HMRC seeks tougher sanctions for high risk tax schemes

An HMRC consultation around measures to rein in “high risk” promoters of tax avoidance scheme would a;sp require users of tax avoidance schemes “to amend their tax returns accordingly” if the arragements are defeated in court.

Under the new proposal, taxpayers who do not satisfy HMRC that they had a reasonable basis for not amending their returns could face a tax-geared penalty.

The paper targeting promoters has been on the cards since the March Budget, when chancellor George Osborne promised consultation around a package of information powers and penalties and to curb high-risk promoters of tax avoidance schemes.

While few would dispute the need to curb abusive schemes, the proposed sanctions set out in HMRC’s Raising the stakes on tax avoidance consultation document contain a few potential controversies - including a higher threshold for reasonable excuse and reasonable care for both advisers and taxpayers in such high risk cases.

The consultation period lasts until early October with the government planning to bring forward legislation for the Finance Bill 2014 - possibly in the shape of draft clauses by early December.

The main points cover:

  • High risk promoters
  • Failed tax scheme penalties
  • Tougher criteria for reasonable excuse and reasonable care
  • "Locking the door after the horse has bolted"

Continued...

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Comments

Why not.....

AndyC555 | | Permalink

Here's a thought.

Instead of new legislation, new powers, new initiatives and new resorces being thrown at these sort of tax avoidance schemes, how about lowering tax rates?

That would discourage people from wanting to use artificial tax avoidance schemes far more effictively than what is being planned.

 

 

I don't know why people want tax avoidance schemes    4 thanks

Donald6000 | | Permalink

I really don't know why people want tax avoidance schemes anyway. Why don't they just pay what they owe, like the rest of is have to do?

That's part of the problem with this society everyone needs to be made to feel special. Yet not a one of these tax avoiders has done anything of which they could be proud. There are nurses within the NHS who have saved many lives and they don't avoid tax.

Has no-one any ethics anymore? Pretty sick of this scummy behaviour.

 

Why not indeed?    2 thanks

smallbeancounter | | Permalink

@AndyC555 -

Exactly. IHT is a case in point. When the Cons said they would raise the threshold to £1m I thought, well that's good, one less thing to worry about. If they had reduced the rate of IHT to 20% I would have taken the same view. But of course they were telling lies to get elected, like they always do, and I am now planning how to prevent them stealing a huge slice of what we have built up during a hard working life. Now that all the old avoidance loopholes have been plugged (and I have just paid a good lawyer £900 to tell me that they truly have all been plugged) the best method of reducing the IHT liability appears to be to quietly sell the assets and spend the proceeds. It's a funny thing but it's quite liberating to be given the go-ahead to indulge in all those things we did without whilst saving and being prudent and all those other old-fashioned things that are now only suitable for mugs and suckers. And when I talk to wealthy friends I find a lot of them are doing exactly the same thing. Where is the capital is going to come from for future investment? I have no idea. It can't come from savings - they won't be there. I suppose the Bank of England will just print it out of thin air.

If the government would keep tax rates low, and live within its means, we would all be a lot better off. Chance of them taking that approach? Nil.

AndyC555 is right    2 thanks

lapwater11 | | Permalink

Andy - I quite agree.

Politicians these days seem to have completely forgotten the Laffer curve - unlike Margaret Thatcher and Geoffrey Howe who appreciated the Laffer curve very well.

What also bugs me is the amount of time, money and energy spent chasing down tax avoidance while tax evasion (the real offence) barely seems to get a mention. Benefit fraud (a criminal offence) also barely seems to get a mention. I'd love to see a comparison of how much our government spends chasing benefit fraud as compared with tax avoidance.

How can it be right that people who simply trouser the money are less under the spotlight than people who make proper disclosure? It's like arresting the racing drivers at Brands Hatch for breaking the speed limit but ignoring reckless drivers on the public highway.

It's bonkers.

But what is really crazy is that in my email inbox this morning, the email above AccountingWeb's email about this article was an email from Taxwise about the Mehjoo v Harben Barker case! So on the one hand HMRC and the government want to shame advisors into not offering avoidance schemes and on the other hand the courts want to punish advisors for NOT offering them. We can't win.

Andy has the answer. Lower taxes.

No entrpreneur would bother with an avoidance scheme if corporation tax was only 10%. I don't think a reduction to 10% would not cause a huge loss to the exchequor because the tax take from corporation is not that high anyway (most of the tax take comes from income tax, NI and VAT). But a low corporation tax rate of 10% would almost certainly attract companies to the UK from abroad - and they would employ people - which would mean an increase in income tax, NI and (by virtue of increased spending) VAT. A tax rate of 10% would probably attract Google, Amazon, and others away from Ireland to the UK - so the government could stop moralising over those companies as well.

I am sure somebody will log on and tell me my view is "morally repugnant". I am sorry, I don't agree. It's just economic good sense.

This silly moral crusade against avoidance has dragged on and on - but what really needs to happen is for our politicians to wake up and have sensible policies on tax.

I am now thirsty and off to Starbucks for a coffee.

 

Not morally repugnant - just legal

Donald6000 | | Permalink

lapwater11 wrote:

Andy - I quite agree.

Politicians these days seem to have completely forgotten the Laffer curve - unlike Margaret Thatcher and Geoffrey Howe who appreciated the Laffer curve very well.

What also bugs me is the amount of time, money and energy spent chasing down tax avoidance while tax evasion (the real offence) barely seems to get a mention. Benefit fraud (a criminal offence) also barely seems to get a mention. I'd love to see a comparison of how much our government spends chasing benefit fraud as compared with tax avoidance.

How can it be right that people who simply trouser the money are less under the spotlight than people who make proper disclosure? It's like arresting the racing drivers at Brands Hatch for breaking the speed limit but ignoring reckless drivers on the public highway.

It's bonkers.

But what is really crazy is that in my email inbox this morning, the email above AccountingWeb's email about this article was an email from Taxwise about the Mehjoo v Harben Barker case! So on the one hand HMRC and the government want to shame advisors into not offering avoidance schemes and on the other hand the courts want to punish advisors for NOT offering them. We can't win.

Andy has the answer. Lower taxes.

No entrpreneur would bother with an avoidance scheme if corporation tax was only 10%. I don't think a reduction to 10% would not cause a huge loss to the exchequor because the tax take from corporation is not that high anyway (most of the tax take comes from income tax, NI and VAT). But a low corporation tax rate of 10% would almost certainly attract companies to the UK from abroad - and they would employ people - which would mean an increase in income tax, NI and (by virtue of increased spending) VAT. A tax rate of 10% would probably attract Google, Amazon, and others away from Ireland to the UK - so the government could stop moralising over those companies as well.

I am sure somebody will log on and tell me my view is "morally repugnant". I am sorry, I don't agree. It's just economic good sense.

This silly moral crusade against avoidance has dragged on and on - but what really needs to happen is for our politicians to wake up and have sensible policies on tax.

I am now thirsty and off to Starbucks for a coffee.

 

 

Your viewpoint is not morally repugnant and would stop the abuses of which I complain. If the rate of CT were dropped legally to 10% it would indeed stop all the abuses and everyone (including those with some moral standards) would be happy.

 

Please enjoy your coffee. Regards.

Evasion - Avoidance - Planning

jamesashburton | | Permalink

The whole issue of tax evasion, tax avoidance, tax planning is really just a PR campaign driven by politicians of all parties and media idiots. On the few occasions I watch the proceedings of the Commons Public Accounts Committee I never cease to be amazed at the lack of knowledge displayed, to a greater or lesser extent, by the committee members.

For example, Ian Swales (LibDem, Redcar) had so much trouble understanding the concept of the VAT Reverse Charge he had to ask the E&Y partner to provide him with a written explanation.

As for Chairman Margaret Hodge (Labour, Barking) Lady Hodge (to give her her full title) nee Oppenheimer, seems to think that companies pay tax on turnover. She acts like a Rottweiler towards business executives in front of her and refuses to answer questions of her family trusts and ownership of the family firm Stemcor - the world's largest privately owned steel-trading corporation and the sixth largest British company in private hands - with the same ferocity.

In a May 2013 interview with Sky News Hodge stated that her family company paid 'every penny' of the tax it owed although later she admitted that she did not know how much tax it actually paid. Even a compliant media are commenting on her lack of knowledge on how the taxation system operates; both the existing statute and the process involved for amending it.

She and her committee don’t seem to understand that Corporation Tax doesn’t actually raise much income when you consider that when a dividend is paid the recipient gets relief on their own tax bill for the CT that has been paid.

Last year the 2020 Tax Commission (led by the Institute of Directors and the Taxpayers’ Alliance) published a detailed report on reforming the UK tax system. Part of that report called for the abolition of Corporation Tax. It is a report of over 400 pages covering a whole range of taxes. Printed versions cost £50 but you can download a free PDF edition from the IoD website (link below). I’ve also included a link to an article of mine on Avoidance, Evasion and Planning.

http://www.iod.com/MainWebSite/Resources/Document/tax_commission_report_2012.pdf

http://carraghyn.com/carraghyns-blog/68-tax-evasion-tax-avoidance-or-tax-planning

 

 

Not forgetting

jamesashburton | | Permalink

I should also have pointed out that if you examine Stemcor’s last published accounts and work out the tax paid against turnover – as Margaret Hodge did for Google – you will find that Stemcor paid less than one-tenth of one percent in tax. Far less than Google. Applying the correct calculation (against profit) on a global profit of £65 million Stemcor owed £734k to HMRC.  Does she give the Chairman of Stemcor (her brother, Ralph) a hard time over dinner about this?

jamesashburton - you are right too!    1 thanks

lapwater11 | | Permalink

James,

I am so glad you made the point about Margaret Hodge. I can't bare to watch her on the television anymore. Everything you say is right on the mark. And there are so many other politicians (some very senior) with similar trust arrangements - from all parties. And yet politicians seem blind to the glaring hypocrisy. It makes my blood boil.

Our nation has completely lost faith in politicians and this whole debate about tax shows just why. They are tackling the wrong issues (becuase they think it wins votes) rather than creating a sensible tax policy designed to let our entrepreneurs off the leash and create wealth. Our country needs wealth creators now more than ever since the war.

I did a quick calculation. If an entrepreneur's company makes £300k in a year, by the time they have paid themselves a small salary, paid the CT, and drawn the rest as a dividend he or she will have paid in the region of £150k in tax.

On what planet is that a tax policy to encourage entrepreneurs to take risks to build businesses and create wealth?

No wonder they resort to avoidance schemes.

But it's not just the politicians.

The media are at fault as well.

The newspapers bang on about tax avoidance but fail to make big news of the really important underlying issues - like the fact that our tax policy is desgned to penalise and not to motivate. If instead they made big news of the real issues it would force the politicians to deal with those issues.

My Starbucks is very tasty. A skinny latte with two shots of espresso.

 

So many good points as usual

pauljohnston | | Permalink

RE Corp Tax at 10%

Please read this post Mr Osbourne and just do it - dont think about it and dont let all those "policy advisers" have his or her say

Morally Repugnant Avoidance/Evasion/Lower taxes and "unfairness"

TMR | | Permalink

Undoubtedly there is a great case for lower corporate taxation, but let's be honest it won't happen. It's politically not going to be acceptable because the Government are inept at presenting the case to all those on benefits and lower incomes who's votes they crave, not to mention they are spineless to 'do the right thing'.

As to the worst excesses of some of these very aggressive schemes, particularly involving footballers, tv stars and very high corporate earners, earning huge sums without paying any 'reasonable' tax because some fancy scheme utilises loopholes which frankly weren't intended is indeed morally repugnant, surely they must be classified alongside "evasion" which none of us support.

The problem is that we also know there are taxes which are indeed unfair, IHT being one such tax which most of us find totally abhorrent. The government do support savings schemes that provide for our retirement, which of course is morally correct, save they push us in to schemes that are all too often designed to provide income more for the pension scheme promoter who all too frequently over estimate the pension than to us the taxpayer.

Having worked for 30 years, built a good business and paid all my taxes, I wanted to leave the company to my kids when I popped my clogs, but didn't want a huge slice taken by the Government, they'd had enough over the years!

I was persuaded to contribute surplus funds in to an offshore ebt which has IHT benefits as well genuine trustees to invest, reward and distribute both capital, income and gains earned from investments, even post my demise. 

Following collapse of the banking sector and lost will to invest, I found myself on the wrong end of a Spanish Property Development project which needed funding. I turned to my only hope the ebt to secure funds to complete the project and loans were arranged on commercial terms, this is work in progress but at some stage when the property market returns hopefully will provide a good return for my eventual retirement. 

Now being a moral individual we didn't attempt some fancy tax dodge by claiming the contribution as a tax loss in the company, merely contributing from retained reserves. What do I now find?  An HMRC inspector claiming it's disguised income and issuing huge tax and NIC demands which will likely now bankrupt the company and result in cancellation of my intending retirement. Of course we're arguing but HMRC can be very aggressive and stress undoubtedly takes it's toll, probably pushing me nearer to my maker than I had previously intended. I certainly don't want to leave my kids with having to sort this out!  

Who's to blame?

Well certainly not the Government at the time who's original intention was good, and certainly not the promoter of the scheme or the advisors who's intention was also to provide me with good proper, moral tax avoidance advice, but the main ones to blame must be the immoral promoters and advisors of schemes that frankly take the Michael as well today's Government who sweep us all up in the same net and indeed make us all (even the moral ones) feel guilty for doing something that we'd all long accepted was our right.

The saying it's every tax payer's right to manage his affairs to pay the least amount of tax has unfortunately been abused and is no longer taken in the same good standing - hell and damnation to us all!

Take heart though there's still room for good tax planning advice and there will always be good advisors because unfortunately our dear Government will always find a way to be unfair and they have HMRC officials to do their dirty work, intent on abusing their positions such their interpretations are often now designed to make us pay the 'most' amount of tax not as they like to put it the 'correct' amount of tax.

If taxes were fair and we had fair officials to deal with we wouldn't need advisors!     

           

 

 

I am afraid I just don't buy

lapwater11 | | Permalink

I am afraid I just don't buy (and never did buy) this "moral" argument about tax avoidance.

Tax is not a question of morals - it is a question of law.

If tax were a moral issue people would pay it voluntarily.

They don't.

As a result, there are laws.

This "moral" argument is simply politicians scoring votes without really even attempting to solve the underlying problems. It was started by Gordon Brown and regretably perpetuated by the Coalition. And the press and the people of Britain have blindly bought into it.

We may not like it that entrepreneurs avoid tax in the way they do - but why do we persist in blaming the entrepreneurs and the tax advisors and branding them immoral?

It is the government (for the last 15 years) that has failed, not the entrepreneurs and the tax advisors.

And the more we sign up to this moral argument, the more we give the government a free pass to ignore the root causes.

We play into the politicians hands when we sign up to this moral argument.

The British people (and the media) need to start holding their government accountable instead of buying into their spin. We are not here to swallow what our government does and says but to challenge and quesiton it.

I hope Mr Osborne does read this thread and I hope he will be the man who takes action to try to make Britain a place that is once again fit for adventurers and entrepreneurs - because at the moment we penalise the industrious and encourage dependancy - and that is why tax avoidance has become so heavily used.

Lapwater11: Moral taxes

TMR | | Permalink

It isn't just the question of the tax we legally have to pay that is the moral question it's what we spend it on. Years ago, education, defence, police, health, transport were costs we we're rightly proud to contribute to, albeit we didn't have most of our wealth snaffled by VAT/NIC/Income and Corporate Taxes, Gains Taxes and Inheritance taxes, not to mention imposed duties to the level we are today, which is crippling but it's the thought of paying local councillors two hundred grand a year and all the other useless cronies now in the system, the giving of our money away to Bongo Bongo despots and the EU, watching Blair earn millions from his 'contacts', watching Mandleson entertained on million pound yachts by dubious characters and the huge bill on countless immigrants who come to the UK with only sponging off our society in mind. We treat our wounded soldiers with contempt over those with far less worthy reasons to claim benefit and we allow the mentally sick to walk the streets. Rant over!

I'd like to think I was a genuine and hard working entrepreneur proud to create wealth, proud to create employment and proud to pay my taxes that went to make Great Britain great. Do I want to give it to this Government to squander even if it is the law - the hell I do. I'll take my skills somewhere else.  It's all very sad and no wonder UKIP are making such headway, whilst they may concern us on their ability to govern I think a lot of what we waste is better off being overseen by those with moral conscience than the incompetent individuals that currently govern.     

mwngiol's picture

Thank you!

mwngiol | | Permalink

AndyC555 wrote:

That would discourage people from wanting to use artificial tax avoidance schemes far more effictively than what is being planned.

Thank you for that, best laugh I've had for a long time! The kind of people who use these schemes would use them whatever the tax rate was, unless the tax rate was 0%! And to try to justify it by objecting to the way tax money is spent is another joke. They object to tax because they want to keep the money to themselves. Simple as.

Experience...    1 thanks

AndyC555 | | Permalink

Out of interest mwngiol, do you have much experience of giving tax advice to entrepreneurs?  I've been doing it for 16 years now, after 10 years in HMRC and my experience backs up my claim. 

 

Looking at things historically, the 1970s was the 'golden era' of artifical tax planning caused not by individuals wanting to pay no tax at all but by tax rates as high as 98%.  Even recently I saw an increase in demand for tax avoidance planning when the tax rate went up to 50%. Rather proving my point.

 

Of course, you may have lots of experience in reading newspaper stories and jumping to conclusions and if you chose to base your views on that approach good luck to you.  You would have been right at home during the Salem witch trials because, by jingo, they knew a witch back then when they saw one.

mwngiol's picture

Experience

mwngiol | | Permalink

If by tax advice you mean advising on aggressive avoidance schemes then no. The firm I work for doesn't get involved in such schemes and all new clients are advised of this at the outset of the relationship.

In my experience which clearly differs profoundly from yours, the only people who enquire about artificial mechanisms which have been created solely for the purpose of reducing tax liabilities are people who object to ever having to pay any kind of tax whatsoever.

This article was about high risk schemes. Or in other words evasion which tax law experts have tried to dress up as avoidance, sometimes successfully sometimes not. If you join such schemes you clearly can't have confidence that they are legal, but that doesn't stop you joining. So you demonstrably don't care whether you're evading or avoiding tax, as long as you don't have to pay it.

Andy you're dead right. Mwngiol wake up!

TMR | | Permalink

Mwngiol you say:

"In my experience which clearly differs profoundly from yours, the only people who enquire about artificial mechanisms which have been created solely for the purpose of reducing tax liabilities are people who object to ever having to pay any kind of tax whatsoever"

Frankly I regret to say, you just don't get it and you're way off the mark! 

I've spent 4 years on the back of some very aggressive HMRC behaviour simply to 'maximise' tax, not to pay the 'fair' amount of tax.

Yes I have become involved in offshore trusts, why?  - simply to protect my already 'taxed savings'. It is after all my right as a UK citizen!  

And I'm certainly not prepared to have this Government raid my hard earned savings and give it away to lazy good for nothing oiks who can't be bothered to get off their fat useless backsides and do a fair days work!

Unfortunately views such as yours mean hard working and honest people who bring genuine benefit to the UK  and who are indeed proud to pay tax but only 'to be used for right and fair means' get sullied by such liberalism. Get off your bandwagon that we're such a bunch of uncaring selfish folk! 

As an entrepreneur I've created over 300 jobs, (how many have you created?) . I've paid all my taxes and the taxes of my employees, so when it comes to the autumn of my life and find this Government are hell bent on screwing me over and having to listen to pathetic voices such as yours saying 'we're all the same' - then shame on you!!

Not all folk are hell bent on paying "no" tax you idiot, what we object to is paying tax twice and sometimes thrice! Unfortunately as I keep saying, but you don't care to listen, some unscrupulous types have found "experts" who find loopholes. I need protection from the Government and you so I don't get swept up in the furore.

I'd certainly prefer Andy's firm that your firm for any advice!    

 

Point Well Made    1 thanks

jamesashburton | | Permalink

TMR wrote:

It isn't just the question of the tax we legally have to pay that is the moral question it's what we spend it on. 

This point is too often overlooked. If politicians expect taxpayers to take a moral stance then they should do likewise. I don't just object to some of the uses they put taxpayers money to, I also object strongly to so much of that money being wasted. Throwing money at a problem doesn't guarantee success - just look at the NHS for example, not to mention HMRC computer systems of course. Politicians seem to take the view that the taxpayer has a duty to pay whatever amount of tax is demanded and then shut up. 

I used to have a business in England and one year I announced a general pay rise only to have two of my five employees come to me and ask not to get the rise as if they did they would lose three times as much from various benefit cuts. Daft. Immoral.

Lost the Plot

jamesashburton | | Permalink

lapwater11 wrote:

Our nation has completely lost faith in politicians and this whole debate about tax shows just why. They are tackling the wrong issues (becuase they think it wins votes) rather than creating a sensible tax policy designed to let our entrepreneurs off the leash and create wealth. Our country needs wealth creators now more than ever since the war.

I agree but frankly I think the real problem is that few, if any, politicians actually understand how tax works. They also seem to have lost sight of the concept of separation of powers between the executive (government); legislature (parliament); and judiciary. Politicians seem to think that if they make or change a law the judges have to implement it without question. Therefore as they can't get their heads round tax law (or any other) and HMRC keep losing cases, they get frustrated. Poor dears.

As for Lady Hodge (whose late husband was a Judge) - frankly I think she is more concerned in raising her own profile than anything else. Having a trust as she and many other politicians have, is not illegal but she seems to think that everyone else is of a less moral persuasion than her (HA!) and must be up to no good.

mwngiol's picture

TMR

mwngiol | | Permalink

I have no interest in having a discussion with someone who thinks using statements like "Bongo Bongo despots" and calling other contributors idiots is suitable for a professional forum.

mwngiol    1 thanks

lapwater11 | | Permalink

mwngiol, please don't take offence. This is a subject that really gets people going! I am afraid I also think your view is wrong (I respect your right to have it, but I don't think it is the correct view). Most of the people I have met who have carried out aggressive avoidance are not totally against paying tax. They have just felt that the proportion of their profits that end up going to the tax man has gone beyond the pale. They consider that when they take risks to create wealth for all of us that they should not be penalised. Let's not forget that many risk everything they own to make the profits they make. Most that I know have commented that they would not carry out avoidance schemes if tax was fair. Taxing a risk taker to the extent of 50% of his profits is not fair. It is a disincentive to take risk and build businesses. That is why avoidance is rife. Frankly I do not blame entrepreneurs for doing it. Our government is at fault and needs to make tax fairer before the talent all moves abroad. ANd mwngiol, don't you feel like you are letting the government off the hook by signing up to this moral argument? They only put the moral argument out there to score votes and disguise the fact that taxes are too high. You are doing what the government and HMRC want you to do instead of making them feel uncomfortable and forcing them to look at the real issues that need solving.

Attention focused but some refuse to see it

TMR | | Permalink

The problem mwngiol is there are far too many people (like you) with a 'blinkered liberal view'.

Godfrey Bloom got our attention admittedly using inflammatory words, but rather the liberals debate it they take offence and refuse to acknowledge the problem, probably because they know they'd lose the argument.

Pushing 60 and having worked hard, taken risks and put back far more to society than I took out, I'm not about to stand quietly aside whilst the Government and their civil servant puppets raid my retirement pot and give it to despots who drive around in Bentleys, own homes in Paris and have their own planes! This is the extreme end of it admittedly but raising taxes from people who can't afford it and who shouldn't have to pay anymore and then waste it, is simply not acceptable.

Unfortunately you don't see it and you don't want to see it, neither does this Government and neither does the Civil service. Regrettably we get the same old story from all the bigots in all the mainstream parties and apart forums like this, we have little or no say in the matter. 

Your ill advised comment that 'we're all the same and don't want to pay any tax' deserves the strongest of rebuttals but rather understand you got it wrong, you'll hide behind being offended because someone dared to hit back.

For the record I'm damn well offended by your suggestion I don't want to pay any tax because I've used a scheme to protect myself from people I no longer trust. And that's what it all boils down to.

We're being accused of being immoral (by association unfortunately of some who do take far too much advantage I admit), by the very people who are frankly immoral themselves! Most of these people hide behind calling themselves politicians and have the audacity to say they are looking after our best interests, you seem to have been persuaded by Government spin which get's ever stronger. 

Only yesterday we were told Senior Civil Servants get their BIK tax paid for them having done a cosy behind the scenes deal with HMRC!  - nice if you can do that I suppose!  

I think we've reached rock bottom when the trust is gone. There are far too many scandals of waste and corruption that gets swept under the carpet, but heaven forbid a few of us decide we no longer want to pay into it (and utilise tax planning schemes to help) and we're the ones labelled immoral!  That cannot be right.

Tell me does your firm have a motto you'll only advise the moral ones , and who's morals do they have to follow?, and once you've advised them I'm sure your firm's charges are at the lower moral end of the scale!

Second rant over, but come out the closet mwngiol and address this serious issue rather than hide behind being offended. 

 

By the way, (as I've been out of the profession for some time) does anyone know how having your BIK tax paid for you works?  Surely there's a benefit by having the tax paid? and should't that be taxed? and then if that tax is paid isn't there another benefit by having that tax paid as well?,  and isn't this exponential down to the last penny?    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

A great debate but

pauljohnston | | Permalink

the amount of tax in question is tiny in comparion with this Countries spending £700bn+.

A less complex tax system would make it easier for HMRC to collect more ...  Once again it is the politicians who have the power but dont use it to make the tax system more workable.  I guess because it would no be headline news

 

mwngiol

AndyC555 | | Permalink

mwngiol 

 

Our particular deabte started because you rejected my comment that lower tax rates would do more to stop artificial tax schemes than any amount of extra legislation.  You say you advise clients but don't use 'artificial' schemes. 

 

Are you saying that you do NO tax planning for your clients?  That you arrange their tax affiars so that they pay the MOST tax they can under current legislation?  I doubt you do.  So you reduce your clients tax bill by tax planning that they pay for. So, would they pay for that tax planning if it made virtually no difference, because tax rates were uniformally low? I doubt it. Can you deny that your own clients engage in tax planning they wouldn't do if tax rates are low? Are you saying your clients are drawn form a holy, morally perfect cadre that other firms don't have access to? And what makes your tax planning morally acceptable? Are you saying you've NEVER advised husband & wife partnerships or companies where income is spread more evenly than the effort might suggest?  You've NEVER suggested dividends instead of salary to save NI?

 

It seems to me that you've decided to draw the 'moral line' right at the edge of the things you do. Easy and convenient.

 

 

 

 

 

 

 

 

The problem with the British

lapwater11 | | Permalink

I believe the media are massively at fault because the media continues to spout the moral line and does not challenge and question the government. If the media did, there might be some downward pressure on levels of tax.

But there is another problem. The British people.

We are by nature too compliant.

When the French feel passionately about something they do something about it.

We don't.

Perhaps we should start a campaign for fairer taxes?

I think if the people of Britain and British businesses were to campaign for lower and fairer taxes the government might do something about it because it would become politically easier. Deomcracy at its best.

I would be interested to see how many people would be interested in supporting a campaign for lower and fairer taxes. I am sure it must be possible to do something on Facebook or Twitter or something like that.

Campaign for fairer taxes

TMR | | Permalink

I take it the Taxpayer's Alliance isn't working ?  The TaxPayers’ Alliance has a small but enthusiastic campaign team based in central London. With activists all across the country, and over 75,000 supporters nationwide.

"Perhaps we should start a

smallbeancounter | | Permalink

"Perhaps we should start a campaign for fairer taxes?"

It's already happening and its called the Taxpayer's Alliance. Join and make a donation. I have.

Oh and by the way if you haven't already seen this, please watch it now. It's very short and very pertinent.

http://www.taxpayersalliance.com/campaign/2013/02/video-broken-promises-inheritance-tax.html

Taxpayer's Alliance

lapwater11 | | Permalink

I have been looking at the Taxpayer's Alliance website and they do seem to be very well organised.

But I would like to see a hard and focussed attack on current rates of CT, Income Tax, and NI because these are the demotivators to entrepreneurs. I am not so bothered about council tax, tax on beer and cider, etc, etc.

The Taxpayer's Alliance does look to be a good organisation but in relation to the three taxes I have mentioned above I feel something BIG and innovative is needed. Something that gets into the press on the front pages. Something that makes it politically diffiuclt for the government to ignore.

Airline staff strike and cause chaos.

The anti capitalists have huge demonstrations in London.

Those that oppose fracking attend protests

I am sure there must be something the overtaxed of Britain could do. I am just not sure what it is.

Of course I am a bit of a hypocrit I suppose because having made the above post entitled "The problem with the British," I probably ought to be organising this mysef!!

 

Lapwater

AndyC555 | | Permalink

I agree with you but in the current political and media climate who would dare call for lower taxes?

The media problem is whilst the vast majority of tax experts are on the sensible side of the debate it ony takes one screeching tax campaigner to claim that "higher taxes on everything is Justice and all multi-national companies are the devil" and the media give that campaigner as much or more time and space than all other commentators added together.  Throw in a few fanciful computations 'prooving' the the tax gap is a gizzillion pounds a day and you've got easy tabloid 'bash the rich' headlines.

 

We're not in a financial mess in this country because of the banks or the recession or multi-national tax avoiders or any one of the other fanciful reasons given.  We're in a mess because the government spends far more than it receives.

Attacking Government    1 thanks

TMR | | Permalink

The Tax Payers Alliance cover a wide spectrum of issues which addresses "the Government". ie. faceless individuals who all blame one another and yet no one does anything. 

Any attack has to be on one individual alone to get him or her to take notice.

Can I recommend our Business Secretary Vince Cable?

Apparently he can be contacted be e-mail on 'enquiries@bis.gsi.gov.uk' however, don't expect a reply - I've tried on a different matter and still waiting!

Maybe we should start a blog which copies to everyone e-mails addressed to him on a specific issue which he fails to answer?  Shaming is maybe the only thing that works because I quite agree, whilst the Tax Payers Alliance upholds a lot we believe in, too much gets lost by changing issues and not focusing on one person.