Tax avoidance. Is this really spell evasion? Time to change
Discussion
The latest information put before the Chancellor by the Inland Revenue has shown that tax avoidance wiyhin the UK has reached epidemic proportions in the UK.
Apparently the Chancellor is shocked see:
http://www.bbc.co.uk/news/business-17665780
He would be.
Given his complete lack of gravitas earning him the Boy George nickname this is unsurprising.
But looking at the figures widely quoted, I do think a radical overhaul in the tax regulations, giving a much lower propensity for the wealthy to avoid tax, has to be considered.
From the information within the article above a small number of very wealthy individuals saved £145 Million pounds in tax liabilities by creative avoidance and reduced their average overall tax rate to 10% in 2012.
Less than most middle earners are paying in percentage terms. Certainly less than most professional couples. I can see this becoming a real problem.
There are downsides to any action. Many of the super rich choose to live in the UK and spend huge sums of money within the UK. Look at the spin offs from Abramovitch and the like spending hundreds of millions on UK sport.
There is a real risk that any alteration could alienate the big spenders who chose to live in the UK. Not something to ignore.
But creative avoidance at this level must create serious disquiet amongst the electorate. And no politician can afford that.
Time for a permanent change? I rather think so.
Apparently the Chancellor is shocked see:
http://www.bbc.co.uk/news/business-17665780
He would be.
Given his complete lack of gravitas earning him the Boy George nickname this is unsurprising.
But looking at the figures widely quoted, I do think a radical overhaul in the tax regulations, giving a much lower propensity for the wealthy to avoid tax, has to be considered.
From the information within the article above a small number of very wealthy individuals saved £145 Million pounds in tax liabilities by creative avoidance and reduced their average overall tax rate to 10% in 2012.
Less than most middle earners are paying in percentage terms. Certainly less than most professional couples. I can see this becoming a real problem.
There are downsides to any action. Many of the super rich choose to live in the UK and spend huge sums of money within the UK. Look at the spin offs from Abramovitch and the like spending hundreds of millions on UK sport.
There is a real risk that any alteration could alienate the big spenders who chose to live in the UK. Not something to ignore.
But creative avoidance at this level must create serious disquiet amongst the electorate. And no politician can afford that.
Time for a permanent change? I rather think so.
On the other hand, wealthier people in general are more likely to use private education, private health services, private transport with its attendant taxes, and spend larger amounts on consumption and energy taxes. They are likely to consume the national average of defence, justice, and overseas aid. They clearly consume fewer state resources than the average citizen, and yet they are levied significantly more in absolute terms in personal taxes.
Why is this deemed equitable ?
The guardianistas will hurry to the barricades with "from each according to their means", but why are we not clamouring for a much fairer approach of "from each, an equal contribution" ?
Why is this deemed equitable ?
The guardianistas will hurry to the barricades with "from each according to their means", but why are we not clamouring for a much fairer approach of "from each, an equal contribution" ?
The suggestion seems to be that some of the charities are not so genuinue. I do know one Charity that raised £1.1mill from a scheme that saved some organisations £3mill in tax. However to generate that £1.1 mill cost them £900,000 now in my view thats not really charitable giving.
I guess one needs to know why these people earning so much are giving so much away and how do they pay theit living expenses as a result.
I guess one needs to know why these people earning so much are giving so much away and how do they pay theit living expenses as a result.
Newc said:
On the other hand, wealthier people in general are more likely to use private education, private health services, private transport with its attendant taxes, and spend larger amounts on consumption and energy taxes. They are likely to consume the national average of defence, justice, and overseas aid. They clearly consume fewer state resources than the average citizen, and yet they are levied significantly more in absolute terms in personal taxes.
Why is this deemed equitable ?
The guardianistas will hurry to the barricades with "from each according to their means", but why are we not clamouring for a much fairer approach of "from each, an equal contribution" ?
Well because they were given the chance to earn that money they should pay a lot more into the system than 0. Why is this deemed equitable ?
The guardianistas will hurry to the barricades with "from each according to their means", but why are we not clamouring for a much fairer approach of "from each, an equal contribution" ?
People need to learn that paying tax of 10% or even less on a metric sh!tload of cash still results in a sh!tload of tax being raised, whereas paying 20% on peanuts results in less than peanuts being raised.
So, the super rich aren't paying less tax than you and your monkey friends.
Or perhaps more convincingly:
So, the super rich aren't paying less tax than you and your monkey friends.
Or perhaps more convincingly:
BBC said:
The top 1% of earners - just 300,000 people - pay 27% of all income tax.
http://www.bbc.co.uk/news/uk-politics-15843746The charities fiddle has been going on for years.
There was a major investigation by the revenue into Rossminster in the 1970's run by Roy Tucker and others which was well outside the boundaries in tax avoidance. I am old enough to remember the case. All based upon the improper use of charities.
By using remarkable guile all the protagonists avoided prosecution but the firm and scheme was buried.
The essence of the problem with major tax avoidance is that the obvious unfairness grates on the other taxpayers not able to enjoy such largesse.
I think if the electorate really knew the extent which non domiciled and non resident status for tax purposes was abused by the wealthy few, there would be an unstoppable determination for this practice to cease.
However, as every observer knows, the establishment looks after its own. Particularly the Conservative establishment. Look at the David Cameron/Rebecca Wade/Andy Coulson fiasco.
However, in this instance, I do think changes are coming, forced on the government by the widespread perception that these practices are unacceptable and unfair.
There was a major investigation by the revenue into Rossminster in the 1970's run by Roy Tucker and others which was well outside the boundaries in tax avoidance. I am old enough to remember the case. All based upon the improper use of charities.
By using remarkable guile all the protagonists avoided prosecution but the firm and scheme was buried.
The essence of the problem with major tax avoidance is that the obvious unfairness grates on the other taxpayers not able to enjoy such largesse.
I think if the electorate really knew the extent which non domiciled and non resident status for tax purposes was abused by the wealthy few, there would be an unstoppable determination for this practice to cease.
However, as every observer knows, the establishment looks after its own. Particularly the Conservative establishment. Look at the David Cameron/Rebecca Wade/Andy Coulson fiasco.
However, in this instance, I do think changes are coming, forced on the government by the widespread perception that these practices are unacceptable and unfair.
youngsyr said:
People need to learn that paying tax of 10% or even less on a metric sh!tload of cash still results in a sh!tload of tax being raised, whereas paying 20% on peanuts results in less than peanuts being raised.
So, the super rich aren't paying less tax than you and your monkey friends.
Or perhaps more convincingly:
It's no use trying to explain the concept of %ages to people so angry about their lot in life that basic mathematics escapes them.So, the super rich aren't paying less tax than you and your monkey friends.
Or perhaps more convincingly:
BBC said:
The top 1% of earners - just 300,000 people - pay 27% of all income tax.
http://www.bbc.co.uk/news/uk-politics-15843746Tax Avoidance = the govt not being able to construct a tax regime that isn't like Swiss cheese.
Why tax avoidance is being used as a dirty phrase these days I do not know. If given the choice of paying 20 quid in or 10 quid in, both of which are perfectly within the law, I don't think you'll find many paying the former. Especially in the context of what our taxes get wasted on.
Also, 145 million quid is a mere drop in the ocean of everything else that gets wasted/spent. Something like a few hours of the deficit we're running?
LHRFlightman said:
I'd like to pay 10% tax. Why can't I? Why do I have to be in the top 1% of all earners? Where us it written down that once I get to that exclusive club, my tax bill drops!
You could pay 10%. The problem is that it would cost you more to create the structures to achieve that goal than your savings would amount to.
There is, sadly one set of rules for the very wealthy and one set of rules for the plebes (us).
That is why I think change is inevitable.
LHRFlightman said:
I'd like to pay 10% tax. Why can't I? ...
Because your failure to grasp basic mathematical principles likely excludes you from most forms of employment that would result in your tax bill being large enough to warrant investigating alternative tax strategies.Ask not what percentage they are paying, but how much they are paying (and if we really want to extend the argument, how much benefit they are likely receiving in return). If they're then paying less than you, but earning more, moan all you like.
how can a charitable contribution create a tax saving greater than the contribution? surely all a contribution does is lower your taxable income? are you implying that the contributors are in some way beneficiaries of the charitys; if so how is that avoidance and not evasion/fraud?
i cant help think people are just jealous of others with enough money to give away. funny country.
i cant help think people are just jealous of others with enough money to give away. funny country.
top 1% already pay a large proportion of total income tax.
I expect if you include indirect taxes like Vat and SDLT and stamp duty on shares and capital gains tax and corporation tax for SMEs with less than 10 employees - I reckon the top 1% would possibly pay even more than 28% of total tax revenues.
The can AFFORD more - but affordability is subjective and irrelevant.
If the tax rate was structured such that it was either a flat rate or capped at a maximum annual figure, I expect there would be less effort to avoid. It wouldn't disappear - there will always be some who want to pay nothing - but avoidance could be reduced by reducing the amount expected of those who already contribute the most
I expect if you include indirect taxes like Vat and SDLT and stamp duty on shares and capital gains tax and corporation tax for SMEs with less than 10 employees - I reckon the top 1% would possibly pay even more than 28% of total tax revenues.
The can AFFORD more - but affordability is subjective and irrelevant.
If the tax rate was structured such that it was either a flat rate or capped at a maximum annual figure, I expect there would be less effort to avoid. It wouldn't disappear - there will always be some who want to pay nothing - but avoidance could be reduced by reducing the amount expected of those who already contribute the most
Steffan said:
However, as every observer knows, the establishment looks after its own. Particularly the Conservative establishment. Look at the David Cameron/Rebecca Wade/Andy Coulson fiasco.
The Conservative establishment may well look after their own, but that doesn't explain why the previous lot did nothing to clamp down on avoidance schemes during their 13 year window of opportunity? We can run around demonising "clever accountants" all we like, but if they're exploiting perfectly legal loopholes, the buck must surely stop with HMRC and those in charge of it? Either they know what's going on and are doing nothing to stop it (or at best letting people off with a slap on the wrist), or they're simply not as clever as the tax experts in industry. Either way the onus is surely on them to get their tax code in order so people don't have any loopholes to exploit in the first place?youngsyr said:
People need to learn that paying tax of 10% or even less on a metric sh!tload of cash still results in a sh!tload of tax being raised, whereas paying 20% on peanuts results in less than peanuts being raised.
So, the super rich aren't paying less tax than you and your monkey friends.
Or perhaps more convincingly:
Just to round that circle and blow away any smoke, is there a link to a stat that shows what the top 1% actually earn as a percentage of all incomes to see if it is fair percentage. So, the super rich aren't paying less tax than you and your monkey friends.
Or perhaps more convincingly:
BBC said:
The top 1% of earners - just 300,000 people - pay 27% of all income tax.
http://www.bbc.co.uk/news/uk-politics-15843746Out of interest, the 20% from monkeys is still 73% of income tax collected, not I think you'll agree, a lesser percentage, or simply peanuts.......
To clarify, I have no objections to people earning shed loads of money, I lean to the right myself, however in society everyone is equal and should be taxed equally. At those returns there is a very strong argument for a flat rate of 25%, no excuses after say a 10k threshold, would actually generate more tax revenue.
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