Tax avoidance shouldnt be prosecuted

Legacy_user

Tax avoidance, as against evasion, is down to government policy, whether they were trying to achieve something (eg pension saving) or stimulate an industry or if current rules just aren't tight enough. Basically, it's the lawmakers fault if the law is insufficient. Some forms, I.e. ISAs, are far more accepted if there's widespread take-up.

When you hear of HMRC clamping down on avoidance, theyre clamping down on something that isn't illegal. There is a danger of compromising common law if we start prosecuting people who haven't committed a crime for political reasons - if the public find issue with greed then make it illegal to do these things- business needs a legal and tax system that is constant and it can predict and plan around

POPPYOSCAR

I am confused.

Who is being prosecuted for tax avoidance and how when it is not illegal?

Wayne_O_Mac

POPPYOSCAR wrote: »

Who is being prosecuted for tax avoidance and how when it is not illegal?

No one. The OP is a buffoon.

agrinnall

MatthewAinsworth wrote: »

When you hear of HMRC clamping down on avoidance, theyre clamping down on something that isn't illegal. There is a danger of compromising common law if we start prosecuting people who haven't committed a crime for political reasons

If you have concrete examples of this please post links to the relevant cases, otherwise we'll have to go with Wayne's conclusion.

System

https://www.google.co.uk/amp/s/amp.theguardian.com/business/2016/nov/01/hmrc-investigating-19bn-in-potential-tax-avoidance-by-super-rich

(Why would they investigate avoidance? Why would company's like Google or Starbucks be pressured into paying aside from negative publicity?)

https://www.gov.uk/government/news/tax-avoidance-enablers-to-face-tough-new-penalties

(Fining enablers of a legitimate activity and it mentions avoiders going to court)

unforeseen

Going back to August last year, HMRC have plans to decide that what was avoidance is now evasion and effectively backdate the decision

On Wednesday, HM Revenue & Customs released its long-anticipated proposals for new punishments for individuals and companies involved in designing, marketing or facilitating tax avoidance arrangements. The proposed penalties — which include a fine of up to 100 per cent of the amount of tax avoided — would apply to anyone professionally involved in a scheme that was later defeated by HMRC.

Source: https://www.ft.com/content/57ed249e-6488-11e6-a08a-c7ac04ef00aa

polymaff

agrinnall wrote: »

If you have concrete examples of this please post links to the relevant cases, otherwise we'll have to go with Wayne's conclusion.

https://www.gov.uk/government/publications/tax-avoidance-litigation-decisions/tax-avoidance-litigation-decisions-2015-to-2016

Though I suspect that this is yet another intentional obfuscation of the terms avoidance and evasion.

System

If backdated laws came up in any other walk of life thered be an outcry, anything you legally do now could in theory be a crime tomorrow (I.e. doctors removing life support, or selling a house that had an issue the buyer didn't pick up) and it'd be harder to make decisions for fear of prosecution

polymaff

Also, note:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/399270/2__HMRC_GAAR_Guidance_Parts_A-C_with_effect_from_30_January_2015_AD_V6.pdf

Which accepts that the courts have, in the past, been quite explicit in saying that tax avoidance is totally acceptable - even moral! (B2.2 in the above document).

The goverment is regularly told that "it is legal until you legislate to make it illegal" - and not just over tax avoidance/evasion. Think of the recent Brexit case. So the government is following that advice by implementing the GAAR in law.

The OP is not paranoid

dori2o

There are tests applied to all avoidance schemes to consider whether they fall within the boundaries of the basis or intent of the legislation, or whether they are acting outside of the scope of that legislation, or are using the legislation outside of what is was designed for.

When a ruling is made which deems that the scheme.is outside of the original basis of the way the legislation, or is excessive/overly agressive, HMRC quite rightly deem that the scheme is invalid and collects the tax due/issues demands for the tax which has not been paid since the scheme began.

This is the same as would happen in most other financial transactions, I.e PPI, where it was deemed unfair the person who lost out financially has the ability to reclaim that loss.

If those who invested in the scheme believe the ruling is wrong they take the matter to the courts and put their case forward.

Its not a case of backdating laws, its merely clarifying the intent of those laws.

System

Judging by intent is a little variable for the purposes of common law, I would've thought otherwise it is effectively part of the law