Cameron - tax avoidance morally wrong

FTBFun

The_J wrote: »

Errr, it's really not designed for employed people, I think you may have been confused by "quit your job". That's just ITV trying to make it relevant to normal people.

I would think so - a self employed person suddenly ceasing self employment to work for a shell company in Jersey which loans them money is even more blatant than employee doing the same thing.

This doesn't actually look a million miles away from the old Employer Benefit Trust arrangements that have slowly come apart (it took Glasgow Rangers FC down).

grizzly1911

bankhater_1965 wrote: »

how can you possibly say that £100,000 salerie isnt well off wealthy or neither rich when the uk national average wage in 2011 was £26,200 ?? this a mere quarter of your £100.000

It is relative.

At one time to have £1million would have been enough to pack in work and lead a reasonably comfortable life .That figure is probably now closer to £3million +.

I take the other view, it must be quite galling to think you are rich and have your £100k yacht when someone else has a £20million pound cruiser somewhere.

At least when you are down in the run of mill territory small changes can make a big difference. Once you go past a certain point you need much bigger leaps to have the same effect.

As for K2 I thought the actual gain to the individual was to take home ~ 80% of income. Someone always wants their cut whether it be the taxman or the private sector.

Whilst you aren't responsible for your fathers actions I would be surprised if he didn't benefit from the arrangement and continue to benefit today in some way..

The_J

FTBFun wrote: »

I would think so - a self employed person suddenly ceasing self employment to work for a shell company in Jersey which loans them money is even more blatant than employee doing the same thing.

This doesn't actually look a million miles away from the old Employer Benefit Trust arrangements that have slowly come apart (it took Glasgow Rangers FC down).

Blatant? This is entirely legal! Doesn't matter it if it's blatant.

However it would be far more blatant, and bring the company potentially into disrepute if they re-employ a company rather than an individual. No sensible company would do that for anything but it's superstar employees/directors.

EBT is completely different.

edit: If you are self employed it's much easier to be flexible with your income arrangement. Whereas asking a company to constantly change where the money is going is ridiculous.

pqrdef

For those confused, bemused or amused by the concept of morality, some more dilemmas:

(1) Do you put foreign coins in vending machines? Parking meters?

(2) You go to a village fete or carol concert. Somebody is collecting an entrance fee, but there's no security and it's easy to walk in without paying. Do you?

(3) You see an opportunity to get into a football match without paying. Do you?

(4) You see an opportunity to travel on a bus or train without paying. Do you?

(5) More generally, many things depend on a degree of trust. If somebody trusts you, do you try to honour that, or do you say "more fool them" and try to exploit the situation?

(6) Should the State be able to trust us to pay what our democratically elected Parliament decides is our fair share?

FTBFun

The_J wrote: »

Blatant? This is entirely legal! Doesn't matter it if it's blatant.

I'd question the "entirely legal" aspect. We'll see on that one.

However it would be far more blatant, and bring the company potentially into disrepute if they re-employ a company rather than an individual. No sensible company would do that for anything but it's superstar employees/directors.

It is not possible to "employ" a company, so yes it wouldn't work.

EBT is completely different.

It is similar in that the "employees" are loaned monies from the EBT rather than having it paid directly from their employer.

chewmylegoff

MDG wrote: »

Personally, I agree with the taxation policy that Jersey has, a brief overview would be:

0% Corporation Tax apart from Financial Services which attract a 10% rate

0% Wealth Tax i.e. Inheritance, Capital Gains

20% Income Tax with a similar personal allowance to the United Kingdom

5% VAT/GST Tax

etc etc

More can be read on Jersey's government website, I would post a link but I do not have those privileges seems...

This is all just my opinion and I've enjoyed reading others views too.

This is all very well but how exactly is this going to cover the UK govt's expenditure.

changing our rates to those rates would result in the following losses to the treasury:

national insurance = £100 billion gone (presumably you would scrap it too as it is income tax by any other name)

income tax = removal of the upper rate would knock out another £15 billion or so.

CGT gone = £4 billion down the drain

VAT cut to 5% (we couldn't do this unless we left the EU btw) = £75 billion more gone.

IHT = £3 billion out the window.

Corporation tax 0% = £40 billion gone (even accounting for the 10% on financial services proposed).

so that's more than half of the total tax cut gone already.

the only way you could fund that sort of tax reduction is to completely abolish the NHS, and to immediately stop all benefit payments (including the state pension and pension credit).

The_J

FTBFun wrote: »

I'd question the "entirely legal" aspect. We'll see on that one.

Well it is legal at the moment. How !!!!ing hard is that to understand?

It is not possible to "employ" a company, so yes it wouldn't work.

This is a joke right? You understand what contracting is? That would be the nature of the relationship.

It is similar in that the "employees" are loaned monies from the EBT rather than having it paid directly from their employer.

It's similar in that regard only. It is against the law for it to be a contractual payment. Being self employed means you can pay yourself whenever you want and whatever figure you want, no contract, no problem.

chewmylegoff

The_J wrote: »

Well it is legal at the moment. How !!!!ing hard is that to understand?

says who? the fact that HMRC haven't prosecuted participants in the scheme doesn't make it legal - particularly when they say they are in the process of investigating it! it is "legal" insofar as the architect of the scheme considers it to be - but that is their intepretation only. it is only correct to say that no-one participating in the scheme has been found guilty of breaking the law, and there is presumption of innocence until guilt has been proven. would it be "legal" for me to shoplift something but convince the authorities that i had done nothing wrong by producing a receipt i had fabricated? i would be innocent of any crime (because i hadn't been convicted), but my actions would not be "legal".

personally, if the scheme relies on a company making a sham loan which isn't treated as remuneration on the basis that it can technically be called in, the scheme is unlikely to be considered lawful in front of the tax tribunal, because the tribunal would be likely to rule that the loans are sham loans (unless of course the scheme can demonstrate evidence that interest is charged and the loans are called in when they mature).

just my view of course...

homelessskilledworker

Graham_Devon wrote: »

Isn't Jimmy Carr another champagne socilaist?

I like the guy (sometimes) but it does appear to be yet another do as I say not as I do situation.

I have not forgiven my one time hero Ben Elton for that very same thing.

MacMickster

The_J wrote: »

Well it is legal at the moment. How !!!!ing hard is that to understand?

No. In the opinion of the firm selling the scheme it is legal at the moment. If HMRC agree then I'm sure that legislation will be introduced next year to change that.

If, however, HMRC believe that the firm selling the scheme are wrong then they will wait for tax returns to be submitted by the participants (as nobody will have committed any offence until they fail to correctly declare their income) then issue assesments which will be appealed against by the inividuals. They will then have to agree on a lead case to take to a tribunal (and quite possibly eventually to the Supreme Court). Sadly it would probably take years before a final decision is made about whether this scheme is or isn't currently legal.