Government ramps up anti-avoidance campaign

The government has announced new proposals to crack down on the promoters of contrived and aggressive tax avoidance schemes.

New measures include strengthening the Disclosure of Tax Avoidance Schemes (DOTAS) rules, extending HMRC’s powers in obtaining disclosure of scheme users from financial advisers, and naming and shaming promoters.

David Gauke, exchequer secretary to the Treasury said today: “Some might say that consultation documents on tax administration are an effective cure for insomnia, but this is one that will keep the promoters of aggressive tax avoidance schemes awake at night.”

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Comments
John Stokdyk's picture

Move over Lord Levinson

John Stokdyk | | Permalink

Tax evasion and aggressive avoidance are taking over as the summer's big debating point. As well as yesterday's launch speech for the consultation document, David Gauke gave an interview to the Telegraph to claim that paying tradespeople in cash to avoid VAT was denying the Exchequer around £2bn a year in lost tax.

Appearing on BBC TV's Newsnight later in the evening, the minister backtracked a little. People would continue to pay builders and the like small amounts in cash, he said, but "the specific point I was making is that when a tradesman says, 'Here's a 10%, 20% discount on your bill when you pay me cash in hand', that is facilitating the hidden economy, that's as big a problem in terms of loss to the Exchequer as tax avoidance, meaning that revenue isn't being paid that should be paid."

Until now the government's moral repugnance against evasion and aggressive avoidance has tended to focus on wealthy individuals and celebrities such as Jimmy Carr. Gauke has certainly set a new thread running with his insistence that, to borrow a phrase, we're all in it together.

Already, AccountingWEB members and bloggers are picking up the political vibrations. Our Accountant in Business blogger wrote yesterday that the momentum against tax avoidance is heading for a tipping point, while this morning Philip Fisher responded to the minister's comments with a post entitled, Is my decorator as morally repugnant as a dodgy accountant? Meanwhile, "thisistibi" kicked off a very energetic debate in Any Answers.

It looks like the profession is going to have its own contest to savour in the weeks ahead; but where do you stand on the tax avoidance/evasion moral spectrum? And leaving the rhetoric aside, are the proposed measures practical and proportionate responses to the government's challenges?

HMRC and Tax Payments    2 thanks

Peter Tucker | | Permalink

It strikes me as strange that we are hearing about HMRC crackdown activities against, Doctors, Dentists, Plumbers etc. when we have the case of Rangers Football Club ( as was ) who it is reported, managed to get into a situation where the failed to pay HMRC a sum estimated to be in the region of £9 million. Now this was a cumulative figure, not merely a single missed payment, and according to press reports, was the trigger for the subsequent administration proceedings.

http://www.dailyrecord.co.uk/football/spl/rangers/2012/02/14/rangers-in-crisis-administration-was-sparked-by-9m-unpaid-vat-and-paye-bill-taxman-reveals-86908-23748868/

I note that HMRC have two Accounting Computers which "receive" and process the PAYE and NICs payments from each and every Employer in the UK. This made me wonder, and perhaps others, why HMRC did not notice that regular payments from Rangers Football Club ( as was ) ceased to arrive. Even those who do not follow football would be aware that major football club players tend to have salaries which would attract some Tax and NICs !!

If one misses a Credit Card payment, due on a particular date, this is noted and acted upon presumably to ensure that a problem does not become a disaster for the Credit Card Company.How strange then when one considers the vast sums of public money HMRC spend on IT that it would appear that HMRC does not undertake a similar process and as a result a bill of £9 million can accrue.

Perhaps HMRC should have an organisation, other than the NAO, reviewing their processes and procedures, rather than relying on self inspection? Levison seems to be indicating that self regulation is not always effective.

mr. mischief's picture

My line in the sand    2 thanks

mr. mischief | | Permalink

Personally I won't get involved in any artificial, convoluted schemes where there is no commercial purpose other than tax avoidance.  In my view we don't need any new laws to get tax back from Carr etc.  Unless he has a second home or other connections in Jersey, I can see no reason for the big cash flow out there followed by the big one back here other than tax avoidance.

I have lost clients over this to accountants who are up for these schemes, fair enough.

Beyond that my job is to use every reasonable commercial means - every possible tax case and / or feature of the Taxes Act which will minimise a client's tax bill legitimately.  So to take a more common example of refurbishment:

1.  If I can see no way to justify this spend as being plant, no tax case to support this, then it's capital.

2.  If it is potentially a grey area - fewer of them following the Integral Features budget, but still there - then it is plant and we're claiming allowances.  And we're documenting the part of the Taxes Act, or the specific tax cases if applicable, which we're going to argue our case on should an enquiry arise.

In a previous role I was put under tremendous pressure during a £100m-plus acquisition to trick up some figures so the acquirer paid too much.  I declined this opportunity and got the lowest annual bonus in my 13 years there by a massive margin.  I knew doing the right thing was going to cost me a few grand but I still did it.  Isn't that just professional integrity?  Surely the public has the right to expect this of every accountant, solicitor, banker, etc?

He's been reading our questionnaire...    1 thanks

Mike Truman | | Permalink

This is one of the scenarios in Taxation's 'How Far Would You Go?' questionnaire. Without giving the game away too much, there is a marked difference so far between people's views on evading tax themselves and on aiding and abetting others to evade tax.

John Stokdyk's picture

Comment from MHA MacIntyre Hudson

John Stokdyk | | Permalink

 

Alastair Kendrick, tax director at MHA MacIntyre Hudson, was interviewed on Newsnight just after Gauke last night.

This morning he circulated a statement voicing scepticism about the proposed changes:

“David Gauke’s proposals will be difficult to enforce in the long run. Bringing in new laws will lead to a game of cat and mouse.

“Loopholes will be found, which will then force the government to refine the law in order to shut the scheme down. This is an extremely time consuming and costly undertaking.”

johnjenkins's picture

Gauke's Gauffs    4 thanks

johnjenkins | | Permalink

Another figure bandied about to try and frighten people. There are many reasons why people pay cash or as Mr Gauke likes to put it "cash in hand". Again let me educate you Mr Gauke, Tax avoidance is legal (in whatever shape or form) tax evasion is illegal. Paying people by cash is legal tender, paying people "cash in hand" (with the meaning that the recipient will not declare it) is not illegal until the recipient doesn't declare it.

So get off the backs off easy targets and get on the backs of those evaders that you can't seem to be able to find. Perhaps HSBC could give you a clue.

Steve-EBL's picture

Serving the public interest    2 thanks

Steve-EBL | | Permalink

Serving the public interest is suppose to be one of characteristics of  a profession , just as Doctors maintain the physical health of the nation, and the legal profession facilitate our liberties, accountants are supposed to protect the financial health of at least the owners of capital if not all, but big 4 accountants seem to have sacrificed the public for greed, as seen in Enron, Parmalat, Worldcom, Recent banking scandals.

johnjenkins's picture

When people    1 thanks

johnjenkins | | Permalink

at the top are seen to be getting away with all sorts of shananigans, the people below think let's do the same. Problem is the boys at the top have all the legal beavers at their disposal. Ordinary folk have to make do with their guile.

Normally though their is a staus quo. Everybody gets away with a bit. When attention is turned to one sector (GB trying to make SME's pay for his incompetance) then all hell lets loose, as we have seen.

I don't think this mess can be cleaned up so somehow we have to get back to the status quo.

Does the government's idea of aggresive tax avoidance...    3 thanks

Trevor Scott | | Permalink

.... and dishonesty include MP's having the public purse pay for their London residence and then selling the property free from CGT?

Tax Networks's picture

In summary    1 thanks

Tax Networks | | Permalink

If it works expect fresh legislation, if its sloppy expect CoP8 Enquiry, if the cost of potential litigation is 39+ years then expect a lot of ethical rhetoric.

"Moral repugnance" from a department that uses stolen HSBC data; engages senior staff (and a high-profile equity card holder) through corporate intermediaries, etc... is uninspiring.

I wonder, just how many inspectors have paid tradesman in cash for work undertaken on their own homes?  

 

johnjenkins's picture

Vince Cable

johnjenkins | | Permalink

was asked if he had ever paid tradesmen cash. His reply was quite fascinating. "Yes, but if I thought for one moment the tradesman wouldn't declare it, I wouldn't pay cash". Out of sight, out of mind.

It would be interesting to know what Mr Gauke would do if every tradesman that did work on his property demanded cash (no not "cash in hand") on the basis of trust.

I am worried that Britain is

Roland St Clere... | | Permalink

 

fast becomming a police state at least for those of us outside the

hallowed halls of the elite. We are watched on CCTV more than any country

in Europe, being forced to comply with more and more law and regulation

and subjected to more and more intrusion into our daily lives, all to the detriment

of civil liberties and democracy. Yet at the same time the elite of our

country continue to have their snouts in the trough and continue to

get away with theft from the rest of us on an unimaginable scale!

What they used to say....    1 thanks

AndyC555 | | Permalink

‘No man in this country is under the least obligation, moral or otherwise, so as to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his store’

 

 (Lord Clyde in Ayrshire Pullman Motor Services & Ritchie v CIR, 1929)

 

Well said, Lord Clyde.

 

DMGbus's picture

New ICAEW guidance + helpsheet link

DMGbus | | Permalink

http://www.ion.icaew.com/TaxFaculty/25014

 The above webpage has a link to yesterday's newly published helpsheet at:

http://www.ion.icaew.com/ClientFiles/c1db2be4-7bd5-41f3-996a-764f237080bb/Helpsheet%20-%20Tax%20avoidance%20guidance%20-%2024%2007%2012.pdf

see also the established HMRC views on avoidance which I guess some avaricious advisors / promotors of immoral schemes still ignore:

http://www.hmrc.gov.uk/avoidance/spotlights.htm

 

 

 

Judging by your list of targeted schemes...    1 thanks

ladylaff | | Permalink

...it looks like the government had a brainstorming session with Lord Ashcroft!

Steve-EBL's picture

Cadburys    1 thanks

Steve-EBL | | Permalink

Bring back the quakers.......

jon_griffey's picture

GAAR    1 thanks

jon_griffey | | Permalink

I found the attitude of the MacIntyre Hudson guy very depressing and reflects badly on our profession.  Essentially the message was there is nothing ultimately that can be done about tax avoidance so we should all be resigned to it.  Taxes are for little people.

The GAAR will be an excellent start.  However I have long wondered why it is beyond the wit of Parliament to set up a kind of duck test.  Even a layman can easily spot a contrived tax avoidance scheme - we shouldn't need to legislate ad infinitum.

jon_griffey's picture

Name and shame    2 thanks

jon_griffey | | Permalink

A very easy way to deal with aggressive tax avoidance is thus.  Any DOTAS notifiable scheme should be published on the HMRC website with details of how it works, who the firms behind it are and who the taxpayers are and the sums involved.  The media would have a field day.  The rich, celebrities etc would then steer well clear.

DMGbus's picture

Promotors / professional bodies need naming    2 thanks

DMGbus | | Permalink

jon_griffey wrote:

A very easy way to deal with aggressive tax avoidance is thus.  Any DOTAS notifiable scheme should be published on the HMRC website with details of how it works, who the firms behind it are and who the taxpayers are and the sums involved.  The media would have a field day.  The rich, celebrities etc would then steer well clear.

Add to the above excellent solution:

Yes, name the advisors but also any professional bodies that they belong to - an evil market has two frontlines to be attacked - the promotors and the users, in the context of promotors I mean members of professional bodies out of control, using their qualifications to make the schemes look official / good and bringing their professional bodies into disrepute.    Professional bodies might then no longer take a "back seat" on these matters (oops might upset some of the biggest member firms!).

 

 

Why not

AndyC555 | | Permalink

jon_griffey wrote:

A very easy way to deal with aggressive tax avoidance is thus.  Any DOTAS notifiable scheme should be published on the HMRC website with details of how it works, who the firms behind it are and who the taxpayers are and the sums involved.  The media would have a field day.  The rich, celebrities etc would then steer well clear.

Why not

 

Publish your tax return?

 

And your bank account(s)?

 

And your internet browsing history?

 

In fact open up all aspects of your personal and business life?

 

After all, if you've nothing to hide, what are you complaining about?

 

 

After all....

AndyC555 | | Permalink

A public that attacked the house of a paediatrician  because it confused that profession with being a paedophile can be trusted to understand the complexities of tax law and pass judgement on what is or isn't acceptable.

 

johnjenkins's picture

Understanding the complexities

johnjenkins | | Permalink

of tax law and being able to pass judgement on what is and what is not acceptable are two different things.

Perhaps if we substituted the word "Nonce" for paedophile there wouldn't be any confusion in the future.

"Understanding the    1 thanks

AndyC555 | | Permalink

"Understanding the complexities of tax law and being able to pass judgement on what is and what is not acceptable are two different things." 

 

Indeed they are.  The first allows a reasoned response based on an undertsanding of what has taken place, the second is a reactionary knee-jerk based on a few sound-bites by ill-informed politicians with an agenda.

 

ShirleyM's picture

Can someone clarify for me, please    1 thanks

ShirleyM | | Permalink

What happens in real life with these aggressive avoidance schemes. I must admit to not knowing the answer :(

I'm guessing some of the following:

  • Someone thinks of a scheme that saves tax and thinks it is within the law, and research indicates it will work, but it is by use of  loophole, and not using the law 'as intended'
  • They inform DOTAS
  • People, or corporations, start using the scheme and start to save tons of tax
  • HMRC eventually look at the scheme - how long would this take?
  • The scheme is approved, or not, as the case may be
  • If the scheme is not approved, what happens then? Does the saved tax have to be repaid or not?
  • If there is a court case who pays the fees?
  • Are the scheme promoters held to account, by either HMRC, or their 'clients'?

I suppose I would like to know if a 'failed' scheme can produce massive tax savings before it is closed down, and how much it costs the country to get them closed down.

ShirleyM

AndyC555 | | Permalink

It's pretty much as you outlined.

But who is to say what the law 'intended'? The law is the words that are used in the legislation.  If there is doubt about what they mean, that's for the courts to interpret. Sometimes the meaning is clear but whether (for example) something is a 'loss' is what's being disputed.

HMRC dont 'approve' the schemes as such, but look to see whether they are within HMRCs interpretation of the law.

But I don't think it would be right to rely on HMRCs interpretation.  Look elsewhere on this site for the number of cases where HMRC do not think a taxpayer has a 'reasonable excuse' for missing a deadline

Often, such tax avoidance schemes come with a fee paid by the user that goes into a 'fighting fund' to pay costs of defending it.  HMRC will usually take a test case to the courts not all the cases.

If a scheme has been properly notified, HMRC (usually) open enquiries into all tax returns involved so if a scheme is judged not to work by the courts, no tax ought to be avoided.

These thngs can take years to crawl their way through successive layers of court.  The recently decided 'Schofield' case involved a CGT gain from 2002!

 

 

 

@AndyC555: EITHER 'HMRC legal avoidance' OR 'Allegedly legal ...

dstickl | | Permalink

AndyC555 wrote:

...   But who is to say what the law 'intended'? ...

Hi AndyC55!    dstickl's short answer [to your question] is that:

(1) It is for the implementer of the law [HMRC in the case of alleged tax avoidance] "to say what the law 'intended'  ",   e.g. to the law courts and media etc, and

(2) Journalists - and other commentators - could help the debate for HMRC's tax paying "customers", if they were to assert that a distinction should be made between: 

(A) 'HMRC legal tax avoidance', e.g. ISA schemes already passed by HMRC, and 

(B) 'Allegedly legal tax avoidance', i.e. an asserted scheme yet to be tried in court.

Paying cash to avoid taxes

IANTO | | Permalink

My question really goes to the heart of the fundamental economics of using money rather than a bartering system.

If I earn £100 from working for an organised body, e.g. a Ltd company, then I will pay £20 in tax, leaving me with £80. Now if I employ a plumber to fix my leaking tap and he charges me £50, he is required to pay £10 in tax. But if I pay him in cash from my £80, then the tax has already been paid on the £50 I give the plumber.

So what right does HMG have to say that it is wrong and evading tax for me to pay the plumber in cash from money that I have already paid tax on. If on the other hand the plumber also does work for a Ltd Co., then yes, the tax should be paid on what he earns. 

I have heard it said that all but 15% of all money earned eventually is returned to the Exchequer, which is why this figure seems to have been a guiding principle in many financial regulations in the past.

@IANTO: Taxation is the price we have to pay for civilisation &

dstickl | | Permalink

IANTO wrote:

My question ...  what right does HMG have to say that it is wrong and evading tax for me to pay the plumber in cash from money that I have already paid tax on. 

Hi IANTO!    dstickl's short answer [to your question set out above] is that:  

Taxation is the price we have to pay for civilisation and governments have to govern.

Taxation

IANTO | | Permalink

Yes, but that doesn't explain the economics of taxation of monies which have already been taxed. I accept it's a complex economics issue, but I've never seen a satisfactory answer.

johnjenkins's picture

@Ianto

johnjenkins | | Permalink

It is an Income Tax therefore all income is taxed from whatever source. The plumber should declare the income, offset any expenses, then pay tax and nic on the profit.

Our tax system is set up that, unless you adopt tax avoidance schemes, most earnings will end up in the Exchequer's coffers, rather like reducing basis on depreciation of an asset.

As HMRC don't believe they are getting it quick enough and want a better turnround we get all this crap about avoidance. However the only thing that this sort of aggresive taxation achieves is a large rise in the "black market", "hidden economy" etc. etc.

The moral maze    1 thanks

ladylaff | | Permalink

I have a pretty simple view of things.  If something is legal, it's legal, no matter how morally repugnant.  So if the government wants to effect real change, it will close the loopholes that allow certain tax avoidance schemes to be legal.  Otherwise they are sending a mixed message: we'd sure like people not to use these schemes but we're afraid if we shut them down rich people won't want to live here anymore.  Until these loopholes are closed, it is difficult to make a convincing argument to Joe the Plumber whose additional income is at least likely to go back into the consumer economy, that he is not entitled to offer a discount to customers for cash payments.  

@ladylaff:'Allegedly legal tax avoidance' asserted yet 2 B tried    2 thanks

dstickl | | Permalink

ladylaff wrote:

...  If something is legal, it's legal, no matter how morally repugnant.  ... 

Hi ladylaff!   The problem with your stance above - IMHO - is that the promoters of some alleged tax avoidance schemes seem to me to assert that same "is legal" on the basis of an opinion of a mischievous (distinguished) lawyer, rather than on the basis of a ruling by the english court(s).    Hence my moderate proposal earlier [Thu, 26/07/2012 - 03:20] that any such scheme that has not been passed by HMRC has - by english law, with due penalties for any transgression - to be labeled as being:

(B) 'Allegedly legal tax avoidance', i.e. an asserted scheme yet to be tried in court.  

johnjenkins's picture

@ladylaff

johnjenkins | | Permalink

There are so many forms of tax avoidance. One is very simple. Take a publican that doesn't want to pay ers nic but he needs staff. The easy way is to have more staff and make sure their hours and pay don't go over the threshold. That is reality. However mythical schemes that don't actually do anything can surely be stopped. If someone can work out these schemes then surely someone can put paid to them.

"Hence my moderate proposal

AndyC555 | | Permalink

"Hence my moderate proposal earlier [Thu, 26/07/2012 - 03:20] that any such scheme that has not been passed by HMRC has - by english law, with due penalties for any transgression - to be labeled as being:

(B) 'Allegedly legal tax avoidance', i.e. an asserted scheme yet to be tried in court."  

 

Can't see what difference that would make. every DOTAS notifiable scheme comes with a warning that HMRC might challenge the providers view of the law, which amounts to the same thing.  I take it from your comments that you're a firm believer in abiding by court rulings.  Here's a comment from an English court:

 

"No man in this country is under the least obligation, moral or otherwise, so as to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his store"

 (Lord Clyde in Ayrshire Pullman Motor Services & Ritchie v CIR, 1929.

 

And something very similar from the US

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes.
Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."  

Judge Learned Hand in Gregory v. Helvering 69 F.2d 809, 810 (2d Cir. 1934 )

@AndyC555:Answer RE:"Can't see what difference that would make."

dstickl | | Permalink

AndyC555 wrote:

"Hence my moderate proposal earlier [Thu, 26/07/2012 - 03:20] that any such scheme that has not been passed by HMRC has - by english law, with due penalties for any transgression - to be labeled as being:

(B) 'Allegedly legal tax avoidance', i.e. an asserted scheme yet to be tried in court."

Can't see what difference that would make. ... Here's a comment from an English court: ...    (Lord Clyde in Ayrshire Pullman Motor Services & Ritchie v CIR, 1929.]

And something very similar from the US:    ...  [ Judge Learned Hand in Gregory v. Helvering 69 F.2d 809, 810 (2d Cir. 1934)]

Hi AndyC555!     Thank you for 2 judges' quotes from the era of the 1920s and 1930s Depression.   Very well: Are you suggesting that they're fully relevant or appropriate to the circumstances of the first Depression of the 3rd Millenium, and consequently that english law should remain unchanged in the near future?

Moving on to your remark of "Can't see what difference that would make" - regarding the proposed labelling of tax-free schemes not yet passed by HMRC as "(B) 'Allegedly legal tax avoidance', i.e. an asserted scheme yet to be tried in court." - may I suggest that, in this era of a "nudge" governing style, such a label - especially if publicised in the organs of the "Street of Shame" of Private Eye - might "lead out of temptation" people (like that comedian, etc) whose businesses depend on the goodwill of "ordinary people".  

This removal of temptation - and concomitant reduction of legal etc monetary fees - may be seen to "make" a "difference" if, perish the thought, a transgression of (B) might, in extreme situations, be perceived to result in a possibility of a male prisoner transgressor having to share a prison cell at night with a convicted bisexual rapist.

Tax Networks's picture

Tax planning gone "bad"

Tax Networks | | Permalink

After reading above I have a published a news item which hopefully illustrates HMRC's approach.

See http://www.taxnetworks.co.uk/news/home.cfm

End of conversation

AndyC555 | | Permalink

dsticki

So now you're suggesting we rely on innuendo, Private Eye and the threat of male rape to govern tax avoidance? Why not just pass a law that no-one can do any tax planning if YOU don't like it?

It's quite obvious you only believe in the English courts and the rule of law if you like the outcome.  You  dismiss well thought out expressions on morality and law because they come from the last century yet later use an expresion "lead out of temptation" which comes from a morality much older than that, another example of you dismissing anything you don't like out of hand but embracing anything you agree with as (the phrase is appropraite) gospel.

There's no point continuing this conversation.  You stick to your knee-jerk, populist tub-thumping and I'll stick to the law.

Incidentally, "putting" words "into" quotation "marks" at "random" as "you" write doesn't "give" your "points" any "more" weight.

  

 

Tax Networks's picture

Missing the point AndyC555?

Tax Networks | | Permalink

Morality of tax planning is a judgement call. For some, they have done nothing legally wrong. Tax avoidance is being challenged at every turn and some are exposed to implementation issues. Some experience HMRC procedural shortfalls.

Yes Andy, nothing is perfect. 

Steve-EBL's picture

Tax Networks

Steve-EBL | | Permalink

"whereby the tax sheme vendor has popped off"

Should this be "scheme"?

Just so your web page is bullet proof.

Steve

8 moderate answers to the post of AndyC555, 30/07/2012 - 07:55am

dstickl | | Permalink

AndyC555 wrote:

So now you're suggesting we rely on innuendo, Private Eye and the threat of male rape to govern tax avoidance?    ...   

A1:  No, sorry, AndyC555.   To help you, I'm having to also use the oblique words of innuendo in order to bring out a further dimension to this topic, because of your prior written assertion that you "Can't see what difference" my moderate proposal would make to the anti-societal activity of Allegedly Legal Tax Avoidance (ALTA).    I'm concerned too that - if you really believe that my ALTA marking proposal would make no difference - you apparently contradict your belief by your apparent opposition!

AndyC555 wrote:

...    Why not just pass a law that no-one can do any tax planning if YOU don't like it?   ...   

A2:  No again, sorry, AndyC555.   In view of my mortality, that could lead to continued long term unwelcome uncertainty in english law on TA, and the concomitant lack - or high cost to the honest taxpayer - of implementation re provably illegal "TA", as now. 

AndyC555 wrote:

...   It's quite obvious you only believe in the English courts and the rule of law if you like the outcome.    ...

A3:  No, sorry, AndyC555.   It's because I believe - amongst other things - "in the English courts and the rule of law" that I'm suggesting an improvement in english law and its implementation, to help others - and perhaps your self too - share same.

AndyC555 wrote:

...   You  dismiss well thought out expressions on morality and law because they come from the last century yet later use an expresion "lead out of temptation" which comes from a morality much older than that, another example of you dismissing anything you don't like out of hand but embracing anything you agree with as (the phrase is appropraite) gospel.   ...

A4:  What I'm doing, AndyC555, is advocating a moderate change in english law - contrary to your taste - so as to minimise the mis-selling of so-called "entirely legal" tax avoidance schemes of the sort tweeted by J Carr [see a post of Tax Network]. 

AndyC555 wrote:

...   There's no point continuing this conversation.    ...

A5:  Oh yes there is, IMHO AndyC555, because it helps me reformulate my valuable ALTA response to the latest HMRC/HMG TA - and "TA" - consultation document.

AndyC555 wrote:

...  You stick to your knee-jerk, populist tub-thumping    ...

A6:  Thank you, AndyC555, it's part of the english democratic process.

AndyC555 wrote:

...    and I'll stick to the law.   ... 

A7:  Thank you again, AndyC555, because a TA change in english law for mandatory ALTA marking might perhaps be "sticky" for you, in view of the foregoing. 

AndyC555 wrote:

....   Incidentally, "putting" words "into" quotation "marks" at "random" as "you" write doesn't "give" your "points" any "more" weight.

A8:  But such might add clarity for others, AndyC555, about ALTA.    Phew!

Lets get back to David Gauke    2 thanks

Roland St Clere... | | Permalink

I don't know about other posters to this forum but to me Mr Gauke's references

to the morality of paying cash in hand stink to high heaven of Tory hypocracy.

Tory morality stops at the doors of banks and their other friends in the semi privatised monopolies such as Network Rail..

The Tories cut the top rate of tax from 50% to 40% thereby giving an enormous cash bung to their friends and then lecture the rest of us on morality.

They have no shame!!

@Roland St Clare: Hypocrisy OR Inconsistency of thinking?

dstickl | | Permalink

Hi Roland St Clare!   Yes, IMHO you're correct to point out the Gauke/Tory "do as I say" apparent bias against cash payments, presumably to force english people to transact via banks to pump up bankers' (the "w" has to be silent, of course, in polite professional accountancy circles) oligopolistic profits, and their notorious so-called banksters bonuses.   I also agree with your side swipe at Network Rail etc - which a previous MP (now deceased I believe) described as a Portillo-like "Poll Tax on wheels" - oh how we enjoy the Bradshaw's televised tours ... 

However, contrary to your assertion, I understood that the Tories are to "cut the top rate of tax from 50% to" 45% next year: has there been a recent change here too?

The reason that I refer to a Gauke-ward "Inconsistency of thinking" is that IMHO there seem to me to be so many double standards emerging from his mouth, on so many things, not least on employer NICs for people aged > SPA and then perhaps being a potential IR35 target, if they dare to work to stave off dementia, and its concomitant costs for the taxpayer!

johnjenkins's picture

Interesting

johnjenkins | | Permalink

that the french have announced a transaction tax. How will that work with "cash in hand" or don't the french have a cash culture. Perhaps that's what Gauke is intending to do.

jon_griffey's picture

tax cuts and avoidance

jon_griffey | | Permalink

 

I don't have a problem with the Govt cutting the top rate of tax to 50% to 45% and I look forward to them cutting it to 40%.  50% is ridiculous. As is the 62% tax rate that someone earning just over 100K pays.  Personally I see it as reversing a punitive tax increase rather than a tax cut.  As a quid pro quo I would crack down much harder on tax avoidance.  I have real difficulty telling clients that they have a 50%+ tax bill whilst the firm down the road promises they can pay almost no tax at all - and will collect a large fee for doing so.  Is it any wonder that everyone is at it?  As I suggested above if persons involved in DOTAS notifiable schemes had their details published on the HMRC website at the time then that would be a major disincentive.  I see no major issue with the rights of taxpayers to have their details kept confidential.  If you don't want the bad press - don't do it.  After all the recent Schofield case demonstrates that you run the risk of washing your dirty laundry at aTribunal anyway.

@jon_griffey:Real difficulty "that they have a 50%+ tax bill"...

dstickl | | Permalink

jon_griffey wrote:

...     I have real difficulty telling clients that they have a 50%+ tax bill whilst the firm down the road promises they can pay almost no tax at all - and will collect a large fee for doing so.     ...  

Hi jon_griffey!    I too have a real difficulty telling people "that they have a 50%+ tax bill", because that would be a part-truth!    The fuller truth is that their tax bill is made up of a number of marginal income tax rates, at various increasing levels of income, and the highest marginal tax rate for some people is the so-called headline "top rate of tax of 50%", at present, which would of course make their average income tax total/overall bill rate lower than that "optical" figure of 50%.     I always emphasise that the 50% figure is a tax on their "income froth" above the lower marginal tax rates that some ordinary people pay at lower levels of income, and which the higher paid bankers etc enjoy too, of course, as part of their total/overall tax bill.    

SUM-UP:    The client's average total tax bill rate is lower than that client's top marginal tax rate.  

(GCE 'O' level Additional Mathematics note: the above situation occurs because each of the separate marginal income tax rates are on a monotonically increasing scale). 

ShirleyM's picture

The difference between 20% and 45% tax is not strictly 25%    1 thanks

ShirleyM | | Permalink

The 20% tax payers pay 12% National Insurance (total 32%), the 40% and 45% tax payers pay 2% NI on those additional earnings (total 42% or 47%), so the overall increase is 10% or 15%.

So it isn't as bad as people like to make out!

jon_griffey's picture

@dstickl - O level maths indeed

jon_griffey | | Permalink

 

Hi dstickl.  You are quite correct with your arithmetic.  However the reality is that I had to tell a client the other day that they had a 412K tax bill on an income of 867K - an average rate of nearly 48%.  I don't think it would give them any comfort or indeed take it kindly being told that actually, its not 50%, but an average of a mere 48% and me giving chapter and verse on marginal rates. 

@ jon_griffey! I'd be glad to have GBP 455,000 after all taxes.

dstickl | | Permalink

jon_griffey wrote:

...  I had to tell a client the other day that they had a 412K tax bill on an income of 867K - an average rate of nearly 48%.  ....

Hi jon_griffey!    This isn't envy, but I'd be glad to have GBP 455,000 after all taxes.