Crosswords2 mins ago
Tax Avoidance
Jimmy Carr (comedian) is being criticised for his use of a tax avoidance system.
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If you earned millions of pounds, wouldn't you try and find a legal way in which you could retain as much of that as possible or would you think "best get my cheque off to the tax man for this load of wedge"?
Should he feel guilty that he's depriving the country of a lot of money he would pay in taxes or is he clever in working out a way to keep his fortunes that appears to be completely legitimate?
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If you earned millions of pounds, wouldn't you try and find a legal way in which you could retain as much of that as possible or would you think "best get my cheque off to the tax man for this load of wedge"?
Should he feel guilty that he's depriving the country of a lot of money he would pay in taxes or is he clever in working out a way to keep his fortunes that appears to be completely legitimate?
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We all work hard, we don't all get the same breaks though. I don't understand why it is acceptable to imply only high earners work hard so it is right they should extract sky high amounts of wealth from the economy that the rest of us can only dream of. But since they can, the very least the government ought to do is not to allow them to avoid their fair share of contribution, demanding from the rest more to make up the difference.
the problem being if you ''witch-hunt'' the super rich then they will simply move to the isle of man or guernsey where there is no tax...therefore depriving the uk revenue at the higher rate..i know what id do if i was being persecuted in this manner...id be on the next flight out of here...he pays his taxes which he is expected to...as he says ''not a penny more''...why should he???...i know i wouldnt pay more to the govt if i didnt have to...if there was a loophole with which ordinary workers could use then they would...you would wouldnt you???
Some jobs do have those loopholes. Many NHS employees are entitled to a shoes and stockings tax allowance, also one for washing uniforms at home where the uniform cannot be put in with the general wash for health and safety reasons. There is also the professional organisation membership allowance.
Now okay the amounts aren't the same but the principal certainly is.
Now okay the amounts aren't the same but the principal certainly is.
The answer is to reduce taxation(in fact have a level % system with a geared startup) so that there is no incentive to avoid. This has been tried and does work. Not only that you then get others comeing to the country (paying in - yes I know that sounds odd to us Britts who are used to those coming in and taking only) and so everyone wins.
However the liberals and lefties simply can't get a grasp of this. Somehow they dont erstand that 90% x zero = zero and is far less than 25% of 'some huge figure'.
High tax bands are the politics of envy.
However the liberals and lefties simply can't get a grasp of this. Somehow they dont erstand that 90% x zero = zero and is far less than 25% of 'some huge figure'.
High tax bands are the politics of envy.
Indeed they are youngmafbog.
There is no earthly reason why some people who happen to be raking it in should pay 40% or 45% of their income just because their earnings have exceeded an arbitrary threshold whereas others pay just 20%. In absolute terms they are still paying huge sums to the Exchequer to see them wasted.
What most people would really like to see is a proper controlled and significant reduction in public spending. Since 1997 public spending has increased by 50% in real terms (i.e. stripping out the effects of inflation). Yet when the government suggests that this is unsustainable and embarks on a programme of modest reductions in the rate of increase (not cuts, actually, just a reduction in the rate of increase) this is heralded as “savage cuts”. Just what is it we have gained from public spending in the last fifteen years that we didn’t have pre-1997 and that we apparently cannot now possibly do without?
The government should be seeking ways to reduce their insatiable appetite for ever-increasing amounts of other people’s money, not demonising those who take all legal measures to retain as much of their cash as they can.
There is no earthly reason why some people who happen to be raking it in should pay 40% or 45% of their income just because their earnings have exceeded an arbitrary threshold whereas others pay just 20%. In absolute terms they are still paying huge sums to the Exchequer to see them wasted.
What most people would really like to see is a proper controlled and significant reduction in public spending. Since 1997 public spending has increased by 50% in real terms (i.e. stripping out the effects of inflation). Yet when the government suggests that this is unsustainable and embarks on a programme of modest reductions in the rate of increase (not cuts, actually, just a reduction in the rate of increase) this is heralded as “savage cuts”. Just what is it we have gained from public spending in the last fifteen years that we didn’t have pre-1997 and that we apparently cannot now possibly do without?
The government should be seeking ways to reduce their insatiable appetite for ever-increasing amounts of other people’s money, not demonising those who take all legal measures to retain as much of their cash as they can.
One old chancery judge said he did not see it as the duty of a citizen to so arrange his affairs that the government needed a shovel to remove his wealth!
What is surprising is that this works. If I 'borrow' money from my (UK) company, I have to pay it back in a year or it gets quite heavily taxed. If I had paid that in to the company, I'd have had to make it a loan, and thus get it out untaxed. But, if I earn money as a self-employed person, I can't simply pay it into the company untaxed. I have to declare the income for tax; what I do with the rest is up to me.
It should be quite easy to stop the scheme, and it's a fair bet that a US citizen could not use such a scheme; they are remorseless in taxing income, (but have a generous approach to relief on some of it). Declare, or confirm, the individual, who generates the income, tax-resident in England, regardless of whether or not uses a company here or 'abroad' to receive it, or indeed creates a company to employ him when he earns it (a management company) and tax him as an individual because he generates it all. The Revenue has a general power to attack schemes which are simply for tax evasion purposes; these company arrangements exist because the individuals are tax-resident here, not, say, in Monaco (or Jersey) and don't want, or can't achieve, residence elsewhere, and for no other reason. Really big earners, like Sir Philip Green, are tax- resident in Monaco and live there, to the extent the Revenue now requires. Any man who can pay his wife a billion is definitely tax- resident elsewhere!
What is surprising is that this works. If I 'borrow' money from my (UK) company, I have to pay it back in a year or it gets quite heavily taxed. If I had paid that in to the company, I'd have had to make it a loan, and thus get it out untaxed. But, if I earn money as a self-employed person, I can't simply pay it into the company untaxed. I have to declare the income for tax; what I do with the rest is up to me.
It should be quite easy to stop the scheme, and it's a fair bet that a US citizen could not use such a scheme; they are remorseless in taxing income, (but have a generous approach to relief on some of it). Declare, or confirm, the individual, who generates the income, tax-resident in England, regardless of whether or not uses a company here or 'abroad' to receive it, or indeed creates a company to employ him when he earns it (a management company) and tax him as an individual because he generates it all. The Revenue has a general power to attack schemes which are simply for tax evasion purposes; these company arrangements exist because the individuals are tax-resident here, not, say, in Monaco (or Jersey) and don't want, or can't achieve, residence elsewhere, and for no other reason. Really big earners, like Sir Philip Green, are tax- resident in Monaco and live there, to the extent the Revenue now requires. Any man who can pay his wife a billion is definitely tax- resident elsewhere!
Us hard working people should do what we can to highlight what these rich people are doing. They are avoiding what we can't avoid, and it should be stopped.
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In Carr's case it is deceitful, because he is doing it with loans that he has no intention of repaying
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In Carr's case it is deceitful, because he is doing it with loans that he has no intention of repaying
I pay £78 a month on my pension. I know I am better off than many other pensioners but only because I and my husband worked bloody hard to make sure we were (only me now). If I could think of a legal way to get around it, I would, but unfortunately down at this end of the financial scale there is no way.
New Judge - I think your conclusions are WAY off. Do you think if the government was the most fiscally adept, and cut public spending to a bare minimum thereby reducing the overall tax burden, all these wealthy citizens would suddenly rearrange their tax affairs?
If the to rate of tax came down to 20%, and you could get away with paying 1%...ya gonna pay 1%.
And this whole story stinks of hypocrasy. I would like every newspaper editor who has splashed this story to have their tax affairs investigated. Are they paying 40%?
I would highly doubt it...
If the to rate of tax came down to 20%, and you could get away with paying 1%...ya gonna pay 1%.
And this whole story stinks of hypocrasy. I would like every newspaper editor who has splashed this story to have their tax affairs investigated. Are they paying 40%?
I would highly doubt it...
I didn’t draw any such conclusions, sp. The two things are entirely separate. I simply widened the debate.
Of course people will find ways to reduce their tax bill, however low the rate. I don’t blame Mr Carr for doing his best to minimise his liabilities, though he was a trifle daft to castigate others for doing so. But undoubtedly one of the reasons wealthier people do this is because the tax system is so punitive towards them. As I said, when somebody sees almost 50% of their earnings taken from them, whilst others pay a far smaller percentage they must see it as unfair. The fact that they are earning more (and so paying more) is no reason to up the percentage they pay. It’s saying, effectively, “You’ve got far too much money, so we’ll relieve you of a large chunk of it”. It’s not a principle I support.
Of course people will find ways to reduce their tax bill, however low the rate. I don’t blame Mr Carr for doing his best to minimise his liabilities, though he was a trifle daft to castigate others for doing so. But undoubtedly one of the reasons wealthier people do this is because the tax system is so punitive towards them. As I said, when somebody sees almost 50% of their earnings taken from them, whilst others pay a far smaller percentage they must see it as unfair. The fact that they are earning more (and so paying more) is no reason to up the percentage they pay. It’s saying, effectively, “You’ve got far too much money, so we’ll relieve you of a large chunk of it”. It’s not a principle I support.
Paying income tax is only a small part of the tax system , many people not just the wealthy are paid indirectly a salary on which they don't have to pay tax. Such as business expenses , use of company cars, business lunches corporate entertainment, travelling the world supposedly for business purposes and frequently taking the spouse along as a secretary or consultant. Hotel accommodation first class travel etc. there is almost no end to what can be claimed under the expenses label. As we know politicians are amongst the worst offenders . What is more it is all legal.
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