The Panama Papers.

2tyred, yeah he knows, he got told oooh 3 pages ago, something like that.

😆

Tax relief on pensions, savings and C2W are schemes designed by the government to use the tax regime in an attempt to influence behaviour. The govt is at liberty to do this – exactly the same as tax on cigarettes and alcohol (and the rest of the Oasis back catalogue) but in the opposite direction.

Entirely different from registering a company operating primarily in the UK somewhere other than the UK to avoid incurring tax payable by companies registered in the UK. There is no government scheme for this.

There’s no scheme for me going on holiday abroad and buying things/eating out there, thus living under the local tax regime and avoiding all kinds of UK taxes for the duration of the Holiday.

If I ride my bike to work instead of driving I avoid paying tax on the petrol I would have used. There’s no govt scheme for that.

Your definition of ‘bad’ tax avoidance doesn’t work.

Your definition of ‘bad’ tax avoidance doesn’t work.

Of course it does. If the government didn’t want you to cycle then it would ban bikes from the road. It also charges you VAT on your bike.

If the government didn’t want you to go on holiday, then it wouldn’t allow you to travel, or would make it prohibitively expensive. It also charges you things like airport duty.

In contrast, the government doesn’t want you to set up a tax avoidance scheme contrary to the purpose of the legislation, as Gary Barlow would tell you.

Of course it does.

+1

The usual comic defence of what the Masters are doing by the forelock-tuggers from Below Stairs.

If the government didn’t want you to go on holiday, then it wouldn’t allow you to travel, or would make it prohibitively expensive. It also charges you things like airport duty.

So if it’s legal then it’s ok? Tax avoidance is legal – which is what everyone is saying.

In contrast, the government doesn’t want you to set up a tax avoidance scheme contrary to the purpose of the legislation, as Gary Barlow would tell you.

Gary Barlow’s scheme was tax evasion or close enough to it that he didn’t want to take the chance of sticking with it. We’re talking about tax avoidance.

There’s no scheme for me going on holiday abroad and buying things/eating out there, thus living under the local tax regime and avoiding all kinds of UK taxes for the duration of the Holiday.

there are “schemes” on what and how much you can buy over there to bring back, but yeah you can get totally arseholed on cheap retsina every night you’re there if you wish

If I ride my bike to work instead of driving I avoid paying tax on the petrol I would have used.

Fuel tax is supposedly* already there to get you out of your car and on to yep you guessed it, your bike.
*altho we all know it makes very little difference, it’s just a big money earner. make the changes 1 or 2 p at a time and everyone moans but by and large they keep driving, insert poikilothermic pan analogy here.

So if it’s legal then it’s ok?

Sigh. I assume you are deliberately missing the point about government intent.

Gary Barlow’s scheme was tax evasion or close enough to it that he didn’t want to take the chance of sticking with it. We’re talking about tax avoidance.

No, it was tax avoidance. A tribunal said so.

You really do need to start reading what has been written, rather than making stuff up.

No, it was tax avoidance. A tribunal said so.

Then what are you complaining about? If tax avoidance is *already* illegal then there’s no problem. Anyone who has ‘avoided’ tax ever already has to repay it just like Gary Barlow did.

I assume you are deliberately missing the point about government intent.

No, I’m not.

Tax avoidance is legal – which is what everyone is saying.

if there’s a HMRC form to fill in for it (pension, isa, spouse tax allowance etc etc) or there’s no forms involved (holiday – can’t believe this actually needs answering) then it’s probably all well within the rules. If you have to setup a dozen companies, “employ” half your family, or pay an accountant a silly amount to run the system for you then it’s exploitation of the rules and any loopholes, morally wrong and possibly, if HMRC catch up with you, could land you a hefty fine – unless you are big/rich enough to employ better lawyers of course.

Then what are you complaining about?

So you accept that you’re wrong to call it “evasion”?

I’m complaining about people who deliberately conflate completely different things on the basis that they’re all “avoidance”.

You’re one of them.

So if it’s legal then it’s ok? Tax avoidance is legal – which is what everyone is saying.

I think we have established it is legal what we have said is that it is immoral

Whilst it may be true to say we could spend for ever trying to give an exact definition of it I find it hard to believe you dont get the point being made here.

If you have to setup a dozen companies, “employ” half your family, or pay an accountant a silly amount to run the system for you then it’s exploitation of the rules and any loopholes, morally wrong and possibly, if HMRC catch up with you, could land you a hefty fine – unless you are big/rich enough to employ better lawyers of course.

Yes, but if you have to “”employ” half your family, or pay an accountant a silly amount to run the system for you” then it’s probably already evasion. If you have ‘artificial’ steps in your process that exist for no other reason than to evade tax you are already in an illegal scheme.

The problem is, with so many legit reasons to run a business outside of the uk or to live outside the uk how does the law distinguish?

If it was easy every country would deal with it, and they don’t.

(Except the USA where citizens have to pay all US taxes *on top* of the other taxes they have to pay abroad.)

Yes, but if you have to “”employ” half your family, or pay an accountant a silly amount to run the system for you then it’s exploitation of the rules and any loopholes” then it’s probably evasion.

No it isn’t, and you repeating it won’t make it true.

Then what are you complaining about? If tax avoidance is *already* illegal then there’s no problem. Anyone who has ‘avoided’ tax ever already has to repay it just like Gary Barlow did.

Except as you yourself have noted with Gary Barlow’s case there appears to be a fairly large grey area that could be avoidance or evasion depending on interpretation of laws (and how cosy your personal meetings with HMRC are).

Why do people feel the need to constantly try and reduce everything to simplistic black and white terms?

I hope the front runner for saving Port Talbot doesn’t use these schemes.

Anyway, for the gov’s own publications its got evaders and avoiders in its sights

Since 2010 the Government has committed almost £1 billion to tackling evasion, fraud and avoidance, which HMRC is investing in 2,500 extra staff and cutting-edge technology and analytics, underpinned by a stronger set of powers and sanctions, such as criminal investigations and prosecutions and publishing the names of deliberate defaulters.

it may be true to say we could spend for ever trying to give an exact definition of it

A legislator *has* to come up with an exact definition! You can’t make something you can’t define illegal. That’s the whole problem.

If you have ‘artificial’ steps in your process that exist for no other reason than to evade tax you are already in an illegal exploitative scheme which may or may not later be deemed to be “officially naughty” and get you a fine but is almost certainly immoral and “against the spirit of the law”.

One test for tax avoidance is to ask why someone is doing it.

If you do something complicated (and expensive) and the only/main outcome is you pay a bit less tax, that’s tax avoidance.

Tax avoidance is NOT the same as being tax efficient.

Transferring profit made in the UK to a low tax jurisdiction via complex (or even fake) intercompany charges might be tax avoidance.

Putting money in an ISA isn’t tax avoidance, although it might be tax efficient.

One test for tax avoidance is to ask why someone is doing it.

If you do something complicated (and expensive) and the only/main outcome is you pay a bit less tax, that’s tax avoidance.

Nope, under UK law that’s already illegal. You aren’t allowed any steps where the *only* outcome is you pay a bit less tax. That’s evasion, not avoidance.

Putting money in an ISA isn’t tax avoidance

It *is*. The only purpose of an ISA is to avoid tax on savings. Same with a pension.

I agree we need to define it and the post above is pretty decent

It’s pretty obvious some folk are creating artificial entities with no real purpose other than tax minimisation/avoidance.

That seems a reasonable point to start IMHO

I avoid tax by buying cakes (not eligible for VAT) instead of biscuits (eligible for VAT) when out for a ride – stops them getting their mits on my hard earned cash 😉

It’s pretty obvious some folk are creating artificial entities with no real purpose other than tax minimisation/avoidance.

That seems a reasonable point to start IMHO

It’s a **** definition.

No *real* purpose? How the hell do you know if someone is living on Jersey because they like the Cafes or because they prefer the tax regime there? For most people it will be a bit of both anyway.

It’s already illegal if there’s “no purpose” but by adding “real” you’ve just made it meaningless.

Still think legislation is easy?

Hmmm, I wonder which of our right wing blowhards will lose the same argument over the next two pages?

I avoid tax by buying cakes (not eligible for VAT) instead of biscuits (eligible for VAT) when out for a ride – stops them getting their mits on my hard earned cash

Sometimes I buy cakes because I like them, but once I only had enough money for a cake but not for biscuits. So I bought the cake purely because it was cheaper and that differential happened to be the exact amount of the tax. How immoral.

I’ve heard people used to takeaway food because it’s cheaper than eating in at the same establishment due to the tax differential. Shocking.

Nope, under UK law that’s already illegal. You aren’t allowed any steps where the *only* outcome is you pay a bit less tax. That’s evasion, not avoidance.

No. its not illegal. Its avoidance that may or may not work under UK law. If it works you’ve got away with it (until the law is changed). If it doesn’t work, you’ll probably have to pay the tax + interest + maybe a penalty depending on how reckless you might have been in connecting your scheme. It is NOT evasion, which is a knowing, deliberate and CONCEALED action that directly contravenes UK tax law.

The only purpose of an ISA is to avoid tax on savings. Same with a pension.

The only purpose of an ISA is to earn interest on savings. Its a tax efficient method of earning interest because of deliberate government policy encouraging people to save money. Same with pensions. It is not tax avoidance.

‘artificial’ steps in your process

Excellent, the test formulated in Furness v Dawson which was a 1984 tax case – a leading one in the field of tax avoidance. However.tax law interpretation has moved on in the last 30 years. I fear that posters on Singletrack are unlikely to succeed in defining tax avoidance when our most eminent judges have found it so difficult.

Still think legislation is easy?

Care to highlight where i said it was?

DO you really want to claim that all these people in this report and working with this organisation di things for a reason other than to avoid tax?

Its a pretty pointless debate if folk are just going to take one extremist view[ dig and argue it for ever*] and not actually engage

Yes its hard to define, yes some may be legitimate but this entire thread is about those who are just doing things to avoid tax. if you dont want to discuss this, and use childish straw men arguments and daft examples about cakes and biscuits[ as if they are the same as what is being discussed], then that is your choice.
Please dont mistake this as a reason for you to explain why your cake example was so god damn awesome.

* it is of course so very STW.

That’s evasion, not avoidance.

I think we’ve already established that you don’t have much of a clue regarding these definitions.

The usual comic defence of what the Masters are doing by the forelock-tuggers from Below Stairs

Yup. All the while furiously straw-manning as hard as they can (as usual). I really wonder why I bother with this forum sometimes.

Yup. All the while furiously straw-manning as hard as they can (as usual).

It is a mystery: do they really think that if they are sufficiently obsequious then they will be invited to dine at table? Or are they just hoping to hoover up a few crumbs from the floor?

Given the scale of the issue and the negative impact it’s having on people who aren’t involved (and the broader economy at a time of real crisis), having an argument on points of detail with strangers on the internet isn’t the best place to be expending our energy.

Pushing for the story to remain in the headlines and pushing for full and proper investigation of anyone suspected of breaking the law, and pushing for proper legislation to stop UK economy being stripped of desperately needed tax (NHS, social care, old-age care, roads, flood defences etc) are where we need to focus our energy…

This thread is increasingly like a scene from Life of Brian 🙂

Sometimes I buy cakes because I like them, but once I only had enough money for a cake but not for biscuits. So I bought the cake purely because it was cheaper and that differential happened to be the exact amount of the tax. How immoral.

That’s quite possibly the funniest comment I’ve ever seen on here. Possibly on any forum ever. Bravo! 😆

I strongly suggest the mods just shut this down. If it’s got to the point where people are arguing that having an ISA and eating cakes instead of biscuits is tax avoidance then we’ve gone way beyond any sense of reason. Someone should invent a new Godwin’s Law for this type of thing.

Well, in case anyone is actually interested in what tax avoidance is, here is an extract from HMRC General Anti Abuse Rule. I think its sort of an umbrella to catch avoidance that isn’t dealt with specifically elsewhere in the legislation

How to identify ’abusive’ arrangements

B11.1 It is recognised that under the UK’s detailed tax rules taxpayers frequently have a choice as to the way in which transactions can be carried out, and that differing tax results arise depending on the choice that is made. The GAAR does not challenge such choices unless they are considered abusive. As a result in broad terms the GAAR only comes into operation when the course of action taken by the taxpayer aims to achieve a favourable tax result that Parliament did not anticipate when it introduced the tax rules in question and, critically, where that course of action cannot reasonably be regarded as reasonable.

An ISA is a savings vehicle specifically aimed at reducing tax liability to zero, thus avoiding it.

Cakes are zero rated. If you spend money on cake or any other zero rated product, you have avoided tax if that money would have been spent on something that incurred VAT.

Let’s stick with the ISA example. If it doesnt avoid tax, why choose it over an account that you have you pay tax on?

reason? since when has that been important dazh?

Now cakes is a different matter altogether….

An ISA is a savings vehicle specifically aimed at reducing tax liability to zero, thus avoiding it.

Gosh, thanks for letting us know.

Does taking out an ISA achieve a favourable tax result that parliament did not anticipate when it introduced the tax rules in question?

AND

Would taking out an ISA not be regarded as reasonable?

How about a separate ISA thread? If it’s legalized tax avoidance can you include the cycle to work scheme in it.

Meanwhile some sense has been written

Pushing for the story to remain in the headlines and pushing for full and proper investigation of anyone suspected of breaking the law, and pushing for proper legislation to stop UK economy being stripped of desperately needed tax (NHS, social care, old-age care, roads, flood defences etc) are where we need to focus our energy…