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I watched this programme
To say it was total garbage as far as its analysis of UK tax is concerned is an insult to garbage. It is pretty shocking if Jolyon Maugham really thinks such a nonsense scheme works.
Client perception
I also watched said program as did one of my clients who called me the next day and asked why I hadn't recommended this type of scheme to him. My response was did he miss the bit where Maugham said HMRC would be all over it and it would be at least 3/4 years before it even got to a tribunal and that his fees were £5K to £40K per day. Also the guys doing it were even on the program exercising central management and control in the UK making the whole exercise a complete waste of time.
I did suggest that if he wants to go and live in the Isle of Man, it may be possible (subject to all the anti avoidance rules etc, etc) but the weather is as rubbish as it is here.
Cayman Islands looks a better bet!
cayman
lol if cayman then point him to bbc documentary below
http://www.bbc.co.uk/iplayer/episode/b06wrt2d/britains-trillion-pound-is...
fair tax
Output VAT is required to be declared on the VAT return, relieved by input VAT, if any.
Why can HMRC not combine the two taxes of VAT and Corporation tax on one form with both Output VAT and corporation tax ( at conveniently same rate of 20%) to be shown as liability and relieved by input VAT and relevant expenses (inputs + other items like payroll, finance charges, etc). You pay all your taxes in one go and if there is any final adjustment to make towards the end of the accounting year, then that would be done in the last return or on the subsequent return.
This way, all taxpayers would pay fair tax.
Question will be for those who are outside the scope for VAT.
Well, the answer to that would be - lower the VAT registration to Nil.
See previous thread
There was an extensive thread on why such a scheme is not as simple as you propose.
https://www.accountingweb.co.uk/anyanswers/question/more-vat-please
As for this man's campaign to be HMRC CEO, he appears to have as little grasp of what the job entails as he did of the tax planning depicted in the program.
Let's take the "tell your customers how much tax you paid" idea for a start. A business that makes low profits because its prices are too low to cover its costs properly gets lambasted for it. What about businesses with genuine capital allowance claims? What about spouse's wages where the spouse actually puts significant time into the business? Would the only way to get a five star rating be to actually have tax taken directly on income? If not, just who decides what is and isn't acceptable that doesn't actually breach the law?
Did I miss something ?
The way I saw it, the Crickhowellites would be quite happy to lose any case with HMRC provided the decision applied to the multinationals as well. I'm sure HMRC would argue that it's all a tax dodging exercise and should be disregarded, but then the same should apply to the big boys.
I liked the comment "our waitress pays more tax than Facebook!"
Something missed
I would be inclined to say that the something missed is that the over-simplified setup shown in the program doesn't really mirror the planning of the multinationals. The way I saw it, the Crickhowellites would be quite happy to lose any case with HMRC provided the decision applied to the multinationals as well.
Just to take one example, saying that it is difficult to challenge charges for use of intellectual property is not quite the same as saying that you can charge whatever you like for something you've made up solely for that purpose. Brands like Starbucks and Google do have an undeniable value, and a not insignificant one. Arguing the same applies to the "Fair Tax Town" brand seems a bit of a stretch.
There is a reason people like Jolyon Maugham charge a fortune for defending such schemes.
But
These Google etc. multinationals are not, as far as I am aware, UK tax resident, so that is yet more garbage. The BBC's Cayman programme last week was total garbage too incidentally.
Programme is the way we British spell it....
...if in Rome....Please use the British way of spelling (The GoodEnglish Professor)
ProgramME
Yes. That's right. That was established in the early 1980s. Sadly we have been infestated by too much Americanisation of our English language.