[Finance] If you were given a totally legal way of paying less tax would you take it?

[CHAPPERS]

Seriously? Are you really being serious?

The amount of tax avoided by contractors is far greater than the amounts we are talking about with the rich and famous. Tax evasion at the lower level is rife, and illegal, and all too often left unpunished.

So in a perfect world where all the tax was collected correctly from EVERYONE that was due to pay it, yes, I do think it improbable that a builder would do less cash in hand, and mainly because customers wouldn't have it.

 

[studio150]

I find it somewhat comical that a lot of people are saying that they wouldn't go down the route of paying less tax via a completely legal arrangement as they find it morally wrong.

Perhaps you should look at the position of being in the position of being paid a significant amount of money, but that the UK tax regime has returned to the wonderful days of Harold Wilson's Government and a top rate of 98%.
Would you then be willing to say earn £2m a year, but see £1.96m disappear in tax (yes I know the tax would be less given bandings but cant be bothered to work it out)

I would suggest that peoples position would shift completely and they would be looking to mitigate their tax liability as much as possible.

 

[CHAPPERS]

Would you then be willing to say earn £2m a year, but see £1.96m disappear in tax (yes I know the tax would be less given bandings but cant be bothered to work it out)

.

Ridiculous.

 

[turienzo's lovechild]

Owners of major newspaper groups, for example.

quite

 

[Thunder Bolt]

Yes. I found out that by wearing a 'uniform' with the company logo on, and washing it at home, meant that I could get a tax allowance for it. So I did.
When tax relief was allowed for a mortgage, we claimed that too.
People used to try for babies to be born just before April 5th, so they could claim a whole year's child tax allowance (before it became family allowance). All perfectly legal.

 

[Worthingite]

This "Paradise Papers Scandal" feels very much like the media telling us that bears shit in the woods. Of course people use tax dodges, it might not be ethically right, but who in their right mind wouldn't if they had the legal means to do so? Total non story in my opinion.

 

[clapham_gull]

Too simplistic a question

Interesting interview with one of the actors. Appears genuinely a bit clueless about what was going on and then miraculously finds the "funds" sent offshore have found themselves back in his bank account.

If the above is true and his method of being paid was "legal" why did whoever is advising him do that ?

It appears quite obviously that the lines are blurred.. Unlike the question.

Sent from my LG-K520 using Tapatalk

 

[RandyWanger]

Ridiculous.

Indeed, only £885,800.00 would disappear in tax.

 

[Bulldog]

Absolutely. A very disappointing reaction by some on here. Comparing an ISA in which you can make limited investment to avoiding £3m of VAT on a private jet FFS is quite frankly ridiculous. People are more outraged by a benefits claimant owning a widescreen tv.

The super rich are taking the p*ss out of ordinary people and that they can get some to feel sympathy for them is remarkable.

This, in a nutshell, is the correct answer.

 

[Westdene Seagull]

People used to try for babies to be born just before April 5th, so they could claim a whole year's child tax allowance (before it became family allowance). All perfectly legal.

My Dad has always blamed me for losing him a load of money by being born a day later than I was meant to ..... on the 6th April !

 

[Berty23]

It is not as black and white as people say. I like to think that I wouldn't aggressively avoid tax. On a similar note I am entitled to claim for lunch every time I got to London with work (which is about twice a week). My entitlement is 4.50 so that is 9 quid a week. Which equates to roughly 450 quid a year. Do I claim it? No. why? Because I get lunch every day when I work at my main site so why should I claim for something I am going to spend anyway. Why should the tax payer buy my lunch twice a week?

So I guess that is evidence that probably I wouldn't.

 

[Bra]

I am about to get flamed here.
I inherited some property and cash a while back and it's of an amount that I need an accountant to ensure it's looked after correctly. I pay what I'm advised to by way of tax and aside from asking and ensuring it's all legally invested the accountant will use what he thinks is best to increase return and reduce tax. I pay what I legally am required to and wouldn't dream of not doing so but if the options are deemed okay by the government than individuals will use them.

 

[Blackadder]

Yes. I found out that by wearing a 'uniform' with the company logo on, and washing it at home, meant that I could get a tax allowance for it. So I did.
When tax relief was allowed for a mortgage, we claimed that too.
People used to try for babies to be born just before April 5th, so they could claim a whole year's child tax allowance (before it became family allowance). All perfectly legal.

That's the way I see it.

What the Mrs Brown's cast did. however, is morally wrong in my view. (I was almost amazed how much they get paid as minor actors).

As for Mr Hamilton. He may not have done anything illegal but he is desperate for a knighthood. (Jackie Stewart got one and he was a less successful). Maybe he should wait a little longer.

 

[Thunder Bolt]

My Dad has always blamed me for losing him a load of money by being born a day later than I was meant to ..... on the 6th April !

There's always one.

 

[Stat Brother]

[tweet]927499073971802112[/tweet]

 

[tinycowboy]

I find it somewhat comical that a lot of people are saying that they wouldn't go down the route of paying less tax via a completely legal arrangement as they find it morally wrong.

Perhaps you should look at the position of being in the position of being paid a significant amount of money, but that the UK tax regime has returned to the wonderful days of Harold Wilson's Government and a top rate of 98%.
Would you then be willing to say earn £2m a year, but see £1.96m disappear in tax (yes I know the tax would be less given bandings but cant be bothered to work it out)

I would suggest that peoples position would shift completely and they would be looking to mitigate their tax liability as much as possible.

I think it's simple, but not as straightforward as you say. People have different belief systems. Some people on here genuinely do not mind paying tax to support what they see as vital public services and support of other members of society; others do have a problem with some of this, some have a problem with all of this. I don't think we would all choose to act like Lewis Hamilton, Bono or the Queen, even if we were able to.

 

[kjgood]

I'm sort of stuck in the middle here, yes everyone who is salaried and each trading company should pay their fair share of tax in line with the current legislation applicable to the country they are working or trading in. Its wrong that large corporations or super rich individuals dodge tax by moving money around, taking loans instead of salaries, taking payment into one company that you own and then selling services to another company you own and onto a third etc. as they do. There is a huge issue with dodging income tax and VAT with cash in hand work still, there always has been, whilst Mr. average PAYE man pays his full whack.

Saying that, if and when my accountant tells me that I can reduce my tax liability by changing the way I do or report something, that is in line with the current tax rules, then yes I would do that, why wouldnt I? Also I'm not rich but I do have some money invested in various pots, do I know exactly where every penny is and how it is invested? no I dont, I leave it to the investment people and I guess thats what the super rich do.

The super rich or large companies will have advisors who will talk the client through what they should be doing and where the risks or opportunities are and what they can do to maximise the return, thats part of business, every business will be doing that to some degree. Outright avoidance is wrong, although I dont see that limiting your exposure to overpaying within the rules is that wrong.

 

[Bozza]

It's not as black and white as classifying things in one of two ways:

- A scheme set up to allow people to be tax efficient so it's OK (eg ISAs and pensions)
- A loophole being abused to reduce tax obligations

As I've said on another thread, anyone who owns a small business as a limited company can choose to distribute the ownership of that company in any way they see fit. Typically, at the very least, they will split ownership with a partner or spouse so that dividend payments can be shared, thereby reducing the tax due to be paid, as there are two allowances that can be used, not one.

Often that partner or spouse, if they do not have a job, will also perform "administration" for that limited company and be paid for doing so, generally at the limit of zero rate income tax. Again, this enables money to be extracted from the company whilst minimising the tax paid on it.

These things are legal, and numerous people do it. It's using a loophole though, isn't it?

 

[dazzer6666]

Wonder how many of of those publicly lambasting the tax avoiders are self-employed and happy to do a job ‘for cash’ ?

 

[Blue3]

This is fraudulent behaviour and the fraud is being perpetrated on a colossal scale estimates put the total amount of money not paid in taxes to be in the trillions