Hey, I’m happy for income tax to rise to 50% or more but that would include every single worker. The fact that we have to have charities in the first place is disgraceful.
Apologies, I should have said ‘morally repugnant’.
To equate having an ISA or using supermarket special offers with having your salary paid ‘tax-free’ via an offshore company in Mauritius is ludicrous.
Hi David, so will you be sending 50% of your annual income to the authorities as a first step in funding a state than can take over the place of charities?
Why? I’ve always paid the amount due, in my line of work there were very few deductions possible. I pay tax on my main income in the U.K. and if the income tax rates were to rise by two or three percent across the board I would be happy to pay. The increase in revenue to the exchequer who be enormous and solve so many problems but it is not a vote winner so it is unlikely to happen. White van man and the like would be up in arms.
Hi David, that was for the other David who was happy for tax to be >50%
Almshouses and Relief for the Poor… have been with us for centuries…there is no easy solution… or so it seems…
However, I do agree that it would/might make a difference if all illegal tax avoidance was crushed…and the money re-gained …
I leave it to the rest of you to discuss legal tax avoidances…
Ray when I was working, retired a couple of years ago at 50, I was paying 45% and contributed to a children’s hospice (still contributing)
1 Like
I see that you are correct - I’m sure they didn’t have the “bending the rules” bit in the past, if I have time I will try to see if that is something which changed recently. The more commonly accepted definition is using legal means to reduce one’s liability to tax.
I only gave it a brief skim but broadly I agree with the analysis put forward by HMRC - that most avoidance “schemes” are probably evasion dressed up so as to look like something more palatable.
As to “nobody has worked out how to make it illegal” that is untrue. HMRC regularly check the schemes and can decide to declare a given scheme to be outwith the rules. In which case they simply go after people for the unpaid tax (plus throw in some punitive charges for filing an incorrect return). Or they grudgingly admit that it is legal and work on closing the loophole. In fact (admission of self interest here) I did take part in a scheme in the early 2000’s as part of a floatation by my then employer. Some “imaginative” use was made of charitable donations which expanded the pot of money we got quite a bit and employees were invited to take part.
I think I netted about £1.5k so I do not, I am afraid, think of myself as criminal of the century.
Also I hasten to add this was fully declared to HMRC who did investigate the mechanism used and essentially said it was OK (in the end the individuals involved got charged 10% of the “gain”).
In any case you need to think about this in the wider context. If the government does not get its hands on my money what happens to it - well I might spend it (20% VAT, taxes on the profits of whoever I buy from etc) or I might invest it (making it available in the money market and potentially yield taxable gains). If you let Mr Rooney keep his £5 million and don’t frighten him away he might buy property, employ staff etc. The economy is closed and the government has a way to get its sliver of silver off almost any transaction that you engage in.
Turning to David’s post I, too, would agree with most of what he says - we do seem to have an attitude towards contributing to the common purse which has more in common with the USA (and look what a mess they are in) than, say, France. I am not sure whether this is due to Thatcherism per se or a backlash against the totally punitive tax burden in the 70’s but it persists even today.
Hi David N,
I can see that you’ve paid the highest tiers of income tax into the pot and you’ve elected to make charitable donations - both of which are very clear contribution to any society. One mandatory and one voluntary.
To be clear I wasn’t trying to have a go at you, this is more about where lines are drawn in people’s minds.
Do People Understand Their Real Complaint
"No-one, from politicians to journalists to the “man on the Clapham omnibus” seems to be able to differentiate between use of legal schemes to reduce one’s tax burden and illegal hiding of income and assets from the HMRC with a view to fraudulently avoid paying tax."
Using the older generally accepted meaning of ‘avoidance’ to mean legal reduction of tax bill. Then if someone in the street is using legal schemes to reduce their tax bill to the legal minimum then there seems to be no issue for most of the participants in this thread issue – nobody seems to have an issue with Joe Bloggs, decent family man, putting accurate truthful numbers in his tax return and paying the minimum amount of tax.
What does come as an issue for some is when the rules are pushed, yet still without being broken. There is an element of society that seems to have a problem when the same principles employed by Joe Bloggs to minimise his tax bill are pushed by a footballer/actor etc. to do the same as Joe. The line is the same and the line is technically uncrossed.
Personally I think a lot of this anger is mis-directed. Instead of moaning about people playing the rules (albeit with more effect) people need to understand their issue. If they don’t understand what they don’t like then there’s no chance of defining a goal let alone driving a solution;
Are there issues any of the following?
Tax Structure
Are they upset with the thresholds for tax e.g. would they prefer 0-50k 0%, 50-150k 25%, >150k 90%? This seems to be the biggest point of controversy what is the minimum rate and what should be top rate and when do they kick in. It would be interesting to see how people on this forum would structure the tax bands.
Black Market
I suspect most people detest tax evasion but of those there will be a hypocritical few that have asked for a price, ‘cash-in-hand, no receipts’ knowing the community pot will be diminished by their saving.
Are Charitable Donations Self-Imposed Income Tax?
Whilst it seems like a bit of a silly question, I ask it because it has some qualities on paper and in the minds of others. If you have a bit spare and want to contribute to the pot more you can choose where it goes rather than trust the tax-man to choose on your behalf e.g. I tend to choose medical research charities ahead of other charities
I also ask this because of the following and we’re all guilty of it,Many, many people say they’d be happy to pay more income tax, at xxx rate or yyy rate but I have yet to uncover anyone from that large group who will readily admit with a sense of pride that they were successful in OVERpaying their income tax last year. You just can’t find these people that gave extra money to the tax-man. Yes I do acknowledge that many give extra voluntarily to charities but it’s not exactly the same.
I guess the main point here is the precision in the language and the maths; there are differences between black and white with many shades of grey between the two
“I’d be happy to pay more tax such as >50%” to which I would say go ahead, feel free, send cheques to HMRC.
“I’d be happy to pay tax rate of 50% if it was the minimum I could get away with and everyone was doing the same”
Of course this latter point/phrasing brings us back to the beginning, nobody sends more than the minimum to the tax man but some employ better accountants, advisors etc and some pursue the reduction of their tax bill more ruthlessly than others.
I suspect that for many people it’s not a question of ‘letter of the law’ but a question of ‘playing in the spirit of the game’.
Apologise for what?
Investing money in the Cayman Islands, an autonomous British Overseas Territory and in Bermuda another British Overseas Territory where she is Head of State…
It’s like the press comments now about Lewis Hamilton and the VAT refund.
No different to those who would buy a car in Europe and bring to the UK if it was cheaper, or indeed some years back would bring duty free into the UK from Europe…just a bit higher value 
2 Likes
The Lewis Hamilton situation is way more complex than trying to save a bit on duty free shopping or buying a car in another country. His advisers set up companies in various tax havens around the world and then set up complicated leasing arrangements between them in order to recover VAT in the Isle of Man. The only purpose served by these companies and arrangements was to save tax. This scheme was designed to exploit the law not comply with it. Now that it has been uncovered the government can change the law if they wish.
The other point about these arrangements is that Hamilton should only have claimed back the proportion of the VAT on his business travel and as the jet is being used about one-third for private purposes he has probably reclaimed too much. This is either a genuine error or deliberate tax evasion. No doubt we will be hearing more about this in the coming days.
In my opinion this does not equate in any way to genuine tax reliefs that have been deliberately made available by government to encourage taxpayers to spend or save in a particular way, for example, tax relief on pension payments to encourage people to provide for themselves in retirement, ISAs to encourage people to save and gift aid to encourage people to donate to charity.
If Hamilton was using the jet for business purposes then setting up a business to own and run the jet so as to avoid paying VAT is perfectly reasonable (VAT registered businesses do not pay VAT when they buy things).
The dodgy bit is that he was not necessarily 100% forthcoming with la vérité regarding how much time in the jet was to be for personal use.
The fact that there was an over-complex hierarchy of companies was probably for some other dodgy reason. 
ISAs and pensions are the acceptable end of the spectrum but I would argue that there is no difference in essence between making use of one and making use of other arrangements within the tax system to reduce tax burden. There is a difference in degree, but not essence. At the far end of the scale we can easily drift into evasion though - the Mrs Brown’s Boy’s actors arrangement of turning earnings into loans looks like evasion from where I’m sitting. HMRC might get the last laugh there because if they decide that they want the tax then the actors will have to cough up but I bet the 12.5% fee the advisors took won’t be coming back their way. I think that this is pretty much what happened to Jimmy Carr.
I don’t think there are many people who actually like paying taxes, and that is probably due, at least in part, to an aversion to seeing how our tax contributions are actually spent.
When folks take advantage of loopholes in the tax laws, it is sometimes because the law has been badly written, and that is a matter for governments to address. I do feel however that there are times when such ‘loopholes’ are quite deliberate and have been placed there for the purpose of the lawmakers own benefit, or that of their electoral base. At other times it is probably just government ineptitude that has created the loophole.
I think that most of us would have to admit to avoiding tax where we can do so lawfully, but what annoys us is when we see it happening on a grand scale that we ourselves are not able to take advantage of for whatever reason. So perhaps it all comes down to a bit of jealousy really.
2 Likes
In countries where you are looked after from cradle to grave you will be in either a benevolent dictatorship or Cuba.
Which would you prefer?
1 Like
Singapore is basically a benevolent dictatorship, I would prefer Singapore.
It is interesting in that you frame the jealousy in terms of being envious that the rich have more opportunity to diddle the tax man.
I am inclined to agree with this analysis.
1 Like
Not sure it’s jealousy as nearly everyone accepts that there will always be those that have more than most, people do get upset though when the wealthy take the p**s.
I don’t recall talking about being looked after from cradle to grave. Did I?
I suspect that many of the wealthy do not do their returns themselves but employ advisers who say “sign this and you will pay less tax”.
Practically everybody has invested in Pension funds and many of their investments are made overseas. Indeed with the recent fall in the pound those companies with substantial overseas investments did rather better than those just investing in the UK. Investing abroad is what the government wants British companies and investors to do. It’s not a sin. Telling lies to voters is a sin though. £350 million a week was a huge fib we have not seen the last of.
2 Likes