Is being a tax avoider socially unacceptable?

GingerBob_3

In answer to the OP's original post, "is tax avoidance socially unacceptable"?

No.

Spitting in the street is socially unacceptable, but tax avoidance is legal, and to be commended.

antrobus

Gangaweed wrote: »

... Starbucks appears to be the classic case - coffee is sold intra group at least twice before it lands in the UK, meaning it is sold to a UK entity at a fairly high price....

Starbucks UK "buys its coffee from a Swiss division of Starbucks which charges a 20pc premium on the product".

Gangaweed wrote: »

.. HMRC could argue that this is not an arms length transaction and could go on to test that in court if they disagreed with Starbucks but they don't and as a result companies do more and more outlandish things..

The ability of HMRC to challenge such things was somewhat limited by the Cadbury ruling. All this single market stuff, now makes it more of an European issue.

The EC has published the non-confidential version of its decision sent to the Netherlands tax authorities in June to open a formal state aid investigation into corporate tax rulings involving Starbucks.

http://www.taxjournal.com/tj/articles/ec-publishes-details-netherlands-state-aid-challenge-starbucks-tax-ruling-19112014

antrobus

Generali wrote: »

.... Perhaps it would be better to ask the Irish, Dutch and Luxembourg authorities why they agreed these deals.

It would appear that is exactly the question that the EC are currently asking of the Irish, Dutch and Luxembourg authorities.:)

Tromking

Clearly good politics by Labour to be percieved by voters as the party of the majority of us who are on PAYE. I sense a growing disquiet from that group re. the antics of those who employ accountants annually to avoid/evade tax etc. I`ve lost count of the occasions when small/medium business people have boasted about some tax scam they`re up to.
A healthy and well educated workforce with a first world civil society comes at a price, everyone needs to pay their whack.
If not, then **** off to Greece, a topical example of wanton tax avoidance/evasion if I ever saw one!

CLAPTON

Tromking wrote: »

Clearly good politics by Labour to be percieved by voters as the party of the majority of us who are on PAYE. I sense a growing disquiet from that group re. the antics of those who employ accountants annually to avoid/evade tax etc. I`ve lost count of the occasions when small/medium business people have boasted about some tax scam they`re up to.
A healthy and well educated workforce with a first world civil society comes at a price, everyone needs to pay their whack.
If not, then **** off to Greece, a topical example of wanton tax avoidance/evasion if I ever saw one!

Most (all?) small/medium businesses employ accountants to advice them on tax law.

Why do you what most UK based businesses to go off to Greece?

vivatifosi

Gangaweed wrote: »

Its a bit like MPs expenses, if you apply rules in a lackadaisical manner don't be surprised when folks take advantage.

Apologies for clumsy edit, am using phone.

Re the lackadaisical attitude, there is a piece in today's Economist comparing what the UK has done to regain tax relating to the HSBC compared to other European economies, its fair to say the comparison is not favourable.

The government needs to get to grips with this AND benefits AND their own expenses.

In terms of Starbucks et all, I can see popular boycotts becoming commonplace over the next few years if nothing is done.

Linton

CLAPTON wrote: »

Most (all?) small/medium businesses employ accountants to advice them on tax law.

Why do you what most UK based businesses to go off to Greece?

There is a great difference between employing accountants to advise on the correct taxes to pay and employing financial engineers to devise highly complex and artificial schemes whose sole purpose is to get around highly complex parts of the law. Most small/medium businesses clearly do the former and couldnt afford the latter.

Of course there could be grey areas between the two, and between the latter and outright tax evasion, but I cant see most small businesses going beyond simple book-keeping with appropriate tax deductions.

CLAPTON

Linton wrote: »

There is a great difference between employing accountants to advise on the correct taxes to pay and employing financial engineers to devise highly complex and artificial schemes whose sole purpose is to get around highly complex parts of the law. Most small/medium businesses clearly do the former and couldnt afford the latter.

Of course there could be grey areas between the two, and between the latter and outright tax evasion, but I cant see most small businesses going beyond simple book-keeping with appropriate tax deductions.

what is that difference you see?

to me it's outrageous that complicated schemes like salary sacrifice are allowed (they help only some workers and those at the higher bracket most) or charity gift aid (which mean I have to subsidise organisation I deeply disapprove of and would never willing support)
If the law is complex then that is because the politician have made it so often for a cheap election boost.

The simply reality, whether it is the benefits system or the tax system, is that the government creates complicated rules and regulation which sensible and intelligent people obey.

The rules of law is important rather than the mop rules of electioneering politicians.

Linton

CLAPTON wrote: »

what is that difference you see?

to me it's outrageous that complicated schemes like salary sacrifice are allowed (they help only some workers and those at the higher bracket most) or charity gift aid (which mean I have to subsidise organisation I deeply disapprove of and would never willing support)
If the law is complex then that is because the politician have made it so often for a cheap election boost.

The simply reality, whether it is the benefits system or the tax system, is that the government creates complicated rules and regulation which sensible and intelligent people obey.

The rules of law is important rather than the mop rules of electioneering politicians.

I see two different problems....

1) Government have two objectives in setting taxes, one to raise money and the other to achieve social/economic objectives (or avoid social/economic disadvantages of otherwise simple schemes). For example zero VAT on food, tax allowances for charities, VCT tax allowances. Each special case is liable to give unforeseen opportunities for the determined tax avoider. This leads to more complications in the law.

2) The tax system has to operate in an existing complex world.
Take your example of salary sacrifice - how would you stop it without adding further complications? The simple way is to regard all employer payments to your pension as simply additional personal income which you may choose to put into your pension. Then where does that leave final salary pension schemes?

On the difference between acceptable and unacceptable tax I would agree with you that salary sacrifice is unacceptable being artificial advantage taken of rules designed for other purposes. On the other hand gaining tax advantages by putting money into your pension is acceptable as that is precisely what the system was designed to promote.

CLAPTON

Linton wrote: »

I see two different problems....

1) Government have two objectives in setting taxes, one to raise money and the other to achieve social/economic objectives (or avoid social/economic disadvantages of otherwise simple schemes). For example zero VAT on food, tax allowances for charities, VCT tax allowances. Each special case is liable to give unforeseen opportunities for the determined tax avoider. This leads to more complications in the law.

2) The tax system has to operate in an existing complex world.
Take your example of salary sacrifice - how would you stop it without adding further complications? The simple way is to regard all employer payments to your pension as simply additional personal income which you may choose to put into your pension. Then where does that leave final salary pension schemes?

On the difference between acceptable and unacceptable tax I would agree with you that salary sacrifice is unacceptable being artificial advantage taken of rules designed for other purposes. On the other hand gaining tax advantages by putting money into your pension is acceptable as that is precisely what the system was designed to promote.

In this one has to consider the importance of the rule of law or the rule by mop or the incumbent political party (e.g. between say Russian justice or UK justice.)

So is the question 'what did Cameron / Putin intend to happen ' as against 'what does the law say'?
Overall, if I was in charge I would prefer the former but if I wasn't in charge, I would prefer the latter.

Now if you were setting up a business : you were working 24hours a day 7 days a week, your house was mortgaged to the hilt; your partner and kids haven't had a holiday for a year or so ;
things are tough but you are hoping for eventual rewards of a successful future business:
Your accountant points out that you can reduce your tax by using a absolutely legal device but which has recently been heavily criticised by Ed / Dave /Nick (uncle tom cobly too)


what do you do?