Billions lost to Tax Avoidance

[Don]

http://news.bbc.co.uk/1/hi/business/4

bbc said:

Billions 'lost to tax avoidance' A special unit has been set up to tackle the problem About £10bn is being lost by the government each year to tax avoidance schemes, according to HM Revenue & Customs (HMRC). The figure is equal to almost 3p on the basic rate of income tax. In a bid to tackle the issue, the HMRC has set up a special unit that will investigate such schemes. But those accused of tax avoidance say they are doing nothing illegal and argue they are merely better at using the tax system than the HMRC is. BBC Two's The Money Programme reports the owner of BHS, Philip Green, and his family saved themselves nearly £300m last year by living partly in Monaco, where residents do not have to pay income tax. The Money Programme is on Thursday, 2 March, at 2200 GMT on BBC2

Billions "lost", eh?

It wasn't lost. It was never lost. The money NEVER belonged to the Government. The Government makes the rules. People play by them. Then some at the Revenue ain't happy about the result?

These people aren't "avoiding" tax. They are simply making sure they pay the right amount.

[wolves_wanderer]

With this government it isn't about how much tax they take it's how much pocket money they will allow us to keep.

[ahonen]

bbc said:

The figure is equal to almost 3p on the basic rate of income tax.

Presumably they'll be taking 3p off the basic rate when they've closed all the loopholes then?

No? Thought not... Theiving b'stards.

[angusfaldo]

Revenue even recently regulated to force tax planning companies to agree their ideas with them before they were allowed to implement them for clients.

Nice one. That means all the hard work put into designing good schemes is lost when it gets into the public domain after having to agree it with revenue

They want to make the laws and the force the taxpaying public to test them to help them make it watertight. Tossers. Mind you that strategy sounds like the one used by a certain niche sports car manufacturer, hey! Build them and get the customers to test them!

[victormeldrew]

Count on this new body targetting small businesses and individuals trying to "avoid" high rate tax. Count equally on them not starting with department store owners whose business interests are in their wife's name when the wife lives in Monaco, so they can pay multimillion pound dividends and not pay a penny in tax. Or spouses of government ministers who take kickbacks then try to avoid paying tax on them.

No, the soft targets will be those who don't actually have the resources to pay for expensive lawyers and accountants to protect their interests.

More IR35 and Section 660 bollox.

How about controlling the runaway spending of taxes on new government bodies, so less tax was needed in the first place?

[bermyandy]

What happens is a scheme gets produced, run by the inland revenue, who agree it and assign it a code. A year or two later, they publish a list of schemes and their associated codes which they are 'investigating'. Sometimes they just go after the company you work for, but you've always got to be prepared they will go after the individual.

Anyway, its not tax avoidance, its tax delay. You will stand a very high chance of being liable to repay the tax element. Unless your non-dom, in which case you get the lot tax free... now they really are thieving ba*tards!!

[JonRB]

Don said:

It wasn't lost. It was never lost. The money NEVER belonged to the Government. The Government makes the rules. People play by them. Then some at the Revenue ain't happy about the result? These people aren't "avoiding" tax. They are simply making sure they pay the right amount.

Totally agree with you, Don.

Similarly when the government cooks up a scheme to save "literally millions of pounds of taxpayers money", whilst in reality it actually means "reducing the amount of taxpayers money we waste / piss away by a few million".

Reminds me of the rather worrying IR591 bulletin, which thankfully didn't get enacted to the degree I was worried it might, that talked about making sure that the owners of PSCs paid "the right amount of tax". Hmmmmmmm. By whose definition?

[JonRB]

victormeldrew said:

Count on this new body targetting small businesses and individuals trying to "avoid" high rate tax. [...] More IR35 and Section 660 bollox.

I fear you may be right there.

This government (and also the big businesses that pull their strings) simply doesn't like the concept of freelancers. They want us all stamped, bar-coded, PAYE'd, NI'd and slaved to an employer.

[timmy30]

Given that according to the OECD the UK government wastes £85bn a year maybe they should tackle that issue before trying to confiscate another £10bn of private capital.

[simpo two]

If taxes were lower, fewer people would try less hard to avoid them.

I see even the Channel Islands are caving in on their VAT-exempt status under EU pressure, so kiss goodbye to cheap supermarket CDs abd DVDs.

[Eric Mc]

Good article on this subject in yesterday's times. The Institute of Taxation think that the Government should devote more time and effort into making tax LESS complicated, not more.

Do you think that they will start outlawing the activities of Tessa Jowells' husband then?

[TeamD]

simpo two said:

If taxes were lower, fewer people would try less hard to avoid them. I see even the Channel Islands are caving in on their VAT-exempt status under EU pressure, so kiss goodbye to cheap supermarket CDs abd DVDs.

But the channel islands aren't in the EU. They're not even technically part of the British Isles.

[timmy30]

TeamD said:

simpo two said: If taxes were lower, fewer people would try less hard to avoid them. I see even the Channel Islands are caving in on their VAT-exempt status under EU pressure, so kiss goodbye to cheap supermarket CDs abd DVDs. But the channel islands aren't in the EU. They're not even technically part of the British Isles.

True but alot of diplomatic pressure has been bought to bear on them.

[simpo two]

timmy30 said:

True but alot of diplomatic pressure has been bought to bear on them.

Yes. Their Financial Minster chap was on R4 saying he'd stopped the CD/DVD practice because it didn't contribute to the CI economy. WHen asked if jobs wuld be lost, he admitted to 'restructuring'. So jobs have been lost and the economy has suffered for a reason he can't bring himself to admit publicly.

And as anyone who had CI accounts will know, WEF from about July last year the relevant bank had to inform Mr Brown about it.

It's just the EU squeezing the pips from every damn place they can find to try to keep their tottering state, sorry, socialist experiment, from collapsing.

[slapmatt]

victormeldrew said:

Or spouses of government ministers who take kickbacks then try to avoid paying tax on them.

Interesting point.

I wonder how much tax Mr Jowell paid on his £350k?

[cy88]

simpo two said:

I see even the Channel Islands are caving in on their VAT-exempt status under EU pressure, so kiss goodbye to cheap supermarket CDs abd DVDs.

Nowhere near 17.5 % though. 5% is mooted figure. Also, the implementation of VAT is not a "caving in" to EU pressure to implement the same. Rather to counter the lost revenue that will result once 0% rate on corporate profits is implemented in the next few years. So, most companies based in Jersey will soon be paying no tax on profits whatsoever.

www.gov.je/ChiefMinister/International+Finance/Tax+Initiatives/

[alfaman]

anonymous said:

[redacted]

From what I've read the "loopholes" they are targetting ARE the ones only used by the "super rich " - e.g : getting your £1m bonus paid in gold to avoid employers NI , getting a multi-million £ "salary" paid via an offshore loan to avoid tax.

It's not unreasonable to expect multi-million earning directors to pay *some* tax is it ?

And I really doubt the business *would* go elsewhere as the UK still taxes less than most other countries - just that some entrepereneurs would base their businesses in Monaco for tax purposes - while still employing people in UK / mainland Europe.

[timmy30]

alfaman said:

the UK still taxes less than most other countries - just that some entrepereneurs would base their businesses in Monaco for tax purposes - while still employing people in UK / mainland Europe.

Ahem, I think you'll find that the low tax legacy put in place by the conservatives has now been entirely squandered and that the UK tax take has now supassed even Germany.

We don't have a business friendly government anymore, wakey wakey we're back in the 70's. Can't wait for Gordon to dig up that speech about "Taxing the rich until the pips squeek"

[alfaman]

timmy30 said:

alfaman said: the UK still taxes less than most other countries - just that some entrepereneurs would base their businesses in Monaco for tax purposes - while still employing people in UK / mainland Europe. Ahem, I think you'll find that the low tax legacy put in place by the conservatives has now been entirely squandered and that the UK tax take has now supassed even Germany. We don't have a business friendly government anymore, wakey wakey we're back in the 70's. Can't wait for Gordon to dig up that speech about "Taxing the rich until the pips squeek"

I agree with what you say - taxes are now much much higher than under the Conservatives (not sure Germnay tax less though ) - and the Labour Govt piss away billions on useless feckwittetd schemes , and Labour needs to be more "pro" business.

My point was really that whatever the tax regime is ( and its a high tax one right now ) - the tax burden should be evenly shared , rather than one where if you are mega rich you don't pay any tax.

[fido]

alfaman said:

anonymous said: [redacted] From what I've read the "loopholes" they are targetting ARE the ones only used by the "super rich " - e.g : getting your £1m bonus paid in gold to avoid employers NI , getting a multi-million £ "salary" paid via an offshore loan to avoid tax. It's not unreasonable to expect multi-million earning directors to pay *some* tax is it ? And I really doubt the business *would* go elsewhere as the UK still taxes less than most other countries - just that some entrepereneurs would base their businesses in Monaco for tax purposes - while still employing people in UK / mainland Europe.

agreed. i remember a specific case involving the 'Ghostbusters' (dedicated team set up by the IR) and a certain Egyptian shopkeeper in Knightsbridge. (allegedly) he managed to negotiate with these guys to fix his income tax at six figures (something like £150,000 p.a.) which is a complete joke, and this business is in the UK. the IR then tried to chase him for more with little success. there's avoiding tax and there's AVOIDING tax. still at least he didn't get a friggin' passport

if someone makes millions they can afford to pay a reasonable % of this. i'm all for shopping the dodgy tradesperson who does stuff on the cheap (& does a runner when it goes wrong), but why start with these small fry. 'so wot you gonna do about it?!' - i actually like those ads.


>> Edited by fido on Thursday 2nd March 10:40