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  • FIRST POST
    • MatthewAinsworth
    • By MatthewAinsworth 9th Mar 17, 8:49 PM
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    MatthewAinsworth
    Tax avoidance shouldnt be prosecuted
    • #1
    • 9th Mar 17, 8:49 PM
    Tax avoidance shouldnt be prosecuted 9th Mar 17 at 8:49 PM
    Tax avoidance, as against evasion, is down to government policy, whether they were trying to achieve something (eg pension saving) or stimulate an industry or if current rules just aren't tight enough. Basically, it's the lawmakers fault if the law is insufficient. Some forms, I.e. ISAs, are far more accepted if there's widespread take-up.

    When you hear of HMRC clamping down on avoidance, theyre clamping down on something that isn't illegal. There is a danger of compromising common law if we start prosecuting people who haven't committed a crime for political reasons - if the public find issue with greed then make it illegal to do these things- business needs a legal and tax system that is constant and it can predict and plan around
Page 1
    • POPPYOSCAR
    • By POPPYOSCAR 9th Mar 17, 9:30 PM
    • 10,270 Posts
    • 21,213 Thanks
    POPPYOSCAR
    • #2
    • 9th Mar 17, 9:30 PM
    • #2
    • 9th Mar 17, 9:30 PM
    I am confused.

    Who is being prosecuted for tax avoidance and how when it is not illegal?
    • Wayne O Mac
    • By Wayne O Mac 9th Mar 17, 9:39 PM
    • 189 Posts
    • 247 Thanks
    Wayne O Mac
    • #3
    • 9th Mar 17, 9:39 PM
    • #3
    • 9th Mar 17, 9:39 PM
    Who is being prosecuted for tax avoidance and how when it is not illegal?
    Originally posted by POPPYOSCAR
    No one. The OP is a buffoon.
    • agrinnall
    • By agrinnall 9th Mar 17, 9:46 PM
    • 17,656 Posts
    • 13,359 Thanks
    agrinnall
    • #4
    • 9th Mar 17, 9:46 PM
    • #4
    • 9th Mar 17, 9:46 PM

    When you hear of HMRC clamping down on avoidance, theyre clamping down on something that isn't illegal. There is a danger of compromising common law if we start prosecuting people who haven't committed a crime for political reasons
    Originally posted by MatthewAinsworth
    If you have concrete examples of this please post links to the relevant cases, otherwise we'll have to go with Wayne's conclusion.
    • MatthewAinsworth
    • By MatthewAinsworth 9th Mar 17, 9:54 PM
    • 2,615 Posts
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    MatthewAinsworth
    • #5
    • 9th Mar 17, 9:54 PM
    • #5
    • 9th Mar 17, 9:54 PM
    https://www.google.co.uk/amp/s/amp.theguardian.com/business/2016/nov/01/hmrc-investigating-19bn-in-potential-tax-avoidance-by-super-rich

    (Why would they investigate avoidance? Why would company's like Google or Starbucks be pressured into paying aside from negative publicity?)

    https://www.gov.uk/government/news/tax-avoidance-enablers-to-face-tough-new-penalties

    (Fining enablers of a legitimate activity and it mentions avoiders going to court)
    • unforeseen
    • By unforeseen 9th Mar 17, 10:18 PM
    • 1,456 Posts
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    unforeseen
    • #6
    • 9th Mar 17, 10:18 PM
    • #6
    • 9th Mar 17, 10:18 PM
    Going back to August last year, HMRC have plans to decide that what was avoidance is now evasion and effectively backdate the decision
    On Wednesday, HM Revenue & Customs released its long-anticipated proposals for new punishments for individuals and companies involved in designing, marketing or facilitating tax avoidance arrangements. The proposed penalties — which include a fine of up to 100 per cent of the amount of tax avoided — would apply to anyone professionally involved in a scheme that was later defeated by HMRC.
    Source: https://www.ft.com/content/57ed249e-6488-11e6-a08a-c7ac04ef00aa
    Last edited by unforeseen; 09-03-2017 at 10:21 PM.
    • polymaff
    • By polymaff 10th Mar 17, 5:22 PM
    • 1,552 Posts
    • 667 Thanks
    polymaff
    • #7
    • 10th Mar 17, 5:22 PM
    • #7
    • 10th Mar 17, 5:22 PM
    If you have concrete examples of this please post links to the relevant cases, otherwise we'll have to go with Wayne's conclusion.
    Originally posted by agrinnall
    https://www.gov.uk/government/publications/tax-avoidance-litigation-decisions/tax-avoidance-litigation-decisions-2015-to-2016

    Though I suspect that this is yet another intentional obfuscation of the terms avoidance and evasion.
    Last edited by polymaff; 10-03-2017 at 5:26 PM.
    • MatthewAinsworth
    • By MatthewAinsworth 10th Mar 17, 5:35 PM
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    MatthewAinsworth
    • #8
    • 10th Mar 17, 5:35 PM
    • #8
    • 10th Mar 17, 5:35 PM
    If backdated laws came up in any other walk of life thered be an outcry, anything you legally do now could in theory be a crime tomorrow (I.e. doctors removing life support, or selling a house that had an issue the buyer didn't pick up) and it'd be harder to make decisions for fear of prosecution
    • polymaff
    • By polymaff 10th Mar 17, 5:37 PM
    • 1,552 Posts
    • 667 Thanks
    polymaff
    • #9
    • 10th Mar 17, 5:37 PM
    • #9
    • 10th Mar 17, 5:37 PM
    Also, note:

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/399270/2__HMRC_GAAR_Guidance_Parts_A-C_with_effect_from_30_January_2015_AD_V6.pdf

    Which accepts that the courts have, in the past, been quite explicit in saying that tax avoidance is totally acceptable - even moral! (B2.2 in the above document).

    The goverment is regularly told that "it is legal until you legislate to make it illegal" - and not just over tax avoidance/evasion. Think of the recent Brexit case. So the government is following that advice by implementing the GAAR in law.

    The OP is not paranoid
    • dori2o
    • By dori2o 10th Mar 17, 9:00 PM
    • 7,235 Posts
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    dori2o
    There are tests applied to all avoidance schemes to consider whether they fall within the boundaries of the basis or intent of the legislation, or whether they are acting outside of the scope of that legislation, or are using the legislation outside of what is was designed for.

    When a ruling is made which deems that the scheme.is outside of the original basis of the way the legislation, or is excessive/overly agressive, HMRC quite rightly deem that the scheme is invalid and collects the tax due/issues demands for the tax which has not been paid since the scheme began.

    This is the same as would happen in most other financial transactions, I.e PPI, where it was deemed unfair the person who lost out financially has the ability to reclaim that loss.

    If those who invested in the scheme believe the ruling is wrong they take the matter to the courts and put their case forward.

    Its not a case of backdating laws, its merely clarifying the intent of those laws.
    To equate judgement and wisdom with occupation is at best . . . insulting.
    • MatthewAinsworth
    • By MatthewAinsworth 10th Mar 17, 10:05 PM
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    MatthewAinsworth
    Judging by intent is a little variable for the purposes of common law, I would've thought otherwise it is effectively part of the law
    • kinger101
    • By kinger101 11th Mar 17, 6:10 PM
    • 3,691 Posts
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    kinger101
    Tax avoidance would be defined as legally avoiding tax in a way the law did not intend. So it does not include ISAs.

    HMRC is perfectly entitled to challenged the legality of any tax avoidance scheme if they believe they are not sound. Just as taxpayers are entitled to legally challenge HMRC if they believe a tax has been levied without the proper legal authority.

    They won't touch anything where they don't believe they have a reasonable chance of succeeding as it would be an expensive failure. They barely touch the main avoidance scheme for corporation tax (transfer pricing) precisely because of this.

    As for the legal avoidance schemes, it is the responsibility of our government to remove any loophole. It's beyond HMRC's remit.
    • polymaff
    • By polymaff 11th Mar 17, 6:25 PM
    • 1,552 Posts
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    polymaff
    Tax avoidance would be defined as legally avoiding tax in a way the law did not intend...
    Originally posted by kinger101
    And who will decide what the law intended?
    • unforeseen
    • By unforeseen 11th Mar 17, 6:37 PM
    • 1,456 Posts
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    unforeseen
    You can't use a 'What I said is not what I meant' mentality with legislation. If it is failing to do what the law makers intended it to do because it was poorly written and failed to cover that situation then it will need amending.

    Intent can not be different to actual effect
    • kinger101
    • By kinger101 11th Mar 17, 6:57 PM
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    kinger101
    And who will decide what the law intended?
    Originally posted by polymaff
    The Commissioners of the Revenue and Customs, and then the hierarchy of the Courts.
    • kinger101
    • By kinger101 11th Mar 17, 7:02 PM
    • 3,691 Posts
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    kinger101
    You can't use a 'What I said is not what I meant' mentality with legislation. If it is failing to do what the law makers intended it to do because it was poorly written and failed to cover that situation then it will need amending.

    Intent can not be different to actual effect
    Originally posted by unforeseen
    Not entirely true. If a literal meaning isn't clear, a judge may interpret a law based on what the written statute was attempting to do. It's known as the mischief rule of interpretation.
    • polymaff
    • By polymaff 11th Mar 17, 7:24 PM
    • 1,552 Posts
    • 667 Thanks
    polymaff
    Not entirely true. If a literal meaning isn't clear, a judge may interpret a law based on what the written statute was attempting to do. It's known as the mischief rule of interpretation.
    Originally posted by kinger101
    What judges tend to say is "if that is what you intended, then pass unambiguous legislation to that intent"

    Then they get criticised by totalitarian bigots - and their favourite newspapers - as in the recent Brexit case.
    • kinger101
    • By kinger101 12th Mar 17, 12:37 AM
    • 3,691 Posts
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    kinger101
    What judges tend to say is "if that is what you intended, then pass unambiguous legislation to that intent"

    Then they get criticised by totalitarian bigots - and their favourite newspapers - as in the recent Brexit case.
    Originally posted by polymaff
    Well, that's your interpretation based on a single example (which you've slightly distorted). You're attempting to make a political point which I don't disagree with, but is nonetheless irrelevant. I'm proud our judiciary can tell our government to go f**K itself if it tries to say law A meant law B. That'surely all that matters.
    Last edited by kinger101; 12-03-2017 at 12:39 AM.
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