Tens of thousands face 'bully boy' investigations in new crackdown - The DM

LydiaJ

It seems to me that a lot of people have double standards:

"People like us can and should claim everything that the rules say we can claim, and pay no more than the rules say we must. This is obviously fair and right."

"People who are not like us should claim only what we consider to be morally fair, even if the rules say they can claim more, and they should pay what we consider to be morally fair, even if the rules say there are ways they can make arrangements to pay less."

Thus non-doms have clear consciences but froth at the mouth at the idea of benefit claimants choosing not to work even if working very hard would make them only marginally better off. Benefit claimants have clear consciences but rant about MPs claiming for absurd things "because it's within the rules, innit?". MPs make statements that they've "done nothing wrong" about their expenses and sound off in the press about non-doms. And so on for all the rest of us.

It is normal human behaviour to claim as much and pay as little as the rules say you can. Get over it.

I hope (although I haven't any idea) that what Clegg means by "crack down on tax evasion" is "take steps to catch people who are evading tax and stop them" whereas what he means by "crack down on tax avoidance" is "change the rules so that there are fewer tax avoidance strategies open to people", especially the more esoteric offshore strategies rather than the government-initiated things like putting money in ISAs. That would seem fair to me - closing some tax avoidance loopholes feels like the equivalent of changing the benefit rules to incentivise work.

If that isn't what he means then I can only applaud the beautiful succinctness of what Pennywise said:

Pennywise wrote: »

Legal tax avoidance ISN'T as bad as tax evasion you imbecile.

vaporate

I think its just wrong to target ppl for this tax.

They cant get i wrong, make up a figure andgo after ppl.

I would refuse.

StevieJ

Generali wrote: »

I don't see how you can target tax avoidance. He seems to be saying he'll target people that follow the rules and those that break the rules.

I think that's the same thing as saying, "I will target everyone" which seems oxymoronic to me.

I often can not work out who is saying what after it has been processed by the Daily Mail.

He will say that legal tax avoidance and illegal evasion are ‘just as bad’ as falsely claiming benefits, adding: ‘Both come down to stealing money from your neighbours.

’

Degenerate

Arcaine wrote: »

Just to clarify, only Directors that own shares in the company can receive dividends. Ownership and Director status are two different things.

I'm well aware of that, thank you, being a shareholder and director of a small limited company. The directors of small companies usually are the owners.

The point is that directors of small companies can control how much they pay themselves as a salary and how much they pay out in dividends, therefore the smart thing is to pay oneself a small salary that just uses up your personal allowance, and take the remaining distributable profits as dividends, which attract no NI.

In fact the income tax situation is different too - dividends are taxed at 10% up to higher rate threshold, with a 10% tax credit attached making them effectively tax free. This is to avoid double taxation - the profits have already been subject to corporation tax at a comparable rate to income tax. So a small businessman making a modest profit can actually find themself paying neither income tax nor NI.

michaels

Thank you-succinctly put.

As more and more benefits are means tested why not just scrap the artificial distinction between tax and NI. The simpler the rules the easier it is to see when they are being avoided or evaded.

LydiaJ wrote: »

I hope (although I haven't any idea) that what Clegg means by "crack down on tax evasion" is "take steps to catch people who are evading tax and stop them" whereas what he means by "crack down on tax avoidance" is "change the rules so that there are fewer tax avoidance strategies open to people", especially the more esoteric offshore strategies rather than the government-initiated things like putting money in ISAs. That would seem fair to me - closing some tax avoidance loopholes feels like the equivalent of changing the benefit rules to incentivise work.

Spartacus_Mills

1984ReturnsForReal wrote: »

You would know about butts wouldn't you Sparti!!!!.

Yes, I regulary see you speaking out of yours.

Pennywise

The funny thing with small limited companies is that it was Gordon Brown who made them attractive by creating the tax and NIC breaks completely by accident (or incompetence). Before NuLab got in, it was nowhere near as attractive for small businesses to be limited companies. Now we have a very attractive regime for small limited companies and quite a harsh regime for sole traders and partnerships - which of course is complete nonsense - there should be a similar tax regime for all kinds of small business. Gordon kept trying to get good headlines in the media and kept saying "company" rather than "business" and the legislation etc followed suit. As one prime crazy example, a limited company gets tax relief when it buys the goodwill of another business, but a sole trader or partnership doesn't get tax relief when it buys goodwill - that's logical isn't it! There is sooooo much that the new govt can do to improve fairness and also increase the tax yield - shame that Cleggy has shown himself to be just another who plays up for the headlines and hasn't a clue about the underlying substance.

Arcaine

Degenerate wrote: »

I'm well aware of that, thank you, being a shareholder and director of a small limited company. The directors of small companies usually are the owners.

The point is that directors of small companies can control how much they pay themselves as a salary and how much they pay out in dividends, therefore the smart thing is to pay oneself a small salary that just uses up your personal allowance, and take the remaining distributable profits as dividends, which attract no NI.

In fact the income tax situation is different too - dividends are taxed at 10% up to higher rate threshold, with a 10% tax credit attached making them effectively tax free. This is to avoid double taxation - the profits have already been subject to corporation tax at a comparable rate to income tax. So a small businessman making a modest profit can actually find themself paying neither income tax nor NI.

I am very aware of that, thank you, being a CIMA qualified Management Accountant and Financial Controller of a small engineering company. Sorry couldn't resist. Seriously though, I worry that the kind of language the media and some in Government are using has the potential to damage SME's. They seem to want to set up a system that means large businesses will be more tempted to remove capital, profits and jobs from the UK and leave SME's to bear the brunt of any anti tax avoidance systems set up. The system is certainly not perfect and I certainly believe there are loop holes to close, but we have to be very careful not to stifle capital flows and new job creation which are going to be vital to getting the economy growing again. I think there has to be some way of taxing the people who provide capital and jobs at a more attractive rate than just going to get a job themselves.

Spartacus_Mills

bendix wrote: »

We don't know there is any truth in what I say, because if you deconstruct what I said you will see I don't make any claims about her tax status. That is because it is . . wait for it . . a rumour.

But it is a fact that there is a rumour - and one that has gained increasing momentum in the last month or so.

I know what the rumours are, but I can't comment on their veracity or otherwise.

I can state categorically that they exist.

The point I was making was how do we know there is any truth in you claiming there is a rumour, not what the alleged rumour is as you have not stated it due to a lack of a spine on your behalf, you could have been making it up for all any of us know.

I did not comment on anything else.

You appear to have misunderstood this.

ninky_2

the lib dems certainly seem to be lumping tax evasion and avoidance together......

danny alexander quote here...http://www.guardian.co.uk/politics/2010/sep/19/lib-dem-nick-clegg-tax

"There are some people who seem to believe that not paying their fair share of tax is a lifestyle choice that is socially acceptable. It is not," he said.
"Like the benefit cheat, their actions take resources from those who need them most."
He added: "Tax avoidance and evasion are unacceptable in the best of times but in today's circumstances it is morally indefensible."

well i'd say there is plenty in society that is perfectly legal but morally questionable (cheating on your spouse for example). however, for a senior politician to stand up and say that these activities make people no better than criminals is quite something.

also nick clegg here....

Speaking on the BBC's Andrew Marr Show earlier today, Nick Clegg rounded on Labour for not doing more to clamp down on tax loopholes that he described as "perfectly legal but morally questionable".