With all this talk about tax avoidance (not evasion) has got me wondering. How does it work and what are the options? For example, I guess that paying into an ISA could be considered avoidance and paying into my personal pension, that could be considered avoidance.

However, what about the 'immoral' methods used by the likes of Jimmy Carr, what sort of schemes are they?

Wayne Rooney's commercial rights income is paid into a Jersey company and he takes the money back as a loan and pays an effective personal tax rate of 2% or so - this was in the press a year or so ago.

The Government are introducing a general anti-avoidance clause into legislation at the moment - the idea being that any transaction will be taxed in a way that the "man on the street" would expect so all these loan schemes would immediately be treated as salary advances.

David

So essentially the person gets paid without tax and then shunts it all off-shore. So PAYE etc isn't taken at source.

Sounds like a nice deal!! I can see why people would be upset by it going on.

So, the individual is a company as such, what would stop an individual doing something similar with an employer? So they became a company and their employer hired their services. I'm sure there are loads of reasons from a company and admin perspective, but I'm guessing it's roughly similar and 'sort of' above board?

I'm not - but not being party to his tax arrangements, I can't really say.

So, you think that paying VAT covers your legal amd noral obligation to pay tax?

I think you need to read up on UK tax regulations.

Tax in what way? Via PAYE or VAT on purchases he makes?

BTW: I don't want to turn this into an argument about the rights or wrongs on doing this, I was just interested in how it all worked...

One thing's for sure...Peak Performance Accountants are going to be getting a lot of phone calls today!

I agree it is a problem with the HMRC being able to efficiently close these loopholes off, maybe they need greater powers? However,there was a topic on this a while ago when the retrospective clause was introduced about the IOM [-]scam[/] scheme and I think you will find there are a lot of people who didn't chose to go down these routes. I was offered similar schemes to reduce tax to about 7% and i said no. I think 50% is too high but I actually want a Police force, fire brigades and NHS, roads, schools, universities etc etc etc.

There are far too many people who are out just for themselves and actually don't realise that it is the society in which they grew up that afforded them the opportunity to make those vast sums of money. And yes, that include Mr Rooney. Those council funded football groups he went to when he was 5, and the school fields he played on. Oh and that teacher that first encouraged him to play football properly and then sent him to Everton trials.

Or we could just take your view and fk everyone else.

People need to examine their consciences, if they have any.