Can't See The Tax "Avoider"

Re: Can't See The Tax "Avoider"

Right.

It's all immoral then. Cash your ISA in

 

These lads (in the majority) are classed as very good players for their clubs, but when they put on an England shirt they are more often than not absolutely useless

 

Definitely if you are using off shore accounts and Dodgy Foreign banking systems to avoid tax by using those schemes.

 

Whats dodgy about off shoring loads of self employed people do it

 

If you mean small private company director/ shareholders paying a small salary and taking dividends ? This avoids national insurance but the benefit is being reduced by the introduction of a dividend tax.

There is no minimum wage for the self employed.

 

Really ? Not amongst the self employed I act for.

 

I think he means they use the HSBC off Shaw Lane

 

Did you get your flexi ticket?

 

No.i.mean off shore umbrella companies

 

Are they like parasols at high tide?

 

So good I posted it twice

 

ISAs were set up specifically by the Government to encourage a small level of savings among the population. Anyone investing in an ISA is using a method designed for purpose, it is tax free interest and growth and is not being manipulated to provide an unintended gain.

 

Tax free ie avoiding paying the tax you would had it been invested elsewhere

It's call effective taxation management

 

I was in business for 32 years and during that time I was absolutely bombarded with mailshots, telephone calls and letters from accountants with ever more complex tax saving schemes. I rejected them all, on moral grounds as well as the "hassle" of setting them up. However, in both a business and personal capacity I made use of tax saving mechanisms such as ISAs, and yes I did take advantage of the system by paying dividends instead of salaries, at times.

During this time I questioned myself on what constitutes "acceptable" tax avoidance and what doesn't. My definition is that it's fine to use the tax laws for the purposes for which they were intended. For example, an ISA is obviously designed to save people tax, as are personal tax allowances, business capital allowances and taper reliefs etc etc, all of which come and go with different governments. The problem comes when somebody clever realises that a tax law, that was originally and obviously intended for some other purpose, could be "bent" into a tax saving loophole. Employee Benefit Trusts, for example. I think all accountants will know what I mean, but it's difficult to put it into words. We all know what the "spirit" of the tax laws is supposed to be.

I compare it to getting a speeding or a parking ticket. If I get a parking ticket, I could possibly get out of it using a loophole by claiming that the letters on the no parking sign were the wrong colour or the wrong size or whatever. However, I know whether I parked illegally or not, therefore I should just pay up.

The sad fact is that if everyone paid the correct amount of tax, the overall burden on any individual would be less anyway. Avoidance should be avoided at all costs. It's immoral.

 

All of this well put. My friendly account is very keen for me to look at all my 'options' except the one where I just pay what I owe.

 

Ok, if you transfer married couple's allowance from one spouse to the other would you consider that avoidance ?

If you claim a legitimate motor expense therefore reducing your tax liability, is that avoidance ?

 

You are using logical arguments.

 

Personal tax allowances are intended to allow people to save tax, therefore it's not immoral to use them for that purpose. Claimable expenses are designed to allow people to save tax, therefore there's nothing wrong with claiming a legitimate motor expense to reduce your profits and save tax.

The problem comes when you transfer an asset to your wife to save tax, if she happens to live in Monaco. Or if you persuade a back street garage to give you an inflated bill for £500 for a job which actually cost £100. The first is legal avoidance, the second is illegal evasion. Both are obviously against the "spirit" of the tax system and are both wrong in my eyes.

 

Agreed, but I wonder if Tyrone regards the transfer of allowances as avoidance. It reduces the tax liability as does investment in an ISA.

Monaco... Philip Green, the ****. I take it that is to whom you refer ?

 

You may think that, I couldn't possibly comment.....

Transferring allowances is fine (in my opinion), as that's what the allowances are intended for. It's like a shop which gives me a voucher for 50p off a bottle of beer. The shop can't really quibble if I give it to my wife and she goes to get some beer. They could, however, quibble if she tries to buy some wine with it, as she's using it for something other than intended.

Top my mind there's 3 categories: -

Tax evasion - illegal and anybody doing it is a **** and should be locked up.
Tax avoidance - not technical illegal but anybody doing it is a ****.
Tax planning - fine as that's what was intended when the rules were drafted.