'Should MoneySavingExpert encourage tax avoidance?' blog discussion

Steve059

jonthedog wrote: »

The TV licence fee is also effectively a tax. By advising people to not pay it if they only watch iPlayer, I'd say MSE crosses its own line from 'planning' to avoidance.

The TV Licencing website clearly states that you don't need a licence to use services like iPlayer to watch "catch up" programs, ie. not at the same time as they are being broadcast.

Million_Percent

jonthedog wrote: »

The TV licence fee is also effectively a tax. By advising people to not pay it if they only watch iPlayer, I'd say MSE crosses its own line from 'planning' to avoidance.

I disagree. Even if one does regard the TV license as a tax then it is a tax on the use of a specific service. If someone chooses to not use that service and therefore not be subject to the tax then that is their free choice. You can't describe it as tax avoidance any more than not owning a car is 'avoidance' of road tax.

Tax avoidance is abusing the rules of the system to achieve an outcome that was never intended when those rules were written. I think we all agree it's the rules that need changing.

As for MSE's position, I think they have the balance about right. But they shouldn't try and take any moral high ground on the issue because there are a lot of parallels between some of the advice from MSE and the tax avoidance tactics that these big corporations use.

For example, a young person can reduce their car insurance by putting one of their parents on the policy as a named driver even though the parent never drives the car.

I often get sainsburys vouchers offering significant money off online orders from 'new' customers. Their definition of a new customer is an account registered to a different email address. I've registered several email addresses and used the 'new customer' vouchers several times.

Both of these examples are an abuse of the rules of the system to gain an advantage not intended by the system's creator - not illegal or breaking the rules and we don't say it's immoral to do it. People need to be very careful before making tax avoidance an issue of morality.

jonthedog

Million_Percent wrote: »

Tax avoidance is abusing the rules of the system to achieve an outcome that was never intended when those rules were written. I think we all agree it's the rules that need changing.

The BBC has no mandate in law to insist the licence fee is paid to watch catch up programming, purely because it was not conceived when the detail of the law was written.

• A non-license payer watching Live TV on iplayer is watching content they did not pay for and evading the tax.
• A non-license payer watching the same program on catch up, is also abusing the system by watching content they did not pay for, but is merely avoiding the tax.

The morality is the same; as a licence payer it doesn't matter to me whether they watched the program live, or half an hour later; they are still watching content for free that I have paid for and 'morally' they should too.

The law is not likely to change in the near future as people that 'only' watch iplayer on catch up and don't have a TV represent a very small proportion of non-licence payers, but it is a fairly clear cut example of MSE encouraging avoidance.
The legal situation exists not because the government is trying to encourage people to behave in a particular way, but is a loophole that has yet to be closed. It couldn't possibly be thought of as tax 'planning', and it goes against Martin's claims for MSE that: "we don’t, never have" encouraged this behaviour in the blog.

Million_Percent

I think in a round about way we kind of agree on the broader issue here that MSE is not in a position to take the moral high ground. MSE may not advise specifically on tax avoidance (or may not believe they do) but they do encourage consumers to 'play' other systems in similar ways (such as the car insurance example). It's a fine line.

It seems like playing the system is acceptable behaviour if it's the common man gaining an advantage over a big business. But if it's big business or a wealthy individual gaining an advantage over the taxman then that's not acceptable. Clearly it's not a case of morality or principle. If it were then both cases would be unacceptable.

marleyboy

MSE should encourage making the most of the pounds whilst spending less of them by the use of legal avenues ONLY. Morals don't come into it, it may be morally wrong to shop at Primark or Starbucks as a result of their tax avoidance or evasion schemes, but there is no legal wrangle as to whether or not we should.

If there is a legal route one can use to pay out less to the coffers, there is nothing legally wrong with using the system to do so. Any company would argue that the purpose of finance, involves making the maximum amount of profits with the minimum amount of costs.

callum9999

I'm confused why avoiding tax "aggressively" is so evil, but "timidly" is right? Who created this arbitrary line where morality switches between the two?

Logically, avoiding tax should either be moral or immoral. Avoiding a little tax is "less" immoral than avoiding a lot of tax (assuming you think avoiding tax is immoral), but at the end of the day you are doing the exact same thing - reducing your tax bill while fully complying with the law.

callum9999

Steve059 wrote: »

The TV Licencing website clearly states that you don't need a licence to use services like iPlayer to watch "catch up" programs, ie. not at the same time as they are being broadcast.

Nor do Google have to pay the tax people are demanding they do, yet that is allegedly still immoral.

On the whole, people don't have a problem with less tax being paid, they have a problem with people/companies wealthier than them paying less tax. I.e. they want to get away with as much as they can and have others pick up the slack for them.

iAMaLONDONER

callum9999 wrote: »

Nor do Google have to pay the tax people are demanding they do, yet that is allegedly still immoral.

On the whole, people don't have a problem with less tax being paid, they have a problem with people/companies wealthier than them paying less tax. I.e. they want to get away with as much as they can and have others pick up the slack for them.

I guess it's just human nature!

zerog

ISAs are a government scheme to reduce the tax people pay on savings. Being a member of the EU is a government scheme to allow companies to move freely to a country where tax is lower! What's the difference?

Cabbagewhite

I worked for the Inland Revenue (now HMRC) for 14 years, but left 10 years ago. It makes me cross when the MP's keep dragging the various company representatives in to tell off about how the various companies arrange their tax affairs. There is a world of difference between tax avoidance and tax evasion. This is not tax evasion. It is the Accountancy firms doing what they are paid to do. The off-shore or tax haven aspect has been used by businesses and the wealthy for years - it is nothing new. Instead of prattling on about it, perhaps they should have an investigation into the use of the big accountancy practices as consultants and advisors when taxation legislation is being considered for change. That has to be a clear conflict of interest.

As to ISA's being wrong, any one who thinks that is odd. Perhaps they would choose not to have their personal allowance, after all that avoids them paying tax on some of their income.

The Government should haranguing Google, Costa et al and sort out some legislation regarding point of sale/payment taxation.