Aggressive tax avoidance.
Discussion
Not convinced retrospective application of "plugged holes" is a good thing. Where do they stop if they are perfectly able to do this?
Plug the hole by all means. Then employ their tax advisors if we can afford them. Leaving the hole is the fault of whomever in HMRC wrote the rules, not those guiding their money through the holes.
Plug the hole by all means. Then employ their tax advisors if we can afford them. Leaving the hole is the fault of whomever in HMRC wrote the rules, not those guiding their money through the holes.
High tax rates make the cost of aggressive tax prep viable.
If rates were tolerable and fair then less time would be spent/wasted on reducing tax liability and more time spent on making a simple profit.
While this new breed of politicians are hell bent of helping every small group of unfortunates and ignoring the regular wage or business owner things are not going to get better.
Whining about somebodies couple of million while they fritter away a couple of billion is not great management.
Being rich, or trying to become rich should not be penalised.
If rates were tolerable and fair then less time would be spent/wasted on reducing tax liability and more time spent on making a simple profit.
While this new breed of politicians are hell bent of helping every small group of unfortunates and ignoring the regular wage or business owner things are not going to get better.
Whining about somebodies couple of million while they fritter away a couple of billion is not great management.
Being rich, or trying to become rich should not be penalised.
jeff m2 said:
High tax rates make the cost of aggressive tax prep viable.
If rates were tolerable and fair then less time would be spent/wasted on reducing tax liability and more time spent on making a simple profit..
Agreed but just combined with companies/people that won't dodge the taxesIf rates were tolerable and fair then less time would be spent/wasted on reducing tax liability and more time spent on making a simple profit..
thinfourth2 said:
Agreed but just combined with companies/people that won't dodge the taxes
Not quite sure what you meant by that?Only thing that will come out of this is that companies with big tax bills will spend a lot more money looking for ways to reduce the taxes, that being their duty. Even on the understanding that Barclays were almost certainly expecting to pay this, its still going to be a bitter pill to swallow.
jeff m2 said:
If rates were tolerable and fair then less time would be spent/wasted on reducing tax liability and more time spent on making a simple profit.
This is something that most people don't want to see.I spent many years concentrating purely on profits. My rationale was that if you didn't have profit, then nothing else was important.
When the 50% rate came in I looked at my tax affairs, and discovered that I was being absolutely shafted. I now pay (legally) much less tax than I did three years ago. I haven't done anything elaborate.
"Tax avoidance" is a rather emotive phrase that is used by politicians with an axe to grind. All it means is not paying any more than you need to. Every time that a PAYE employee questions their tax code, they are engaged in "tax avoidance".
"Retrospectively plugging a tax loophole" sounds great to the general public, who don't quite understand what it means.
Claiming tax relief on pension contributions is tax avoidance. If the government decided to retrospectively abolish tax relief on these contributions, then there would be a huge public outcry.
What the government is doing with Barclays will raise sod all, and do enormous damage to investor confidence. It is a cheap populist move that can do no good at all.
Don
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don4l said:
I spent many years concentrating purely on profits.
This has, for some time been the tactic of hedge funds and private equity; keep the senior debt in a low-tax zone and reap the benefits there.A freind of mine who co-owned two truck dealerships had a customer in Merseyside who financed all his HGVs through his own investment company, based in the Caymans.
don4l said:
jeff m2 said:
If rates were tolerable and fair then less time would be spent/wasted on reducing tax liability and more time spent on making a simple profit.
This is something that most people don't want to see.I spent many years concentrating purely on profits. My rationale was that if you didn't have profit, then nothing else was important.
When the 50% rate came in I looked at my tax affairs, and discovered that I was being absolutely shafted. I now pay (legally) much less tax than I did three years ago. I haven't done anything elaborate.
"Tax avoidance" is a rather emotive phrase that is used by politicians with an axe to grind. All it means is not paying any more than you need to. Every time that a PAYE employee questions their tax code, they are engaged in "tax avoidance".
"Retrospectively plugging a tax loophole" sounds great to the general public, who don't quite understand what it means.
Claiming tax relief on pension contributions is tax avoidance. If the government decided to retrospectively abolish tax relief on these contributions, then there would be a huge public outcry.
What the government is doing with Barclays will raise sod all, and do enormous damage to investor confidence. It is a cheap populist move that can do no good at all.
Don
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Sadly, the chances of missing the brain are high.
Countdown said:
It appears that Barclays tried to circumvent the rules and were stepped on.
My view is fairly simple; if you want to enjoy the benefits of living in this country then follow the rules. If you don't then please feel free to leave.
Except that is patently untrue. Barclays followed the rules. There's an easy way to tell that they did this - there are no penalties. Not one penny. And that from a system that delights in slapping penalty charges on if you dare to be late by even one day.My view is fairly simple; if you want to enjoy the benefits of living in this country then follow the rules. If you don't then please feel free to leave.
They followed the rules as written. I'd suggest that they told HMRC exactly what they were doing, and it's taken HMRC a while to decide that the rules allowed it, but that that's not what they actually meant when they wrote them.
To borrow a particularly irking phrase, fair's fair. Except when they don't want it to be.
randlemarcus said:
Countdown said:
It appears that Barclays tried to circumvent the rules and were stepped on.
My view is fairly simple; if you want to enjoy the benefits of living in this country then follow the rules. If you don't then please feel free to leave.
Except that is patently untrue. Barclays followed the rules. There's an easy way to tell that they did this - there are no penalties. Not one penny. And that from a system that delights in slapping penalty charges on if you dare to be late by even one day.My view is fairly simple; if you want to enjoy the benefits of living in this country then follow the rules. If you don't then please feel free to leave.
They followed the rules as written. I'd suggest that they told HMRC exactly what they were doing...
Retrospective tax grabbing, luvverly it isn't but it seems to please the envyists and equality via mediocrity seekers who want corporate not-quite-success along with no-worse-than-anywhere-else expectations.
Soon with shining lights such as libdim Vince Cable at the helm we'll be world leaders in being distinctly average and overly taxed.
randlemarcus said:
Except that is patently untrue. Barclays followed the rules. There's an easy way to tell that they did this - there are no penalties. Not one penny. And that from a system that delights in slapping penalty charges on if you dare to be late by even one day.
They followed the rules as written. I'd suggest that they told HMRC exactly what they were doing, and it's taken HMRC a while to decide that the rules allowed it, but that that's not what they actually meant when they wrote them.
We may be arguing semantics. Barclays interpretation of the rules wasn't the same as HMRCs and that's why they've been told to stump up the tax. HMRC haven't changed any rules to my knowledge.They followed the rules as written. I'd suggest that they told HMRC exactly what they were doing, and it's taken HMRC a while to decide that the rules allowed it, but that that's not what they actually meant when they wrote them.
turbobloke said:
Retrospective tax grabbing, luvverly it isn't but it seems to please the envyists and equality via mediocrity seekers who want corporate not-quite-success along with no-worse-than-anywhere-else expectations.
I don't think it's got anything at all to do with envy. It's an expectation that people will pay their fair share (as set out by Government) when they are prepared to enjoy the benefits that operating in a particular society provides.Countdown said:
We may be arguing semantics. Barclays interpretation of the rules wasn't the same as HMRCs and that's why they've been told to stump up the tax. HMRC haven't changed any rules to my knowledge.
Barclays said:
it had "voluntarily disclosed" the existence of the schemes to HMRC and that it had received "guidance from professional advisors that the treatment was both legal and compliant with the tax code, and given others had used a similar treatment".
[/quote/
If HMRC aren't changing the rules, what the heck are they spending £500m on? That's an awful lot of red pens.
[/quote/
HMRC said:
the blocking of the scheme would cost £500m and save "further billions of tax from being lost". The further £200m is accounted for by what a Treasury source described as the "additional effect of the policy change". [It is not clear exactly what this cost refers to].
Barclays followed the rules as they understood them, to the point of informing HMRC of their actions, and reserving the payment in their accounts.If HMRC aren't changing the rules, what the heck are they spending £500m on? That's an awful lot of red pens.
Countdown said:
It appears that Barclays tried to circumvent the rules and were stepped on.
Utter rubbish!There would be no need for retrospective legistlation if this were true.
Not only did they make no attempt to circumvent any rules, they actually ran their scheme past HMRC and recieved no objections.
Don
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It's not exactly been explained precisely what the sequence of events were. There is an element iof retrospective legislation here but it is probably being applied within the remit of the already existing Anti-Avoidance Rules, which Barclays would have been well aware of.
If an entity such as a bank or firm of accountants devises a complex but perfectly legal scheme to avoid tax, the rules state that the scheme MUST be submitted to HMRC to allow the tax authorities to see how the scheme works and pass a ruling on the validity of the scheme. This legislation has been in place for the best part of a decade. Not all schemes are shut down as a result of these procedures.
Barclays seem to have done the "right thing" in submitting the scheme to HMRC for review. But what I guess happened is that Barclays waited until the last possible moment to submit the scheme for review i.e. they would have made the most of the "window" set out in the legislation within which the details must be submitted. There would also have been a time delay - perhaps quite a lengthy one - whilst HMRC went through the scheme with a fine tooth comb.
HMRC have reviewed the scheme, found they didn't like it - and therefore rejected it. The scheme therefore does not work and NEVER worked. Therefore HMRC can order that uncollected taxes can be recovered dating back to the commencement of the scheme. This is the "retrospective" nature of the legislation - which has been there since the legislation was enacted years ago. It is not a "new thing" and it is something Barclays would have been aware of before the scheme was set up.
They took a punt and on this occasion it didn't pay off.
By the way, the actual amount payable by Barclays was confirmed on Newsnight last night at £300 million, not £500 million. The additional £200 million is an estimate of the amount that would have been lost if the scheme had been allowed to continue until the end of the tax year.
If an entity such as a bank or firm of accountants devises a complex but perfectly legal scheme to avoid tax, the rules state that the scheme MUST be submitted to HMRC to allow the tax authorities to see how the scheme works and pass a ruling on the validity of the scheme. This legislation has been in place for the best part of a decade. Not all schemes are shut down as a result of these procedures.
Barclays seem to have done the "right thing" in submitting the scheme to HMRC for review. But what I guess happened is that Barclays waited until the last possible moment to submit the scheme for review i.e. they would have made the most of the "window" set out in the legislation within which the details must be submitted. There would also have been a time delay - perhaps quite a lengthy one - whilst HMRC went through the scheme with a fine tooth comb.
HMRC have reviewed the scheme, found they didn't like it - and therefore rejected it. The scheme therefore does not work and NEVER worked. Therefore HMRC can order that uncollected taxes can be recovered dating back to the commencement of the scheme. This is the "retrospective" nature of the legislation - which has been there since the legislation was enacted years ago. It is not a "new thing" and it is something Barclays would have been aware of before the scheme was set up.
They took a punt and on this occasion it didn't pay off.
By the way, the actual amount payable by Barclays was confirmed on Newsnight last night at £300 million, not £500 million. The additional £200 million is an estimate of the amount that would have been lost if the scheme had been allowed to continue until the end of the tax year.
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