David Cameron has published his tax return

[Saracen]

... Avoiding paying tax (be it whatever type) is equally not fine, but many are prepared to do it, and plenty more are prepared to profit on others who are prepared to do it.

....

Does whether avoidance is "fine" or not depend oh how you're avoiding it?

Got money in an ISA? Why not put it in a standard B.Soc account and have basic rate tax deducted at source? Putting money in an ISA is avoiding tax. The fact is, the government set these up, with limits, as tax free with the explicit intent of inducing people to use them by making them tax-free.

What about buying shares in company B because that's a growth-oriented company and you have unused CGT allowance, instead of company A where you'd pay your marginal income tax rate on dividends? After all, the reason you have a CGT allowance is because government wants us to have it, so what's wrong with utilising it? Yet, making the decision to invest in B instead of A, for that reason, is tax avoidance.

[malfunction]

Corporation tax is effectively a business expense. Taxation regimes are also competitive. The U.K. Government sets tax breaks to encourage businesses (particularly in the financial sector) to operate from London rather than (say) Paris or Germany.

So if the UK government wants to reduce tax avoidance, it could reduce Corporation tax, introduce tax incentives, and so on. Of course, this will have the red tops and the left of centre howling in mock outrage about "benefits for toffs" so it won't happen. It would also damage the economies of the offshore centres.

The thing to remember is the Governments don't create wealth, they spend it. However, they can create the conditions that favour business activities that DO create wealth.

Yep and I'm not sure anyone really knows where the lines are but - for example - to me it feels wrong to be subsidising low paid workers via the government (tax payers) rather than making businesses pay a suitable living wage (even for unskilled work) - someone has to do the 'crap' jobs. But to get there would we need to cut corporation tax and would the net effect - after a lot of 'musical chairs' - be exactly the same? Same money in and out for all parties concerned with the rules being written in a possibly clearer and nicer way?

[herulach]

Yep and I'm not sure anyone really knows where the lines are but - for example - to me it feels wrong to be subsidising low paid workers via the government (tax payers) rather than making businesses pay a suitable living wage (even for unskilled work) - someone has to do the 'crap' jobs. But to get there would we need to cut corporation tax and would the net effect - after a lot of 'musical chairs' - be exactly the same? Same money in and out for all parties concerned with the rules being written in a possibly clearer and nicer way?

It really isn't the same though - the whole benefits subsidising low income thing I get, the problem is the 'musical chairs' you rather hand wavingly cover. If everyone is payed the 'living wage' you have an increase of about £3k p.a. on a 40 hour minimum wage job (if you use the living wage calculated by the living wage foundation, rather than the rebranded minimum wage the government puts out). Thats around a 23% pay rise. In absolute terms not a lot of money, but the problem you have in implementing is that it cascades upwards. That guy that was supervising those minimum wage people for a 20% pay hike? Gotta bump his salary up, and his bosses, and his bosses. In most organisations you're probably getting into junior exec territory before the gap between roles is material enough to not have some impact. This effectively creates hugely increased costs for businesses that would presumably be offset by a reduction in corporation tax. In the meantime you haven't really acheived anything. The wage inflation means that pension liabilities increase and all you've really acheived is a lot of cost and faff for no benefit as the same net amount of money is in the system, including in the pockets of lower paid earners, as you'd have to assume the benefits would be withdrawn as a result of wage rises. Thats just considering properly rational actors which (sweeping generalisation ahead) you would assume a material number of minimum wage workers aren't. You can more or less guarantee a significant minority would see the extra money in their pay packet and use it for a car, holiday etc rather than the earmarked benefits they were recieving previously.

Starting from scratch the current system might not be how you'd design it, but the law of unintended consequences being what it is, its not worth changing for what would is effectively a different way to acheive the same end.

I'm not sure what is and isn't moral, but I can guarantee that not a single newspaper, editor, multinational news & media conglomerate or even comrade corbyn himself has ever deliberately paid more tax than they were legally obliged to do.

[malfunction]

the whole benefits subsidising low income thing I get ... living wage calculated by the living wage foundation

It's the thing I can't really shake off to be honest - I'm spoilt and I know I am compared to the published national average, and from your early responses here it would seem you are too so - can you imagine trying to live off £8.25 an hour (£17,160 pa)?

My first 'proper' job in the late 90s started at that level and at the time I only really had myself to look after and a 1 bed flat to pay the rent on. With a family and a mortgage / rent and bills to pay on a whole house it would be hard even in the cheapest parts of the UK - you'd only be getting £1,236.33 a month after tax without any further deductions (e.g. pension).

On an individual basis you can make the argument of "try harder" or "retrain" but you can't lift everyone up - someone has to do the crap jobs. And shouldn't a living wage actually be enough to live on without subsidy?

the problem is the 'musical chairs' you rather hand wavingly cover ... This effectively creates hugely increased costs for businesses that would presumably be offset by a reduction in corporation tax. In the meantime you haven't really achieved anything.

That's why I said musical chairs to be fair, it implies pointless activity.

[Raz316]

My takeaway from the whole thing is that lots of loud dumb people want to see irrelevant information to help make themselves feel like they've learnt something and MPs are now pandering to this dumb request for irrelevant information so they cannot be personally attacked for not showing irrelevant information.

People are angry because they (wrongly) think that DC has avoided tax.
People want to see the Tax return (you know... the tax on declared income, not the tax on tax avoiding income......). I could be wrong though, there might be a section on the form where you write details about all of your dastardly tax avoiding schemes.

[Jowsey]

I could be wrong though, there might be a section on the form where you write details about all of your dastardly tax avoiding schemes.

Ironically enough there is areas where you can put comments of tax schemes you've been part of if you're 'coming clean'.

However, what I imagine a lot of people were hoping for is something like this:

Income from being a Tory Scumbag: £150,000
Income I've taken personally form the poor: £80,000
Money Mammy and Daddy have given me: £200,000
Totally ill gotten gains: £70,000
Total taxable income: £500,000

Money I've decided I won't be taxed on: (£500,000)

Total tax paid: NOT A BLINKING PENNY

Or something to that effect.

I may be mistaken but of the one's I've seen so far the only person who I've seen break a rule is Comrade Corbyn? Submission of a late return and the £100 filing deadline penalty that goes with it. Tsk.

Can this issue go away now? We have genuine political issues to discuss, like the EU referendum (it's not called Brexit...).

[Smudger]

My main problem is that the whole attitude once the Panama Papers thing blew up was as if he was hiding something, and that he personally intervened to maintain the status quo when Europe was pushing for more transparency with offshore trusts.
I also think that publishing tax statements means nowt, if someone's evading tax, it's not going to be on that statement.

[herulach]

It's the thing I can't really shake off to be honest - I'm spoilt and I know I am compared to the published national average, and from your early responses here it would seem you are too so - can you imagine trying to live off £8.25 an hour (£17,160 pa)?

My first 'proper' job in the late 90s started at that level and at the time I only really had myself to look after and a 1 bed flat to pay the rent on. With a family and a mortgage / rent and bills to pay on a whole house it would be hard even in the cheapest parts of the UK - you'd only be getting £1,236.33 a month after tax without any further deductions (e.g. pension).

On an individual basis you can make the argument of "try harder" or "retrain" but you can't lift everyone up - someone has to do the crap jobs. And shouldn't a living wage actually be enough to live on without subsidy?



That's why I said musical chairs to be fair, it implies pointless activity.

I am indeed significantly above national average, as is my wife, and we don't have kids. That being said, the house next door to ours is presently up for rent for £500/month for a decent size 3 bed semi. On 2 minimum wage incomes that should be comfortably livable, you're not going on holiday a lot but you'd hardly be starving. Move that to london where you could barely get a 1 bed flat in zone 6 for that and its more of a problem.

[TheAnimus]

http://blogs.spectator.co.uk/2016/04...-arrangements/

[opel80uk]

As for morality, my view is that my tax affairs are between me and HMRC, and morality has nothing to do with it. Legality does.

Is that entirely correct though? You said that you wouldn't use complex, but legal, loopholes to save you paying (more) tax by manipulating a system in ways it was never intended to be used. Why, if not for moral or (as quite rightly pointed out by Serious Sam) ethical reasons?

[SeriousSam]

Is that entirely correct though? You said that you wouldn't use complex, but legal, loopholes to save you paying (more) tax by manipulating a system in ways it was never intended to be used. Why, if not for moral or (as quite rightly pointed out by Serious Sam) ethical reasons?

It will be a value judgement... which may sound trite, but everyone's definition of value is different. I can't of course speak for TheAnimus, but personally it comes down to "self" in that there is a line where being sensible with money ends and valuing it for more than it is worth starts.

[SeriousSam]

http://blogs.spectator.co.uk/2016/04...-arrangements/

This line alone made the piece worth reading;

"When those Guardian journalists thought about the Panama stories, they must have experienced the thrill felt by the televangelist Jimmy Swaggart as he railed against adultery from his pulpit having just slept with a New Orleans prostitute."

[peterb]

If the government is serious about reducing the power of offshore regions with favourable tax regimes, they could make the UK's tax regime for favourable for businesses and the wealthy.

I'd rather have 100 business paying corporation tax on their profits at 10% than 5 paying 50%.

Of course in the Blairmore case, corporation tax was not an issue as the company wasn't set up to make profits directly, and tax on the profits was paid on the income derived from the investment, and where appropriate capital gains tax.

So if, as a result of being offshore, DC had an income of £50,000 and he pays tax at 30%' that is income to the treasury of £15k. But if the income had only been 25k because of a less favourable tax regime, the treasury would only have gained £7.5k.

Of course these figures are only examples, but increasing tax rates can be counter-productive.

The other benefit of lowering Corporation tax and encouraging businesses to locate to the UK is that it reduces unemployment, and the salaries of those employees are also subject to tax.

However, it seems that the current tax havens are the States of Delaware and Nevada which have favourable tax regimes.

It's a relatively old article, but this makes interesting reading

http://www.nytimes.com/2012/07/01/bu...aven.html?_r=0

However, this is more up to date, I wonder if this article is from first hand experience?

http://www.theguardian.com/us-news/2...avens-delaware

[Saracen]

Is that entirely correct though? You said that you wouldn't use complex, but legal, loopholes to save you paying (more) tax by manipulating a system in ways it was never intended to be used. Why, if not for moral or (as quite rightly pointed out by Serious Sam) ethical reasons?

Because, for me, the risks outweigh the benefits, especially given recent general anti-abuse legislation, and on a pragmatic level, I don't have the kind of assets or income to justify it anyway.

If you use methods acknowledged by HMRC as being perfectly legal, you aren't running a risk. One such method, as I said a few days ago, saved us a figure in the 6-digit ballpark. But before doing it, I spoke to HMRC and asked if it was legitimate, and the answer was "absolutely, yes".

My experience is that HMRC are entirely reasonable, friendly and helpful PROVIDED you are trying to do things correctly. Being straight and up-front with them is, at least at my level, best policy. On the other hand, if you get cute, and try to deceive or be overly aggressive in trying to avoid tax, you can find yourself up to your rear-end in inspectors, be audited year after year, and in extreme cases, end up with punitive fines, interest assessments and even prosecution. They can make life very uncomfortable if they wish. It ain't worth it ... to me.

[yamangman]

He released as little information as he could get away with and claims he's done a great service. Make everyone's tax returns public. Man's a hypocrit in the great tory tradition. Brave? Scumbag more like. You have to wonder in the history of his family where their wealth was made and therefore where their power comes. I'm guessing slavery.

[Zak33]

You have to wonder in the history of his family where their wealth was made and therefore where their power comes. I'm guessing slavery.

really?

is that what they did? I haven't ever read that.