Tax gossip: Frankie Boyle in hot water

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Comedian Frankie Boyle is the latest celebrity to be in the public firing line for his tax avoidance strategies.

Boyle hit back over the weekend against the Daily Mail’s avoidance allegations from Friday regarding his tax arrangements.

The newspaper claimed Boyle "could have avoided paying nearly £900,000 tax through the voluntary liquidation of his firm last year,” despite the fact he had recently mocked Jimmy Carr for using the legal Jersey-based K2 scheme.

The England cricket team and former Fugees singer Lauryn Hill also found themselves featured in the tax headlines during the past week.

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I think when celebrities come into money they do not have a clue how to handle it and the importance of the tax laws that govern what should be paid. Second the way that some schemes are reported may not be quite as they seem.

So Jimmy Carr strolls into your office and asks for advice on how to avoid tax on 3.1 million pounds.

You think fantastic - I can make a small fortune here for doing nothing. So you phone your mate in Panama ask him to chuck the 3.1 million into a bank account in Panama as you wish to earn 8% interest you then sort out power of attorney to lend against it make another 8%. you tell Jimmy that the whole matter is complicated but can do it if he places the funds in a trust for ten years but he will be charged 3% plus 100k per year which will largely be covered by interest payments. Jimmy agrees you call the inland revenue tell them you wish to repatriate 3.1 million over 10 years and pay the tax @ 5% per year  - you pay 2% tax on interest in panama. - all agreed - job done - everyone happy. Government blow up a fuss over it - Jimmy gets red faced and the government get their anti avoidance message across. Mate and you crack open a bottle bolly!!!

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Or perhaps

someone phones Jimmy up and says "ere Jimbo how would you like to save a bit of tax - all above board and no come backs". "Crack on" says Jimmy. The rest is history.

Someone has to make these schemes in the first place. Therein lies the problem.

One way to stop avoidance would be to get rid of all tax allowances and reliefs save personal and plant (vehicles etc.). The consquence should be a lower basic rate of tax.

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The right amount of tax...

... is now the amount the press (and therefore David Cameron) say you should pay. Protest the inexcesses of the rich and famous at your own peril. It's a slipperly slope if "abusive" avoidance is curbed based soley on moral opinion, incited by the media.

If something's legal, but it offends the governments fiscal purposes (to raise money and influence behaviour), then change the law. if people go slinging their mud to freely, they could rouse the skeletons in their own cupboards.

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What is wrong though

George is the persecution of SME's at the expense of those rich enough to be able to afford all the cleverdicky accountants and tax lawyers.

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"For a nation to try to tax

"For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle”
                           

  Sir Winston Churchill
                                     

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There's a hole

in my bucket, dear magicfx, dear magicfx, a hole.

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