Panorama and Tax avoidance

[Mungler]

9 minutes ago, JohnfromUK said:

I entirely agree about spending;  I also have no complaint with using legal means to avoid tax .......... however I believe that these legal avoidance means (often called loopholes) by and large are discriminatory in that they are not readily available to all taxpayers equally - and so I don't believe they should be legal.  The idea that it is legal to set up (for example) a complex web of overseas shell companies with the sole aim of reducing tax is wrong in my book.

I dunno. There was one year I ended up paying more than Amazon - it sounded grand but only because Amazon paid slightly North of F-all that year, and yes that sparks instant moral outrage.

But 2 points:

1. If these corporates can lawfully avoid then why wouldn’t they - they could be sued by their shareholders as being negligent if they didn’t and if the government doesn’t like it the ridiculous tax law implemented under Brown need to be changed

2. If I ran a large corporate efficientky and profitably and delivered value to my shareholders who may well be institutional investors and pension funds, then the idea of paying a shed load of tax to fund the foreign aid payment to India, the failed and abandoned NHS computer system, the London skybridge that never was; well, this is old and from 2014 but it’s still valid http://www.telegraph.co.uk/news/politics/10626565/TaxPayers-Alliance-warns-of-120billion-government-waste.html

[oowee]

12 minutes ago, Hamster said:

You simply have to despair at the profoundly dimwitted who can't see avoiding or evading tax legally or illegally is one and the same. Those who make the immoral legal are in on the scam, daah. 

Exactly. Legal or not, It's simply not right to get paid for a job, move the money offshore and then pay yourself a loan to avoid tax.

Edited November 6, 2017 by oowee

[Mungler]

14 minutes ago, Hamster said:

You simply have to despair at the profoundly dimwitted who can't see avoiding or evading tax legally or illegally is one and the same. Those who make the immoral legal are in on the scam, daah. 

 

I never knew my ISA and pension were immoral.... thank you for your wisdom

 

 

 

 

[shoot and be safe]

1 hour ago, SNS said:

Couldn’t resist adding this

Suppose that once a week, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
And the tenth man (the richest) would pay £59.　
So, that's what they decided to do.
 
The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly beer by £20." Drinks for the ten men would now cost just £80.
 
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men? The paying customers? How could they divide the £20windfall so that everyone would get his fair share? They realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.　

So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.

And so, the fifth man, like the first four, now paid nothing (a100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).　
Each of the last six was better off than before with the first four continuing to drink for free.　

But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," declared the sixth man. He pointed to the tenth man, "but he got £10!"　
"Yeah, that's right," exclaimed the fifth man. "I only saved a £1 too. It's unfair that he got ten times more benefit than me!"　

"That's true!" shouted the seventh man. "Why should he get £10 back, when I only got £2? The wealthy get all the breaks!"　

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up.　

The next week the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important - they didn't have enough money between all of them to pay for even half of the bill!　

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy and they just might not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.　
 
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

Very well made explanation. 

 

Personally if I could pay less tax, I WOULD. 

Good luck to anyone who can. 

As for the likes of Apple, Google ect paying small amounts of tax on their profits, they will be paying a fortune in income tax for their employees (Yes I know the tax is coming out of the employees wage, but at least they are employed).

I found the panorama programme tonight to be very one-sided and I would wager that the presenter had a "few extra days" on the various tropical islands he visited to make the programme.

[7daysinaweek]

newsnight right now!

[treetree]

I personally have no problems with the cast of Mrs Brown's Boys using this tax evasion scheme. 

In fact,  I hope they make so much money that they never have to work again. 

[poontang]

1 hour ago, shoot and be safe said:

 

As for the likes of Apple, Google ect paying small amounts of tax on their profits, they will be paying a fortune in income tax for their employees (Yes I know the tax is coming out of the employees wage, but at least they are employed).

I found the panorama programme tonight to be very one-sided and I would wager that the presenter had a "few extra days" on the various tropical islands he visited to make the programme.

 

Apple pay around £250m per WEEK in corporate tax. and directly employ some 80,000 people worldwide. I'm pretty sure they pay more in tax than any other company worldwide. Of course they could pay more, but if they meet their legal requirements why on earth would they?

I'm damn sure I wouldn't pay any more than I had to!!

[pinfireman]

13 hours ago, TriBsa said:

In the days when the BBC was largely a public service broadcaster, Panorama was good. It had investigative journalists who covered and exposed matters in the public interest. But now the BBC is politically implicated and involved it's scope is neutered. You will not see unbiased investigations into say global warming, globalisation, mass immigration, the EU, child grooming gangs etc. Just a few tit bits thrown to the populace that do not offend it's political masters. 

Dead Right!

[pinfireman]

4 hours ago, SNS said:

Couldn’t resist adding this

Suppose that once a week, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
And the tenth man (the richest) would pay £59.　
So, that's what they decided to do.
 
The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly beer by £20." Drinks for the ten men would now cost just £80.
 
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men? The paying customers? How could they divide the £20windfall so that everyone would get his fair share? They realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.　

So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.

And so, the fifth man, like the first four, now paid nothing (a100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).　
Each of the last six was better off than before with the first four continuing to drink for free.　

But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," declared the sixth man. He pointed to the tenth man, "but he got £10!"　
"Yeah, that's right," exclaimed the fifth man. "I only saved a £1 too. It's unfair that he got ten times more benefit than me!"　

"That's true!" shouted the seventh man. "Why should he get £10 back, when I only got £2? The wealthy get all the breaks!"　

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up.　

The next week the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important - they didn't have enough money between all of them to pay for even half of the bill!　

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy and they just might not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.　
 
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

Correct!

[pinfireman]

3 hours ago, panoma1 said:

So by your example, if the ninth and tenth richest men disappear before paying the £77 for their drinks..........consequently instead of paying the £23 for their drinks, the whole £100 bill for all the drinks must now be paid by the low to middle income four remaining men?.....including paying for the first four poorest men?  So the four low to middle income men must pay for the drinks of all ten men....including the two richest and the four poorest?

I think I understand that!....do you?

 

But the 2 richest did not turn up, therefore why should they be included? They did not drink......

[Hamster]

9 hours ago, Mungler said:

 

I never knew my ISA and pension were immoral.... thank you for your wisdom

 

 

 

 

I had ZERO doubt that somebody would twist the matter and my actual point......thank you for not letting us down. 

This has nothing to do with your ISA or pension or other members who reduce their tax from %47 down to 20% or even those who get advised by their accountants to do what's necessary in order to minimise their tax bills WITHOUT having to run and hide in the toilet when confronted. 

This is about tactics that are put there by government(s) to allow the rich and corporations to evade/avoid (who cares it's the same thing) billions/trillions of tax which could be spent on our NHS, roads, infrastructure and of course your pension instead of being hidden in offshore accounts doing nothing other than buying influence and politicians. 

[panoma1]

7 hours ago, pinfireman said:

But the 2 richest did not turn up, therefore why should they be included? They did not drink......

Read my post again! In the scenario I gave, they did turn up, had their drink, but disappeared before they contributed to the bill! 

[Mungler]

3 minutes ago, Hamster said:

I had ZERO doubt that somebody would twist the matter and my actual point......thank you for not letting us down. 

This has nothing to do with your ISA or pension or other members who reduce their tax from %47 down to 20% or even those who get advised by their accountants to do what's necessary in order to minimise their tax bills WITHOUT having to run and hide in the toilet when confronted. 

This is about tactics that are put there by government(s) to allow the rich and corporations to evade/avoid (who cares it's the same thing) billions/trillions of tax which could be spent on our NHS, roads, infrastructure and of course your pension instead of being hidden in offshore accounts doing nothing other than buying influence and politicians. 

Your original post was a sweeping statement that all forms of tax avoidance was evasion by a different name and immoral etc

Sorry, but your post was pretty explicit and succinct - if you meant to say something else or reference corporations and billions of pounds then you should have said so.

You have now clarified your point and singled out corporates with their millions and billions? Is this not the same but scaled up though? If Mr Blogs the postman ducks 20% in an ISA or 40% in a pension, isn’t it the same for companies but with a £500m turnover? What’s 20%/40% if that?

What you’re missing is ‘the law’. If corporates are allowed to take certain measures within the law then they will be judged and measured by those allowances or allowable practices.

By way of further example, I doubt that either the Queen, Lewis Hamilton or the cast of Mrs Brown’s boys have a clue where their money has gone - they’ve handed their money over to a large multinational accountancy practice and said ‘do you’re best, crack on’... and they have. I don’t see that as immoral and it’s certainly not illegal.

 

 

 

 

 

 

 

[Hamster]

5 minutes ago, Mungler said:

Your original post was a sweeping statement that all forms of tax avoidance was evasion by a different name and immoral etc

Sorry, but your post was pretty explicit and succinct - if you meant to say something else or reference corporations and billions of pounds then you should have said so.

You have now clarified your point and singled out corporates with their millions and billions? Is this not the same but scaled up though? If Mr Blogs the postman ducks 20% in an ISA or 40% in a pension, isn’t it the same for companies but with a £500m turnover? What’s 20%/40% if that?

What you’re missing is ‘the law’. If corporates are allowed to take certain measures within the law then they will be judged and measured by those allowances or allowable practices.

By way of further example, I doubt that either the Queen, Lewis Hamilton or the cast of Mrs Brown’s boys have a clue where their money has gone - they’ve handed their money over to a large multinational accountancy practice and said ‘do you’re best, crack on’... and they have. I don’t see that as immoral and it’s certainly not illegal.

 

 

 

 

 

 

 

We have had this tax evasion type discussion before and you and others would have known what my actual thoughts were, cheap point scoring is pretty much the only line of defence left which is a fair compliment I suppose. What you're missing is that the Law is the *** here, that is the whole point, it is governments that allow laws to be manipulated to avoid paying true taxes. 

NO, in no way is paying 20% tax the same or equivalent to an actor opening a company in an off shore island they couldn't find on the map, then transfer their salaries into an account there, then pay themselves a sum calling it whatever  OMG, at what point did we lose our moral compass to the point that anyone can even think these are the same !!

If these tax evaders are all so legal and dandy how come they all squirm and run away when confronted ? Why do they all plead ignorance and put the phone down ? Is it unreasonable to expect a person who has placed their funds into a third party account to truly KNOW how the mechanism works ? Why stutter if they're so sure they stand on firm moral and legal ground. 

[Mungler]

It's not point scoring - you made a grand sweeping assertion (which was made for dramatic effect) and now you want to say it means something else, something less. Fine, we've clarified that so lets move on.

If I am Lewis Hamilton and I want to spend all my time driving F1 cars, training and wearing bizarre clothes, I really neither have the time nor the knowledge / expertise to handle my hundreds of millions of pounds, so I hand everything over to my accountants who then are under a legal obligation to take proper care of my money within the law and do their best for me. I really have no idea about the purchase structure sitting behind my private jet - I probably don't know how or where it's insured, where the fuel comes from, what tyres are on the wheels or even the pilot's name.

If my accountants turned round at the end of the year and said, Lewis thanks for your money, at the end of this financial year you now have way less than what you originally gave us because we volunteered you (under what we perceived to be your moral obligation, to pay as much tax as you possibly could) then those accountants would be sued and sacked for not properly performing their role and duties to me as their client.

I think there is a moral obligation to pay tax and chip in but that obligation is met by paying the bare minimum provided by law; obviously, if you are super rich then you have the luxury of moving somewhere else on the globe and into a different legal system of your choice and if you want to pay more then that's your choice - you can donate to charity, set up a foundation or whatever, but the idea that the super rich need to be taxed till they squeak just doesn't sit well with me.

If we're stretching the moral obligation then it shouldn't stop with tax, it should continue with how governments spend tax payer's money - it's the tax payer's money after all.

[JohnfromUK]

37 minutes ago, Mungler said:

 If Mr Blogs the postman ducks 20% in an ISA or 40% in a pension, isn’t it the same for companies but with a £500m turnover? What’s 20%/40% if that?

 

 

 

No - it is nothing like the same!

Using an ISA, or Pension Relief is NOT AVOIDANCE - tax ducking any more than using your personal allowance is tax avoidance!  These schemes were set up deliberately by HM Treasury in order to encourage people of normal wealth to save for pensions and 'rainy days', old age. new car and all manner of things.  They have been recognised and refined by successive Chancellors of both main parties.  Saving is (rightly) seen as good for the economy.

Using a complex set of rules, trusts, offshore accounts to avoid tax, avoid PAYE, avoid CGT or whatever - albeit without breaking the law - IS AVOIDANCE.  Most of these schemes have been deliberately set up to avoid tax that would normally be due through exploiting loopholes and small print in the law - often in very compex ways.  It isn't illegal, but is recognised as 'not what was intended ' by the laws.  Tightening/correcting the law is the answer here, but is not easy to do.

Taking payment in untraceable means (cash, kind, exchange etc.) and not declaring it IS EVASION - and is illegal - and will risk being investigated/prosecuted by HMRC.  I'm sure we all recognise that.

[Mungler]

Stolen from an accountant's forums where they have been having the same discussion:

"Of course ISAs are a form of tax avoidance. The user/investor is using a means to avoid a tax by investing in a vehicle that legally avoids incurring tax that might have been due if another investment vehicle had been used.

If I advise someone to put money into an ISA this is surely tax planning (as well as avoidance)?

I guess the unfortunate thing is that there is a spectrum with obvious (and moral?) planning at the one end and obvious (immoral and illegal) evasion at the other. The danger too is that what one person sees as moral and 'right' another might not. Is it moral for example for a senior member of say Bank management to earn millions when many employees earn significantly less? The danger then is that we get into a sort of situational morality game - a bit like MPs expenses, where valid claims (ie within the rules) suddenly become classified as immoral?

I'm not convinced that we as professional accountants and advisers should be determining morality; our role is to advise clients on what is legal (eg in my personal view planning in advance not 'planning' in retrospect) and what is illegal (eg hiding income). If there are grey areas we can only use our best judgement but need to rely on our Government and political representatives (oh dear...) to change the law. "

[JohnfromUK]

7 minutes ago, Mungler said:

Stolen from an accountant's forums where they have been having the same discussion:

"Of course ISAs are a form of tax avoidance. The user/investor is using a means to avoid a tax by investing in a vehicle that legally avoids incurring tax that might have been due if another investment vehicle had been used.

 

I disagree with that post and consider it wrong.  As I said, ISA, pension tax relief etc. were set up by the Chancellor with the purpose of encouraging saving - not avoiding tax.  I therefore disagree that they are 'avoidance'.

[Paul1440]

1 minute ago, JohnfromUK said:

I disagree with that post and consider it wrong.  As I said, ISA, pension tax relief etc. were set up by the Chancellor with the purpose of encouraging saving - not avoiding tax.  I therefore disagree that they are 'avoidance'.

+1

[krugerandsmith]

11 hours ago, Mungler said:

 

I never knew my ISA and pension were immoral.... thank you for your wisdom

 

 The ISA isn't immoral ..... The interest they pay you is.

 

 

 

[Hamster]

33 minutes ago, Mungler said:

It's not point scoring - you made a grand sweeping assertion (which was made for dramatic effect) and now you want to say it means something else, something less. Fine, we've clarified that so lets move on.

1) If I am Lewis Hamilton and I want to spend all my time driving F1 cars, training and wearing bizarre clothes, I really neither have the time nor the knowledge / expertise to handle my hundreds of millions of pounds, so I hand everything over to my accountants who then are under a legal obligation to take proper care of my money within the law and do their best for me. I really have no idea about the purchase structure sitting behind my private jet - I probably don't know how or where it's insured, where the fuel comes from, what tyres are on the wheels or even the pilot's name.

2) If my accountants turned round at the end of the year and said, Lewis thanks for your money, at the end of this financial year you now have way less than what you originally gave us because we volunteered you (under what we perceived to be your moral obligation, to pay as much tax as you possibly could) then those accountants would be sued and sacked for not properly performing their role and duties to me as their client.

3) I think there is a moral obligation to pay tax and chip in but that obligation is met by paying the bare minimum provided by law; obviously, if you are super rich then you have the luxury of moving somewhere else on the globe and into a different legal system of your choice and if you want to pay more then that's your choice - you can donate to charity, set up a foundation or whatever, but the idea that the super rich need to be taxed till they squeak just doesn't sit well with me.

4) If we're stretching the moral obligation then it shouldn't stop with tax, it should continue with how governments spend tax payer's money - it's the tax payer's money after all.

1) I agree in the main but I believe the wealthy should know enough about the way money is being moved around in order to avoid tax or VAT etc, in truth they DO know but only plead ignorance when it suits them. Nobody has asked Lewis to know the make of tyres fitted to his jet.

2) Scraping the bottom of the barrel. 

3) More scraping, nobody has asked them to pay more, merely the SAME as everyone else, nobody wants to tax the rich till they squeal, more emotive language to hide from the real issue.

4) Indeed we should , why on earth not. 

 

 

 

 

[Hamster]

16 minutes ago, Paul1440 said:

+1

+2............it's called scraping the bottom of the morally indefensible, "legally" corrupt barrel. 

Edited November 7, 2017 by Hamster

[pinfireman]

1 hour ago, Mungler said:

Your original post was a sweeping statement that all forms of tax avoidance was evasion by a different name and immoral etc

Sorry, but your post was pretty explicit and succinct - if you meant to say something else or reference corporations and billions of pounds then you should have said so.

You have now clarified your point and singled out corporates with their millions and billions? Is this not the same but scaled up though? If Mr Blogs the postman ducks 20% in an ISA or 40% in a pension, isn’t it the same for companies but with a £500m turnover? What’s 20%/40% if that?

What you’re missing is ‘the law’. If corporates are allowed to take certain measures within the law then they will be judged and measured by those allowances or allowable practices.

By way of further example, I doubt that either the Queen, Lewis Hamilton or the cast of Mrs Brown’s boys have a clue where their money has gone - they’ve handed their money over to a large multinational accountancy practice and said ‘do you’re best, crack on’... and they have. I don’t see that as immoral and it’s certainly not illegal.

 

 

2 hours ago, Hamster said:

I had ZERO doubt that somebody would twist the matter and my actual point......thank you for not letting us down. 

This has nothing to do with your ISA or pension or other members who reduce their tax from %47 down to 20% or even those who get advised by their accountants to do what's necessary in order to minimise their tax bills WITHOUT having to run and hide in the toilet when confronted. 

This is about tactics that are put there by government(s) to allow the rich and corporations to evade/avoid (who cares it's the same thing) billions/trillions of tax which could be spent on our NHS, roads, infrastructure and of course your pension instead of being hidden in offshore accounts doing nothing other than buying influence and politicians. 

"Evade" and "Avoid" are NOT the same thing.....get the Oxford Dictionary if in doubt! Unless, of course, if you come from a Left political  view, where all lines can be blurred to suit the narrative?

 

 

 

 

[pinfireman]

24 minutes ago, Hamster said:

1) I agree in the main but I believe the wealthy should know enough about the way money is being moved around in order to avoid tax or VAT etc, in truth they DO know but only plead ignorance when it suits them. Nobody has asked Lewis to know the make of tyres fitted to his jet.

2) Scraping the bottom of the barrel. 

3) More scraping, nobody has asked them to pay more, merely the SAME as everyone else, nobody wants to tax the rich till they squeal, more emotive language to hide from the real issue.

4) Indeed we should , why on earth not. 

 

 

 

 

Jeremy,s gang want to tax them until they squeal.....  

[Paul1440]

Jeremys gang will tax them until they move to where they keep their doe. 

Edited November 7, 2017 by Paul1440