Can we agree that we should stop all people from avoiding paying tax that they are legally obliged to do?

Can we?

The “benefits” of being self employed are in tax avoidance in a large part. Those of you that are self emplyed will not pay as much tax as those of us that are on PAYE even for a similar income after (real) costs are taken into account.

Seriously, taking “morals” advice from a polititian
Even cameron fiddled inheritance tax.
All of them are lieing cheating thiefing scumbags.

The “benefits” of being self employed are in tax avoidance in a large part. Those of you that are self emplyed will not pay as much tax as those of us that are on PAYE even for a similar income after (real) costs are taken into account.

Ever been self employed TJ?

Not true. We have UK regulations that are supposed to prevent the use of tax havens as a means of tax avoidance, and the Court of Appeal has ruled in the past that this does not conflict with EU law.

well, it would appear that whatever the court of appeal thinks, the EU thinks differently, and EU tax law overrules UK tax law

http://www.tax-news.com/news/UK_CFC_Rules_Still_Break_EU_Law____49482.html

The “benefits” of being self employed are in tax avoidance in a large part.

Which very clearly makes up for the lack of security, high levels of risk, abscence of pension and union or paid holidays, the abscence of redundancy pay.
Am I to assume you think that all self employed people are cooking the books and all employed people are whiter than white?

Even cameron Miliband fiddled inheritance tax.

FTFY

Where does tipping restaurant staff fit into the morals of cash payments for services received?

I believe that if tips are individual and go straight to the pocket of the tipped worker, then they are untaxable, a bit like a gift.
If they are collected and redistributed, or collected by means of a visible tip jar then they are liable to tax. Usually to be administered by the employer at the business as a taxable addition to the wages.

I would like to take this opportunity to personally thank David for outlining something that he feels is immoral, and inform him that it is nobody’s place to attempt to adjust my moral code, other than perhaps my dear departed mother. The moral code of a minister whose existence I was oblivious to 15 minutes ago has no impact on my morality (and likely never will).

Please, David, do continue to make the laws but leave your moral posturing behind closed doors such that we can continue to live our lives. Thank you.

Personally, I have had a few friends who started earning a lot of money off the books. I found a correlation between their amount of undeclared income and their boasting about generally being the best person on the planet. It also correlated with how much they equated ‘Paris’ to ‘Disneyland’. I am simply (quietly) grateful that I have had the chances in life (so far) to earn far more than them legitimately.

re tips: Usually to be administered by the employer at the business as a taxable addition to the wages

If you’re a waitress who earns enough money to pay any income tax at all, you have done well.
You could always tip on card if you want your tip to go through the ‘proper’ channels. Bear in mind this will likely be taxed and then rebated months later due to tax code related tomfoolery.

Zulu, if you are resorting to ‘whatabouting’… comparing the Cameron and Milliband family inheritance tax dodges is akin/proprtional to comparing the ‘cash-only’ builder with DLA and a new Mitsubuishi L200 with my next door neighbour’s undeclared car boot sale earnings… 🙄

re: Labor vs Tory

Shut up. Please. You’re the reason we pretty much have a two party system. Stop perpetuating it all!

teamhurtmore – Member

E_L (and Z11) still cant see why this is a party political issue?

You claim to have a masters in economics but you can’t see the connection between taxation and politics ? ….. you crack me up mate 😀

Zulu-eleven chose to make his usual moronic political points starting with one about the ‘Laffer curve’, and I chose to challenge him simply because it’s so easy and the hot weather has made me too lazy to attempt anything more challenging or that requires more effort.

If you do the numbers, there are a couple revenue of things which stick out like roundhead in the court of King Charles. The value of the “black” Economy, which is phenomenal. Last time I did the excercise the best estimate was that if tax was paid on it all the level of personal income tax could come down from what was then about 30p in the £1 to about 12p. The other one was clocking cars.

Clocking cars is easily resolved by simply making it a requirement to have the milegae noted and recorded at every MOT. Its all computer linked and there is no reason for this info to not be readily available and cross referecned when you buy a vehicle ………. well except the fact that about 80%, yes thats right 80% of second hand cars have been clocked. The unforeseen consequence of this is that the economy would be profoundly effected by overnight nailing of that problem as could easily be done.

I’m not an economist, but I have no doubt that the so called black economy could as easily be nailed by judicious tax laws such as VAT which is phenomenally hard to avoid. However, to do so requires political will, which simply doesn’t seem to exist.

So immoral? Well its a bit like watching a rape. You didn’t do it, but aren’t you just a bit guilty too?? (I pose that question to one G. Osborne rather than the STW massif at large)

Epic fail as most people didn’t read the actual article

Ah, so thats the new moral code is it Julian? its ok if you only do it a bit, but not a lot.

like shoplifting is acceptable for a packet of sweets, but not for a telly

sorry, I hadn’t realised that the moral code of the left was flexible like that 🙄

On the contrary Ernie, I am just able to see that trying to pretend that tax avoidance is a party political issue is simplistic, unhelpful and not supported by the facts. The true benefit of an (economics) education, perhaps? But carry on with the silliness (on both sides) if it entertains! Perhaps that’s what the hot weather is doing!

Edit: mike, you are surprised?!?! Why let little things like what he really said get in the way? 😉

Which very clearly makes up for the lack of security, high levels of risk, abscence of pension and union or paid holidays, the abscence of redundancy pay.

Lack of security and high levels of risk – definitely true. You get far starker levels of winners and losers in self employed status. Those that choose the wrong profession or are facing not a lot of trade available (the compulsory new healing crystal shop that opens every year in our town then goes under regularly as clockwork 4 months later because there strangely turns out to be no more mugs prepared to buy into that crap than there was 12 months ago 🙄 ) or too much competition, or they are crap at what they do or just are plain unlucky have no place to hide. The successful self employed folk amongst my friends are financially much better off pro-rata for the work they put in and the skills they have than those that are employed. And so they should me imo – they took the risk some of us chose to avoid.

Absence of pension and paid holiday – I think that’s just a mindset thing. I’ve never thought of me having paid holiday when in an employed job – just working X number of weeks out of the year and dividing my total salary by X for my weekly wage. No reason a self employed person can’t think the same in reverse. Those of my self employed friends who don’t take holiday are either running a business that is going down the pan or addicted to money and can’t resist a bit more. If your sustainable business (i.e. its not about to fall about your feet) can’t afford to make provision for your future (either through pension or being a saleable asset when you are done) you are either taking too much out for the here and now, or doing something else wrong.

And yes – I’ve been both sides of the fence over the years.

teamhurtmore – Member

On the contrary Ernie, I am just able to see that trying to pretend that tax avoidance is a party political issue is simplistic, unhelpful and not supported by the facts.

Of course tax avoidance is a political issue !

Although the subject in the OP is tax evasion, not tax avoidance…….try to pay attention at the back.

Convert, you hit the nail right on the side!!

The Holiday pay, sick pay and pension come from your profits/pay so you need to earn all the bits the employer puts in on top. Hence it looks like more to some jealous types.

My last sort of public sector place gave me 10% of my earnings as a pension, and I barley had to turn up. To get that sort of return in the self employed world needs a much higher rate!!

Currently in the self employed no work end of life so this in one of those bad times that hopefully the good times will pay back soon.

Can we agree that we should stop all people from avoiding paying tax that they are legally obliged to do?

Avoiding tax that you are legally obliged to pay is tax evasion and is already a crime.

Accepting cash so that you can get away with not declaring your earnings is straightforward tax evasion.

Legally arranging your affairs in such a way is as to minimise your tax liability is tax avoidance and is legal. The problem is that there is no clear line between “acceptable” and “unacceptable” tax avoidance. At one end of the spectrum, if you pay any more tax than you’re legally required to, then you’re a mug. At the other, the deviousness of some recently reported tax avoidance schemes is clearly distasteful.

For example:

If the government announces that the VAT rate is going up next month, and you buy a TV now that you were otherwise going to buy next month, you have legally reduced the tax that you would pay. That’s tax avoidance. Is that acceptable?

If you put your savings into your wife’s name because she’s in a lower tax band, that’s tax avoidance. Is it acceptable?

If you sell your services through a limited company (which may be desireable for non-tax reasons) and then pay yourself through dividends to reduce your tax liability, that’s tax avoidance. Is it acceptable?

If you sell your services through an offshore company that then loans you your earnings back with no interest, and no expectation of being repaid, that’s tax avoidance. Is it acceptable? (I should add that I believe that HMRC are still disputing whether this one is legal).

Clamping down on avoidance is very hard. Even if you were to somehow outlaw avoidance, you’re then in the messy position of having to prove that a particular arrangement of affairs was done for the purposes of reducing tax. Maybe you wanted the TV a month earlier? Maybe you wanted the legal protection of a limited company?

“Closing loopholes” is much easier said than done. The tax system is hideously complex, and high earning individuals and companies have a strong financial incentive to find creative ways through it.

Ok, so here comes the George Galloway defence, a strangled contortion of the truth. Tax avoidance and evasion are both political issues rather than party political issues ( read what I wrote perhaps?) ie they apply to both sides. Please keep awake at the front and listen. Avoidance and evasion are both being discussed here with the focus on politicians being more on avoidance and the OP on evasion. Too much of the latest Mock the Week Ernie? Nice try though.

Convert, you hit the nail right on the side!!

The Holiday pay, sick pay and pension come from your profits/pay so you need to earn all the bits the employer puts in on top. Hence it looks like more to some jealous types.

My last sort of public sector place gave me 10% of my earnings as a pension, and I barley had to turn up. To get that sort of return in the self employed world needs a much higher rate!!

Currently in the self employed no work end of life so this in one of those bad times that hopefully the good times will pay back soon.

I think the “jealous types” look at standard of living rather than actual numbers – how many of us know how much our neighbour is earning in pounds and pence but we know a fair bit about what they drive, go on holiday etc. I guess the point is there will be the self employed types that earn more than their employed counterparts and do the right thing by investing in the future and putting some aside for the bad times and there will also be those (because it is easier to be tempted to do it as a self employed) who spunk it all for the here and now. I guess those are the ones that get the “jealous types” chattering.

fwiw you sound like the sensible self employed type and I hope the good times and here again soon!

Going back to corporate tax avoidence. Michael Meacher recently proposed this as a private members bill

Today I am introducing a Private Member’s Bill into the Commons (having won a place in the Private Members’ Bill lottery) which will outlaw any financial transaction for which the primary purpose is tax avoidance/evasion rather than any genuine economic purpose. It will transfer the burden of proof, from HMRC having to prove that a transaction was really a disguised tax avoidance device, to a company having to prove that it had a genuine purpose. If HMRC believed for good reasons that it was really for tax avoidance purposes, they could declare that the transaction was null and void and it would be for the company, if they so chose, to challenge that decision in court. As it happens, on this very day a new tax avoidance sceme has just surfaced which would be a perfect example for the application of my Bill.

So the usual corporte antics of funelling profits through tax havens disguised as transactions would be stopped at a stroke

Unsurprisingly, the Tory party that are now ‘aggressively targetting’ tax avoiders didn’t support it.

it’s still a little mad that this post all came from a politician giving a straight answer to a question
pdw it was mostly trying to get both sides to accept that there is no moral high ground left available to stand on

anywhere near 100 yet?

Maybe we should tax this place….or a 25% levy on imported cranksets, brakes and dropper posts

teamhurtmore – Member

Ok, so here comes the George Galloway defence, a strangled contortion of the truth.

I love it …. the geezer who wants to keep “politics” out of politics comes out with that little beauty 😀

Right, this is all very amusing but I fear it’s time to do something useful.

Zulu, it was a comment about your own somewhat morally flexible “whataboutissm”. In addition to pretty much every other thread on here that becomes party political, you tried it twice on this very thread before the third example I replied to. Do you have any other tricks? 🙄

[double post]

Of course it’s wrong if the intention is to avoid tax. However I probably still would if I thought I could split the difference with the guy doing the work and both come out better off. I have my faults!

Sounds like another gov feeler for the ‘cashless society’ the banks/politicians so readily want.

And when/if such a thing ever materialises, just watch the bank charges rocket.

So he takes all the risk while you take none at all.
And you get all the VAT and some of the TAX as well
That seems fair.

So, the alternative where you ‘get’ the VAT and they ‘get’ the tax is fair is it?

As I said before, “fair” is where I Collect the VAT as I’m legally required to, and pay it to the Revenue.

And I pay Tax on my Company profit.

Anything else is illegal and stops me from sleeping when the paperwork needs to be filed.

Is it ‘Morally wrong’ to pay cash in hand?

no

back to the OP, yes its probably ‘wrong’ on some superficial level that requires you to not make an informed choice about anything.

but then so was invading iraq wan’t it and my tax/VAT payments helped fund some of those cluster bombs didn’t they? I don’t actually recall having a say in that despite disagreeing.

And yes – I’ve been both sides of the fence over the years.

Which is clear, and damn you for having such a balanced and rational point of view. Your days in this place are numbered. 😛

elzorillo – Member
Sounds like another gov feeler for the ‘cashless society’ the banks/politicians so readily want.
And when/if such a thing ever materialises, just watch the bank charges rocket.

This ^^^ +1

But maybe a little miscalculated. Even the telegraph online poll is 90% voting him wrong.

As I said before, “fair” is where I Collect the VAT as I’m legally required to, and pay it to the Revenue.

And I pay Tax on my Company profit.

Then i’m not entirely sure why you questioned my point about how the money should be split,as either method would not be fair. Why was my approach so unfair as to warrant comment?

What if this country was run like a building society?

Your vote is weighted by the tax you’ve paid in the last whatever. And that’s tax paid by you as an individual, not by the “corporation” that “employs” you (and only you, at minimum wage).

Anyone wanting to vote here would have to pay tax here.

There’s plenty wrong with it, probably. The rich would have more votes for a start – but only if they paid their tax.

Why was my approach so unfair as to warrant comment

You seemed to want the tradesman to take all the risk, while you got most of the reward.

In my experience, that’s what most people who ask for “cash discount” seem to expect too.

What if this country was run like a building society?

Your vote is weighted by the tax you’ve paid in the last whatever. And that’s tax paid by you as an individual, not by the “corporation” that “employs” you (and only you, at minimum wage).

Anyone wanting to vote here would have to pay tax here.

There’s plenty wrong with it, probably. The rich would have more votes for a start – but only if they paid their tax.

Nice idea but as the rich pay proportionaly more tax than the poor, even with all their avoidance schemes, then the poor would be properly shafted.

Someone who earns £100k but avoids loads of tax may still pay at 20%, 20k pa in some sort of tax. Sure they should pay nearer 30-40k but their 20k is still 10x what someone earning £15k pa will pay.

Lord Ashcroft will pay more tax in a year than most of us will pay in a lifetime. Its just a lot less than he would pay if he payed it at the same rate as us meer mortals.

CBA to read all that, but how else are you supposed to pay? bartering?

the cheque is nearly dead, many people won’t accept them, and not every builder/plumber/sparky/chippy will take cards