Day 11: 12 days of Xmas

michaels

antrobus wrote: »

Since you insist.:)

Avoidance is exploiting the tax rules to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no commercial purpose other than to produce a tax advantage. It involves operating within the letter but not the spirit of the law.

It does not include international tax arrangements like base erosion and profit shifting (BEPS), which will be tackled multilaterally through the Organisation for Economic Co-operation and Development (OECD). The OECD defines BEPS as “tax planning strategies that exploit gaps and mismatches in tax rules to make profits disappear for tax purposes or to shift profits to locations where there is little or no real activity but the taxes are low resulting in little or no overall corporate tax being paid”.

Where we can challenge cross-border tax avoidance or aggressive tax planning under UK law, it is reflected in the tax gaps for avoidance and legal interpretation, but where the effect of such activity is the result not of frustrating UK law but of exploiting the international tax framework, we do not include it in the avoidance tax gap. Tax avoidance is not the same as tax planning. Tax planning involves using tax reliefs for the purpose for which they were intended. For example, claiming tax relief on capital investment, saving in a tax-exempt ISA or saving for retirement by making contributions to a pension scheme are all forms of tax planning.

Measuring tax gaps 2015 edition
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/470540/HMRC-measuring-tax-gaps-2015-1.pdf

I wonder where pension salary sacrifice to maximise tax credits entitlement falls on the avoidance scale....

purch

Of course the amount that the UK Government thinks was avoided, and the actual amount avoided could easily be vastly different.

Malthusian

The answer is 1.3 trillion pounds.

Source:

1) UK GDP was 1,808 billion.

2) UK tax take was 515 billion.

3) HMRC belives that all money made in the UK rightfully belongs to itself, and any money left in an individual's pay packet is money that HMRC has graciously given to them. (Hence the increasing use of terms like "allowances" and "tax credits" to describe your own money.) Therefore, the total "tax avoidance" is 2) subtracted from 1). ;-)