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

[pb21]

85% of NSC posters are honest. Not bad.

I wonder what the percentage would be if the question was:

If you were given a totally legal way of paying less tax, but you considered it as unscrupulous and/or immoral, would you take it?

I answered yes to the OP’s question, but would answer no to the one above.

 

[Triggaaar]

I wonder what the percentage would be if the question was:

If you were given a totally legal way of paying less tax, but you considered it as unscrupulous and/or immoral, would you take it?

I answered yes to the OP’s question, but would answer no to the one above.

Likewise

 

[beorhthelm]

If you were given a totally legal way of paying less tax, but you considered it as unscrupulous and/or immoral, would you take it?

"unscrupulous and/or immoral" is subjective and differ widely, so not tell you much as practically everyone would answer "no". this poll is at least direct and honest.

 

[Normski1989]

I wonder what the percentage would be if the question was:

If you were given a totally legal way of paying less tax, but you considered it as unscrupulous and/or immoral, would you take it?

I answered yes to the OP’s question, but would answer no to the one above.

Ditto.

 

[Gazwag]

I’m Ltd Company and pay myself what ever my accountant tells me to pay myself and also I pay 20% Tax and at the end of year get a lump sum back into my business account
My biggest bug bear is VAT which I pay quarterly but even that is a bit of a legal dodge as I charge it at the 20% rate but only pay the VAT man at a rate 16%
I can imagine these big earners make serious money out of the VAT alone

I don't understand the first bit, maybe you are getting CIS tax back that your company has suffered in the year. For VAT aren't you just on the fixed rate scheme designed to make it easy for small businesses so you pay 16% of your gross income rather than setting your sales vat against your purchases vat. At 16% are you sure you are not paying too much vat under that scheme? Big earners do not qualify for the fixed rate scheme so they will not make any money out of athat vat scheme.

 

[Questions]

I am a self-employed builder.

I couldn’t possibly comment.

 

[Normski1989]

I’m Ltd Company and pay myself what ever my accountant tells me to pay myself and also I pay 20% Tax and at the end of year get a lump sum back into my business account
My biggest bug bear is VAT which I pay quarterly but even that is a bit of a legal dodge as I charge it at the 20% rate but only pay the VAT man at a rate 16%
I can imagine these big earners make serious money out of the VAT alone

I think you should ask your accountant to explain to you how the VAT system works.

You usually offset any VAT paid against any VAT charged and pay the difference to HMRC. It sounds like you're on the flat rate scheme, which high earners aren't eligible for. The percentage applied depends on the industry that you work in, using an approximate average for the industry. But new rules came in that mean anyone that usually has very little to reclaim has to be on a percentage of 16.5%.

That's because on £100, you add a charge £20 VAT. Usually the £20 would be payable to HMRC less any tiny amounts of VAT to reclaim. If the new rules apply to you, you'd now pay 16.5% of the total amount received. £120 x 16.5% = £19.80. This results in a tiny benefit to compensate for the tiny amounts of VAT that would've been claimed under the standard rules.

 

[pb21]

"unscrupulous and/or immoral" is subjective and differ widely, so not tell you much as practically everyone would answer "no". this poll is at least direct and honest.

You say practically everyone would answer no, but quite a few people on here (certainly more than practicality no one), seem to be of the opinion that as what is happening is legal, have no issue with it, don't see what the problem is and think its OK. On that basis I assume they would answer yes?

 

[Normski1989]

You say practically everyone would answer no, but quite a few people on here (certainly more than practicality no one), seem to be of the opinion that as what is happening is legal, have no issue with it, don't see what the problem is and think its OK. On that basis I assume they would answer yes?

I think his point is that those people wouldn't seem those actions as immoral and therefore wouldn't answer yes. They wouldn't do anything immoral to avoid tax but each person has a different opinion on what is immoral and or unethical. Legal is a definitive term but immoral is subjective.

 

[maltaseagull]

I really don't see the issue with what I have said.

If the tax system worked correctly and all tax was collected properly and fairly from top to bottom then yes, anyone working cash in hand would not only feel less inclined to cheat the system but would struggle to do so.

It's a nice theory but if people can find a way to buck the system many of them will and do.
(You're one of the very few exceptions )

 

[mikeyjh]

thats what i recall from one (early) Guardian article, had to read to the end and there was some details on the hours spent by him and the charter, and some blog or article elsewhere highlighted the liability is approx a third. compared to others, his is still enginneered tax avoidance/borderline evasion, he should have paid up the 1/3. i think he's been poorly advised as its the sort of thing any normal person could have done (acquiring through holding company, not a plane obvs), but done properly to avoid the gaze of the tax man.

So the charter thing is to enable the business to be set up in the IOM, ie. for it to be registered in the IOM and to be due a VAT refund, it has to be a legitimate business in the IOM which, if it's not chartered by anyone else, it is not.

Then LH has to use the jet exclusively for business use, otherwise tax becomes due. Again, he clearly isn't - All that's actually happening is LH is leasing the jet from himself.

I entirely agree with you, he is being poorly advised, this doesn't stand up to much legal interrogation.

 

[mikeyjh]

I think his point is that those people wouldn't seem those actions as immoral and therefore wouldn't answer yes. They wouldn't do anything immoral to avoid tax but each person has a different opinion on what is immoral and or unethical. Legal is a definitive term but immoral is subjective.

In fairness even legal is a subjective term, especially with regard to tax legislation which is why I find it odd that people have come to conclusion that everything that is being revealed is 'entirely' legal when only a court could really decide that.

 

[Normski1989]

So the charter thing is to enable the business to be set up in the IOM, ie. for it to be registered in the IOM and to be due a VAT refund, it has to be a legitimate business in the IOM which, if it's not chartered by anyone else, it is not.

Then LH has to use the jet exclusively for business use, otherwise tax becomes due. Again, he clearly isn't - All that's actually happening is LH is leasing the jet from himself.

I entirely agree with you, he is being poorly advised, this doesn't stand up to much legal interrogation.

You're spot on. The way things appear on paper and the reality of what's actually happening are very different and it'd be quite simple to tear LH's defence to pieces.

As with most people, celebrities trust the advice they're given by experts. Unfortunately, some of these experts see their job as reducing the persons tax liability as much as possible without breaking the law, even if that means manipulating information to their advantage, regardless of ethics.

Edit: I understand what you mean with regards to legal being relatively subjective. Although the law, especially tax law, should be quite clear cut, it's often open to interpretation and manipulation, which is part of the problem.

 

[pb21]

I think his point is that those people wouldn't seem those actions as immoral and therefore wouldn't answer yes. They wouldn't do anything immoral to avoid tax but each person has a different opinion on what is immoral and or unethical. Legal is a definitive term but immoral is subjective.

Yes but then I'm not so sure you would get such a honest response. I'm sure lots would say of course not in public, but would anyway. People probably like to think they are more scrupulous than they are!

 

[rippleman]

Let's see now. I work in an industry where money laundering is a concern. WE have reported a number of individuals over the years where we had "suspicions". To NCIS. To SOCA. Not one of our reports has ever been acted on.

HMRC has had the "HSBC list" for how many years now? And how many have they prosecuted?

There is no will by the "Establishment" (Government and Civil Service) to really take any action against the individuals or organisations that are abusing the system. Now far be it from me to suggest that is because the Establishment and their cronies are the worst abusers!

It all comes down to the fact that tax AVOIDANCE is legal. If the Establishment were really bothered, legislation would be enacted to make ALL tax avoidance schemes illegal. I doubt we will ever see that day.

 

[Petee]

As a standard working person, I voted yes but if I was very wealthy like these celebrities/companies then of course I would pay the taxes.

 

[CHAPPERS]

Let's see now. I work in an industry where money laundering is a concern. WE have reported a number of individuals over the years where we had "suspicions". To NCIS. To SOCA. Not one of our reports has ever been acted on.

HMRC has had the "HSBC list" for how many years now? And how many have they prosecuted?

There is no will by the "Establishment" (Government and Civil Service) to really take any action against the individuals or organisations that are abusing the system. Now far be it from me to suggest that is because the Establishment and their cronies are the worst abusers!

It all comes down to the fact that tax AVOIDANCE is legal. If the Establishment were really bothered, legislation would be enacted to make ALL tax avoidance schemes illegal. I doubt we will ever see that day.

HRMC staff cut by 11,000 by Cameron and May is cutting 8,000 more staff.

 

[Normski1989]

HRMC staff cut by 11,000 by Cameron and May is cutting 8,000 more staff.

It wouldn't matter if they added another 1,000,000 staff members. HMRC is the most disorganised organisation that I've ever had the displeasure of dealing with. It's made up of hundreds of components that don't work together or communicate with each other. Every time they try to improve things, they make it worse.

 

[McTavish]

"Fair" isn't easily measured though is it?

If someone was a very high earner and had an income tax bill of, say, £1m per year they may feel that they are paying a "fair" amount of tax in that they're paying considerably more than 99%+ of the population. They may then seek loopholes elsewhere to reduce other tax obligations they may face.

I agree entirely but there are what one might consider "legitimate" loopholes, particularly those like ISAs, pensions, entrepreneur tax etc, and those which are deliberate avoidance and distortion of the tax code - Starbucks buying their coffee from Switzerland, Microsoft previously being based in Luxembourg despite selling their products in the UK, people investing in films that were deliberately useless for example.

I think there is a good analogy with football. Nowhere in the laws of football does it specifically say that the goalie is not allowed to stick the ball up his jumper and then run up the pitch into the opposition's goal but most people would agree that this is not something that should be allowed. It therefore covered by what used to be called ungentlemanly conduct and is now unsporting behaviour - showing lack of respect for the game.

I recognise that it is a lot more difficult to frame non-sporting laws for this sort of thing but there is already a "reasonable person" test for several laws and perhaps something like that might work. I think that most people would consider starting a company to buy a plane to rent to yourself is towards the come-off-it-you're-having-a-laugh-now end of things...

 

[NooBHA]

It's not up to Individuals or companies to morally pay tax. It is up to Governments to ensure that Legislation sets Tax Laws on a fair and equal basis as much as they can. Then they must Enforce those Laws which the current Government does not....................Mr Corbyn will do and that is why Big Businesses and Wealthy Individuals fear him

This Government haven't closed dowm ''loopholes'' in Legislation quickly enough. There is also a problem that when Legislation is drawn up it is often drawn up by Government in ''Consultation'' with the large firms of Accountants and Lawyers and they have a ''conflict of interest''

Government needs to emply more Tax Tax Lawyers. The Private Sector is ''Top Heavy'' with all the Tax Experts and Government needs to address this.

There is nothing wrong with Individuals or Companies minimising their Tax - The laws just need to be tighter so that if it is not fair then there are quick and easy ways to change the laws. And to do it retrospectively if people misinterprit the laws.

After all we minimise our mortgage payments by going to the cheapest lender. Tax is the same we all try to minimise it under the law but if it gets exploited. That I am afraid makes me really mad