Retrospective taxation campaign
Discussion
The typical “Daily Wail” type responses always make me chuckle as these arguments are always directed to some other group of people and usually the wrong group.
Whether or not you agree if this offshore tax practice is moral is one thing, but to see the retrospective creation of tax law is always going to be wrong. To change the debate from company tax law to personal tax law as an example, imagine if a bill were passed where the standard income tax rate increased and HMRC then chased retrospectively for the last seven years worth of unpaid tax! The reason this has not occurred is the backlash that would be caused; just because the target scope of this change is small, does not make it any more justifiable.
I run my own company and was offered this scheme many years ago by my accountant. I chose not use it, but not because it was morally wrong. When running a company the competition will always undercut you if they can and efficiency drives this. To be efficient, a company must minimise costs where tax is just another cost. At the time accountants and lawyers all agreed this practice was legal and believe me companies pay through the nose for these services.
The problem is not that these companies have not paid enough tax, they were not legally obliged to. The problem is the awful tax legislation put in place with gaping great loop-holes, but hey let’s not go after the guys who created the legislation, let’s just continue to listen to the spin and persecute the people who took the initiative to create their own company.
The target for this type of focus is continually shifting where single mothers, people on benefits, immigrants, MPs and many others have all been on the wrong end of the pointy stick. Remember everyone will optimise their own position given the opportunities presented, but let’s forget about all that. Grab your pitch fork and light your torches, it's got to be the right thing to do!!!
Whether or not you agree if this offshore tax practice is moral is one thing, but to see the retrospective creation of tax law is always going to be wrong. To change the debate from company tax law to personal tax law as an example, imagine if a bill were passed where the standard income tax rate increased and HMRC then chased retrospectively for the last seven years worth of unpaid tax! The reason this has not occurred is the backlash that would be caused; just because the target scope of this change is small, does not make it any more justifiable.
I run my own company and was offered this scheme many years ago by my accountant. I chose not use it, but not because it was morally wrong. When running a company the competition will always undercut you if they can and efficiency drives this. To be efficient, a company must minimise costs where tax is just another cost. At the time accountants and lawyers all agreed this practice was legal and believe me companies pay through the nose for these services.
The problem is not that these companies have not paid enough tax, they were not legally obliged to. The problem is the awful tax legislation put in place with gaping great loop-holes, but hey let’s not go after the guys who created the legislation, let’s just continue to listen to the spin and persecute the people who took the initiative to create their own company.
The target for this type of focus is continually shifting where single mothers, people on benefits, immigrants, MPs and many others have all been on the wrong end of the pointy stick. Remember everyone will optimise their own position given the opportunities presented, but let’s forget about all that. Grab your pitch fork and light your torches, it's got to be the right thing to do!!!
Elroy Blue said:
People who undertake serial tax avoidance are no better than the feral types who 'legally' receive benefits they have no right too. Both are bleeding the country dry.
Agreed.But I struggle with the principle of retrospective legislation, as who knows where our decent and caring politicians may end up abusing the crap out of that.
Evocator said:
Grab your pitch fork and light your torches, it's got to be the right thing to do!!!
It's difficult to imagine people who had their tax deducted at source getting very interested in this, whatever they may think about the idea of retrospective legislation in general. Especially as there appears to be some doubt over whether this actually is retrospective legislation as opposed to clarifying legisltation.R11ysf said:
The link in the OP I don't think is an example of retrospective taxation. I think it is an example of "you tried your luck and didn't get caught back then, but now we have caught you we are clobbering you for the lot" taxation.
I had 2 guys come to my office to pitch a scheme to me where I would pay 0% tax. Yes ZERO. In return for this I would pay them 8% of my income and they would set up a convoluted system of accounts and companies based in Isle of Man, Switzerland and a salary sacrifice into a company share scheme of a company worth £0 and therefore avoid the tax.
It was more complex than that but either way I asked what the outcome would be if the Revenue clamped down on this. They said they would fight it in court. I then asked if they lost who would be liable for the unpaid tax, interest and fine. I would. I would therefore be royally f
ked and facing a much higher tax bill than before and out of 8% gross that I'd paid them and probably face bankruptcy. I therefore told them to foxtrot oscar.
Anyone who did a similar scheme and didn't foresee the revenue clamping down on them in times of austerity when the country is broke is an idiot and they deserve everything that grets thrown at them.
If it sounds too good to be true...I had 2 guys come to my office to pitch a scheme to me where I would pay 0% tax. Yes ZERO. In return for this I would pay them 8% of my income and they would set up a convoluted system of accounts and companies based in Isle of Man, Switzerland and a salary sacrifice into a company share scheme of a company worth £0 and therefore avoid the tax.
It was more complex than that but either way I asked what the outcome would be if the Revenue clamped down on this. They said they would fight it in court. I then asked if they lost who would be liable for the unpaid tax, interest and fine. I would. I would therefore be royally f
ked and facing a much higher tax bill than before and out of 8% gross that I'd paid them and probably face bankruptcy. I therefore told them to foxtrot oscar.Anyone who did a similar scheme and didn't foresee the revenue clamping down on them in times of austerity when the country is broke is an idiot and they deserve everything that grets thrown at them.
But no I dont think laws - any laws- should be applied retroactively...if it wasnt illegal when you did it then you should not be prosecuted if whatever it was becomes illegal in the future (unless you subsequently do it again of course). To expand on the poster above regards to current tax "loopholes" such as tax free ISAs. What if some evil goverment in the future decides that tax free ISAs were a loophole they now choose to close retroactively? Would it be ok then for everyone that has or had ISAs to have to pay back all the tax they have legally "avoided"?
supermono said:
By the way I'm sick to the back teeth of reading reams of bullcrap from the 'blame the rich' bridage.
Most so-called rich people pay vast amounts of tax per annum, way more than most of the moaners are paying. Where where the moaners when the country's economy was being driven into the ground by the previous administration screwing up pensions, selling our gold, bloating the public sector to scandalous proportions?
And where's the hatred for serial job-dogders with a 'bad back' and those recklessly having kids they can't afford and expecting everyone else to pay for them?
The time has come to stop pointing the finger at the so-called 'rich' and getting on with working together to get us out of the mire we've been dropped into.
SM
Someone's touched a nerve... Most so-called rich people pay vast amounts of tax per annum, way more than most of the moaners are paying. Where where the moaners when the country's economy was being driven into the ground by the previous administration screwing up pensions, selling our gold, bloating the public sector to scandalous proportions?
And where's the hatred for serial job-dogders with a 'bad back' and those recklessly having kids they can't afford and expecting everyone else to pay for them?
The time has come to stop pointing the finger at the so-called 'rich' and getting on with working together to get us out of the mire we've been dropped into.
SM
Edited by supermono on Tuesday 24th April 11:37
That's not what's being discussed here, though.
The people in question took advantage of a loophole that was neither judged acceptable or unacceptable. In other words, they were taking a punt that it was acceptable. Over a period of time, the HMRC took the loophole through the courts and won on their interpretation- that it was unacceptable.
It's not a case of something that was legal being changed to illegal. It was something that lived in a grey area that needed clarifying.
The people in question took advantage of a loophole that was neither judged acceptable or unacceptable. In other words, they were taking a punt that it was acceptable. Over a period of time, the HMRC took the loophole through the courts and won on their interpretation- that it was unacceptable.
It's not a case of something that was legal being changed to illegal. It was something that lived in a grey area that needed clarifying.
Lucozade said:
3000 families
Why is it when people (dopey politicians included) talk about taxes they bang on about "families"...actually, worse than that, "hard working families" (as opposed to families that just have a group orgy in a jacuzzi all day?). Talk about irritating!Everyone is affected by taxes in their lifetime, even if they don't work. I don't see why those who have made a lifestyle choice to further populate the planet should be given any special consideration
10 Pence Short said:
That's not what's being discussed here.
My post is aimed at the '+1' brigade thinking here's another tax cheating scum. They're programmed to react like this whenever there's a suggestion of a 'rich' person shirking tax. They'll never understand the mechanisms in place to form an intelligent opinion but rather just '+1' the principle of more tax please.In fairness in this case it is rather daft to have spent the money potentially saved on a scheme like this and is rather different than the retrospective tax rises for example car tax as mentioned earlier.
SM
So am I a tax avoider? I'm just chasing HMRC to get my 30k of tax back. This is as a result of schemes the govt have set up to incentivise people like me to invest in EZTs and the like. Does that meke me a bad person?
What about Film Partnerships? A scheme where the govt create incentives to invest in films. Actually just a deferral scheme. Is that bad?
What about the battle my company had with HMRC about the value of EMI scheme shares? That's another tax beneficial scheme. Bad?
What about my gift aids and the tax I get refunded for them? Bad?
Perhaps the world of the daily wail reader is more black and white than mine, but I'm (unusually) with Supermono on this. Tax avoidance? bks.
BB
What about Film Partnerships? A scheme where the govt create incentives to invest in films. Actually just a deferral scheme. Is that bad?
What about the battle my company had with HMRC about the value of EMI scheme shares? That's another tax beneficial scheme. Bad?
What about my gift aids and the tax I get refunded for them? Bad?
Perhaps the world of the daily wail reader is more black and white than mine, but I'm (unusually) with Supermono on this. Tax avoidance? b
ks.BB
As noted above, this was not just people taking advantage of a legitimate scheme to reduce taxation. People were engaged in a high risk tax avoidance arrangement. The risk did not pay off.
I would be regarded by many people as being rich (although I'm not really, in UK terms), and I have no problem with high earners like me paying lots of tax. My tax bill tops six figures in most years. I am not delighted about that, but I don't complain. I am in favour of a general rule, widely enforced, to prevent mickey taking.
We can debate all day how much tax should be raised, and what it should be spent on, but, once we have set tax rates at whatever they may be, people should, in my view, get on board and pay tax, rather than looking for clever schemes to get around it. I am perhaps old fashioned in my view, formed when reading John Locke and other thoughtful writers as an undergraduate, that we are all in this together.
I would be regarded by many people as being rich (although I'm not really, in UK terms), and I have no problem with high earners like me paying lots of tax. My tax bill tops six figures in most years. I am not delighted about that, but I don't complain. I am in favour of a general rule, widely enforced, to prevent mickey taking.
We can debate all day how much tax should be raised, and what it should be spent on, but, once we have set tax rates at whatever they may be, people should, in my view, get on board and pay tax, rather than looking for clever schemes to get around it. I am perhaps old fashioned in my view, formed when reading John Locke and other thoughtful writers as an undergraduate, that we are all in this together.
supermono said:
My post is aimed at the '+1' brigade thinking here's another tax cheating scum. They're programmed to react like this whenever there's a suggestion of a 'rich' person shirking tax. They'll never understand the mechanisms in place to form an intelligent opinion but rather just '+1' the principle of more tax please.
In fairness in this case it is rather daft to have spent the money potentially saved on a scheme like this and is rather different than the retrospective tax rises for example car tax as mentioned earlier.
SM
Utter nonsense.In fairness in this case it is rather daft to have spent the money potentially saved on a scheme like this and is rather different than the retrospective tax rises for example car tax as mentioned earlier.
SM
It never ceases to amaze me how it's deemed perfectly acceptable to avoid tax, but then the same person will rage at those that claim benefits with bogus bad backs and the like.
You can say it's legal, but it doesn't make it morally right. But you can continue to feel smug and label all those that see the similarity in the two camps as 'Daily Mail types' or flat capped commies complaining about the rich.
veryRS said:
R11ysf said:
The link in the OP I don't think is an example of retrospective taxation. I think it is an example of "you tried your luck and didn't get caught back then, but now we have caught you we are clobbering you for the lot" taxation.
I had 2 guys come to my office to pitch a scheme to me where I would pay 0% tax. Yes ZERO. In return for this I would pay them 8% of my income and they would set up a convoluted system of accounts and companies based in Isle of Man, Switzerland and a salary sacrifice into a company share scheme of a company worth £0 and therefore avoid the tax.
It was more complex than that but either way [b]I asked what the outcome would be if the Revenue clamped down on this. They said they would fight it in court. I then asked if they lost who would be liable for the unpaid tax, interest and fine. I would.[b] I would therefore be royally fked and facing a much higher tax bill than before and out of 8% gross that I'd paid them and probably face bankruptcy. I therefore told them to foxtrot oscar.
Anyone who did a similar scheme and didn't foresee the revenue clamping down on them in times of austerity when the country is broke is an idiot and they deserve everything that grets thrown at them.
If it sounds too good to be true...I had 2 guys come to my office to pitch a scheme to me where I would pay 0% tax. Yes ZERO. In return for this I would pay them 8% of my income and they would set up a convoluted system of accounts and companies based in Isle of Man, Switzerland and a salary sacrifice into a company share scheme of a company worth £0 and therefore avoid the tax.
It was more complex than that but either way [b]I asked what the outcome would be if the Revenue clamped down on this. They said they would fight it in court. I then asked if they lost who would be liable for the unpaid tax, interest and fine. I would.[b] I would therefore be royally f
ked and facing a much higher tax bill than before and out of 8% gross that I'd paid them and probably face bankruptcy. I therefore told them to foxtrot oscar.Anyone who did a similar scheme and didn't foresee the revenue clamping down on them in times of austerity when the country is broke is an idiot and they deserve everything that grets thrown at them.
But no I dont think laws - any laws- should be applied retroactively...if it wasnt illegal when you did it then you should not be prosecuted if whatever it was becomes illegal in the future (unless you subsequently do it again of course). To expand on the poster above regards to current tax "loopholes" such as tax free ISAs. What if some evil goverment in the future decides that tax free ISAs were a loophole they now choose to close retroactively? Would it be ok then for everyone that has or had ISAs to have to pay back all the tax they have legally "avoided"?
These guys took a gamble and it looks as though it may not pay off. That's life.
BertBert said:
So am I a tax avoider? I'm just chasing HMRC to get my 30k of tax back. This is as a result of schemes the govt have set up to incentivise people like me to invest in EZTs and the like. Does that meke me a bad person?
What about Film Partnerships? A scheme where the govt create incentives to invest in films. Actually just a deferral scheme. Is that bad?
What about the battle my company had with HMRC about the value of EMI scheme shares? That's another tax beneficial scheme. Bad?
What about my gift aids and the tax I get refunded for them? Bad?
Perhaps the world of the daily wail reader is more black and white than mine, but I'm (unusually) with Supermono on this. Tax avoidance? bks.
BB
You've used very different examples there. Being tax efficient and minimising you tax bill is very different to aggressive tax avoidance which some of the larger funds do. Have a read of this http://www.moneymarketing.co.uk/adviser-news/hmrc-... and you will see what I mean. What about Film Partnerships? A scheme where the govt create incentives to invest in films. Actually just a deferral scheme. Is that bad?
What about the battle my company had with HMRC about the value of EMI scheme shares? That's another tax beneficial scheme. Bad?
What about my gift aids and the tax I get refunded for them? Bad?
Perhaps the world of the daily wail reader is more black and white than mine, but I'm (unusually) with Supermono on this. Tax avoidance? b
ks.BB
Net result to all concerned? Government would lose out on £117m. Whiich would mean £6m to Disney, £44m to the partners and the rest to investors. It was never legal, just a load of far too clever accountants and lawyers tried to figure out how to screw the system. Final result - HMRC sued and won. Tough luck lads!
Elroy Blue said:
Utter nonsense.
It never ceases to amaze me how it's deemed perfectly acceptable to avoid tax, but then the same person will rage at those that claim benefits with bogus bad backs and the like.
You can say it's legal, but it doesn't make it morally right. But you can continue to feel smug and label all those that see the similarity in the two camps as 'Daily Mail types' or flat capped commies complaining about the rich.
So you don't use your tax code to avoid tax? Or rather if you do you're a hypocrite.It never ceases to amaze me how it's deemed perfectly acceptable to avoid tax, but then the same person will rage at those that claim benefits with bogus bad backs and the like.
You can say it's legal, but it doesn't make it morally right. But you can continue to feel smug and label all those that see the similarity in the two camps as 'Daily Mail types' or flat capped commies complaining about the rich.
SM
Elroy Blue said:
Utter nonsense.
It never ceases to amaze me how it's deemed perfectly acceptable to avoid tax, but then the same person will rage at those that claim benefits with bogus bad backs and the like.
You can say it's legal, but it doesn't make it morally right. But you can continue to feel smug and label all those that see the similarity in the two camps as 'Daily Mail types' or flat capped commies complaining about the rich.
A starter for 10...It never ceases to amaze me how it's deemed perfectly acceptable to avoid tax, but then the same person will rage at those that claim benefits with bogus bad backs and the like.
You can say it's legal, but it doesn't make it morally right. But you can continue to feel smug and label all those that see the similarity in the two camps as 'Daily Mail types' or flat capped commies complaining about the rich.
A person paid £25,000 a year is required by their job to travel in order to visit clients. He is offered the choice of a fully expensed company car or £5000 additional salary to fund their own.
He works out that he will save £150 a month in income tax if he buys his own car, so takes that route.
Where does he stand morally with you? Is he a tax avoiding parasite, or just being tax efficient?
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