PAYE (which I suggest is most) can't play the "complex offshore accounting route", the self employed's "everything is an expense" or the dodgy geeeezaaa "cash in hand mate" one either.

Thats the moral outrage and I suggest its felt by more than 50% of the country.
 
Sorry, I'm very much in the camp that we all contribute financially to society to make things work, including paying for those who have not.

Anything else is the personal greed that leads to the collapse of society - I won't give you examples, but there are plenty both from not so long ago in this country and even today in a nameless ultra rich country.
 
The loopholes will only be closed when the little people start using the methods in their droves. The rich currently use them, many of whom are MPs etc so they won't be closed any time soon.
 
desantnik said:
I think the thing that narks people is that for the majority there can be no chance of avoidance.

Anyone on PAYE (which I suggest is most) can't play the "complex offshore accounting route", the self employed's "everything is an expense" or the dodgy geeeezaaa "cash in hand mate" one either.

Thats the moral outrage and I suggest its felt by more than 50% of the country.
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so surely then it's jealousy. Because we can't do it we don't want anyone else to either. Is that any better than greed?
 
i think it's a fair thing to say we'd all try to minimise our tax liabilities as far as possible, who likes paying tax?

but the point is, if we're going to have things we all take for granted, universal healthcare, schools, emergency services and so on we need to pay tax and everyone needs to pay their fair share.

simon above made a point about using childcare vouchers as a method to reduce tax and soften the blow - this is very interesting because maybe if everyone* paid their fair share of tax you wouldn't even have to pay for your childcare directly in the first place as it would be provided by the state as a universal benefit.

the same could also be said of university education and care of the elderly - all things most people believe should be universal benefits are not.

the point is, by not paying tax we're stumping up for all these things that should be universal benefits anyway.

* i'd like to add, the sort of people who that statement refers to are not people like you and i who tried to make our living a bit more comfortable by using government incentive schemes to reduce our tax, but those, like the leaders councils, academy schools and government bodies who use well known tax dodges to get out of paying their fair share of income tax. i like most people are paid using paye and i don't have a choice, and nor should they.

the other thing we as a society needs to accept and swallow is that if we are to expect those with high incomes to pay their fair share of tax, then they also must receive these universal benefits also and we must rid of this culture of means testing everything. we can't expect to have it all ways.
 
joescrivens said:
so surely then it's jealousy. Because we can't do it we don't want anyone else to either. Is that any better than greed?
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No, the term you are looking for is that its a break down of the rule of law - which is a very important concept in government.
 
I see I'm in the minority then, judging by the poll.
 
sign me up. I can then invest the "tax savings" by ploughing it back into the economy!
 
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