Should Government be setting example regarding Tax Avoidance

VTech

Just wondering what your opinions are regarding the labour party and the £1.5m donation and the tax avoidance due from the donation.
Surely if they expect the layperson to steer clear of such avoidance schemes they should also be setting the same example ?
Could someone prosecuted for using a scheme now use labour party as defence, saying if they can, why cant I ?

Thought provoking at least !

daviesee

Most Mps arrange their finances to avoid tax in a legal way.
They are hypocrites who I wouldn't hold up much hope of setting an example.

Until they lead the way, I will follow their example.

bartman100

VTech wrote:

Just wondering what your opinions are regarding the labour party and the £1.5m donation and the tax avoidance due from the donation.
Surely if they expect the layperson to steer clear of such avoidance schemes they should also be setting the same example ?
Could someone prosecuted for using a scheme now use labour party as defence, saying if they can, why cant I ?

Thought provoking at least !

What about the Bullingdon Club running the country? Thought provoking!

As for waiting for MPs to make a principled stance before you follow their example, you'd have to wait for a very long time I fear. First, you'd have to find some MPs with principles. For as long as the law allows tax avoidance then I find the whole 'moral outrage' disingenuous and hollow. Change the law then tax the buggers to hell and back.

-spider-

VTech wrote:

Just wondering what your opinions are regarding the labour party and the £1.5m donation and the tax avoidance due from the donation.
Surely if they expect the layperson to steer clear of such avoidance schemes they should also be setting the same example ?
Could someone prosecuted for using a scheme now use labour party as defence, saying if they can, why cant I ?

Thought provoking at least !

Tax avoidance is legal (if immoral) tax evasion is illegal.

If someone was using a tax avoidance scheme why would they be prosecuted.

I think it is down to politicians to sort out the law.

dynamicbrick

I'd say it's the responsibility of both Parliament and HMRC to create a system which isn't shot through with loopholes, avoidances, bits missing, or brain staggering complexity.

Then we wouldn't need the such vast numbers of civil servants to administer the system, and all those independently wealthy self-employed types wouldn't be able exploit the system.

Then, once they've cleared that up, they can ask the Turkeys to vote for Christmas

rhext

I don't think that tax avoidance is immoral for the most part. Most tax breaks are put in place to encourage certain behaviours which are viewed as beneficial for society. If people then take advantage of those, it's a bit rich for the government to complain about it.

I'm not a big fan of the people who search for loopholes which are clearly against the spirit of the legislation. But in cases like Starbucks and Google, while I understand and support the government's campaign to get them to recognise profit in the UK (and therefore pay us the tax), I still hold the government accountable for the fact that they don't.

People forget that public corporations have a legal duty to maximise shareholder returns - and shareholders in this context aren't just multi-millionaires, they're people with pensions, endowment policies, certain types of savings plan etc. If the government don't do a good job of writing the laws to force them to make a fair contribution to the countries in which they operate, then it's difficult to blame the corporations for discharging their 'maximise profit' obligation. Some countries have laws which make it very difficult for corporations to export profit....don't see why we couldn't do the same.

daviesee

rhext wrote:

....Some countries have laws which make it very difficult for corporations to export profit....don't see why we couldn't do the same.

Simply put, the accountants and lawyers outside Government are better and higher rewarded, or higher rewarded so attract the best. Take your pick.

team47b

Are you suggesting that people with money should be given moral guidance, surely they can do what they like with their money and not be made to feel guilty about their financial choices, I think you said elsewhere.

Stick...stir...goad...get popcorn...

markhewitt1978

While I'm a Labour supporter, it's hypocracy of the highest order.

rhext

daviesee wrote:

rhext wrote:

....Some countries have laws which make it very difficult for corporations to export profit....don't see why we couldn't do the same.

Simply put, the accountants and lawyers outside Government are better and higher rewarded, or higher rewarded so attract the best. Take your pick.

Still a government issue though. They could start by simplifying things so that there aren't so many loopholes. And there are some obvious measures they could take to make exporting profit more difficult.

Practically speaking, however, the current practice of actually negotiating with big organisations to agree tax/investment packages seems to me to be a very practical way of doing it. I'm surprised more people don't understand that: if you can place a factory anywhere in the world then paying UK tax is effectively optional. Negotiating tax affairs becomes an integral part of a decision where to put a facility -from our point of view it's better to get part of something than all of nothing - particularly if it brings thousands of jobs (and income tax) with it. It's not quite the same for retail operations (like Starbucks and Amazon) but those are the ones that would be most easily fixed by tightening up the legal drafting around what constitute allowable and reasonable costs.

daviesee

rhext wrote:

daviesee wrote:

rhext wrote:

....Some countries have laws which make it very difficult for corporations to export profit....don't see why we couldn't do the same.

Simply put, the accountants and lawyers outside Government are better and higher rewarded, or higher rewarded so attract the best. Take your pick.

Still a government issue though. They could start by simplifying things so that there aren't so many loopholes. And there are some obvious measures they could take to make exporting profit more difficult.

Practically speaking, however, the current practice of actually negotiating with big organisations to agree tax/investment packages seems to me to be a very practical way of doing it. I'm surprised more people don't understand that: if you can place a factory anywhere in the world then paying UK tax is effectively optional. Negotiating tax affairs becomes an integral part of a decision where to put a facility -from our point of view it's better to get part of something than all of nothing - particularly if it brings thousands of jobs (and income tax) with it. It's not quite the same for retail operations (like Starbucks and Amazon) but those are the ones that would be most easily fixed by tightening up the legal drafting around what constitute allowable and reasonable costs.

Can't disagree with that.
It is still asking for turkeys to vote for Christmas though.

VTech

Making deals with corporates works well, it serves the IRS just fine and I agree with it.
I'm also aware tax avoidance is totally legal but as some suggest, in certain cases it is morally wrong so whilst an average person on a decent income (footballer, comedian, pop star etc) is ridiculed for using these solutions even though not illegal it seems to me to be unfair to then allow political parties to do the same and no one stand accountable.

spen666

Is the Labour Party forming the government? :?: :?: :?: :?:


The thread title is about the Government, but then proceeds to talk about what labour are/ have done?

VTech

spen666 wrote:

Is the Labour Party forming the government? :?: :?: :?: :?:


The thread title is about the Government, but then proceeds to talk about what labour are/ have done?

Sorry, I never for one second thought someone would not understand the meaning of this post.
Please forgive my utter ignorance of political parties within the United Kingdom, i was referring to the Labour party, a centre left party formed in the England in 1900.

For any distress caused I give my sincere apologies :oops:

rhext

VTech wrote:

Making deals with corporates works well, it serves the IRS just fine and I agree with it.
I'm also aware tax avoidance is totally legal but as some suggest, in certain cases it is morally wrong so whilst an average person on a decent income (footballer, comedian, pop star etc) is ridiculed for using these solutions even though not illegal it seems to me to be unfair to then allow political parties to do the same and no one stand accountable.

I'm not sure that average people on decent incomes are ridiculed. I dont' thiink that pop stars, comedians and footballers fall into that category though. And the ones who get ridiculed also seem to me to be the ones who either ignored the problem and hoped it would go away (which is the most charitable interpretation I can place on the standard 'never understood all those hard sums' excuse), or the ones who were tempted by a bunch of con artists into buying into a faintly plausible, but ultimately illegal scheme that got found out.

As for the labour party, I come back to my earlier point. Tax avoidance schemes are usually created by the government to encourage behaviour that they see as beneficial to society. The fact is that we need an elected government. The alternative simply doesn't bear thinking about. And if we need a government, then we also need people who are prepared to stand for election and take on the job. Which practically speaking means we need political parties who can create coherent policies and implement them as opposed to letting 600+ individual members squabble amongst each other about their own personal agendas. Parties need funding, so we either make it easy for them to obtain some (hence the tax relief), or we fund them out of general taxation. Personally I'm in favour of the latter approach, which I think would be far fairer and produce much less risk of vested interests distorting policy...but the electorate thinks differently so we're stuck with donations. And tax relief!

I'm always puzzled by this politician-bashing: sure there's a few bad eggs (take a random sample of any 600 people and you're going to get a few criminals); but as a group they get nothing but abuse for doing what at the end of the day is an essential job. How fed up do we get when all cyclists are assumed to be red-light-jumping lawbreakers just because a few of us are? If we think we're getting rubbish politicians, we need to make the job more attractive, not less! Think you can do it better, then stand yourself!

daviesee

rhext wrote:

I'm not sure that average people on decent incomes are ridiculed. I dont' thiink that pop stars, comedians and footballers fall into that category though. And the ones who get ridiculed also seem to me to be the ones who either ignored the problem and hoped it would go away (which is the most charitable interpretation I can place on the standard 'never understood all those hard sums' excuse), or the ones who were tempted by a bunch of con artists into buying into a faintly plausible, but ultimately illegal scheme that got found out.

Just curious.
The only ones caught for doing anything illegal that I can think of are Ken Dodd and Lestor Piggot.

Who has been caught recently?

VTech

rhext wrote:

VTech wrote:

Making deals with corporates works well, it serves the IRS just fine and I agree with it.
I'm also aware tax avoidance is totally legal but as some suggest, in certain cases it is morally wrong so whilst an average person on a decent income (footballer, comedian, pop star etc) is ridiculed for using these solutions even though not illegal it seems to me to be unfair to then allow political parties to do the same and no one stand accountable.

I'm not sure that average people on decent incomes are ridiculed. I dont' thiink that pop stars, comedians and footballers fall into that category though. And the ones who get ridiculed also seem to me to be the ones who either ignored the problem and hoped it would go away (which is the most charitable interpretation I can place on the standard 'never understood all those hard sums' excuse), or the ones who were tempted by a bunch of con artists into buying into a faintly plausible, but ultimately illegal scheme that got found out.

As for the labour party, I come back to my earlier point. Tax avoidance schemes are usually created by the government to encourage behaviour that they see as beneficial to society. The fact is that we need an elected government. The alternative simply doesn't bear thinking about. And if we need a government, then we also need people who are prepared to stand for election and take on the job. Which practically speaking means we need political parties who can create coherent policies and implement them as opposed to letting 600+ individual members squabble amongst each other about their own personal agendas. Parties need funding, so we either make it easy for them to obtain some (hence the tax relief), or we fund them out of general taxation. Personally I'm in favour of the latter approach, which I think would be far fairer and produce much less risk of vested interests distorting policy...but the electorate thinks differently so we're stuck with donations. And tax relief!

I'm always puzzled by this politician-bashing: sure there's a few bad eggs (take a random sample of any 600 people and you're going to get a few criminals); but as a group they get nothing but abuse for doing what at the end of the day is an essential job. How fed up do we get when all cyclists are assumed to be red-light-jumping lawbreakers just because a few of us are? If we think we're getting rubbish politicians, we need to make the job more attractive, not less! Think you can do it better, then stand yourself!

Im not knocking politicians, I just think that on the whole, we need to be transparent in the way we all act, imagine your teacher telling you at school not to smoke behind the sheds and the next thing you know they are spoking behind the sheds. How will the kids respect the people in power ?
Likewise, how will we expect tax payers to do the morally correct act when political parties are not ?

This isnt about knocking PP's, its about wishing everything was equal and the correct example was being given.

daviesee

VTech wrote:

Im not knocking politicians, I just think that on the whole, we need to be transparent in the way we all act, imagine your teacher telling you at school not to smoke behind the sheds and the next thing you know they are smoking in the staff room. How will the kids respect the people in power ? They do, and they don't.
Likewise, how will we expect tax payers to do the morally correct act when political parties are not ?

This isnt about knocking PP's, its about wishing everything was an ideal world.

FTFY.

secretsam

rhext wrote:

I don't think that tax avoidance is immoral for the most part. Most tax breaks are put in place to encourage certain behaviours which are viewed as beneficial for society. If people then take advantage of those, it's a bit rich for the government to complain about it.

I'm not a big fan of the people who search for loopholes which are clearly against the spirit of the legislation. But in cases like Starbucks and Google, while I understand and support the government's campaign to get them to recognise profit in the UK (and therefore pay us the tax), I still hold the government accountable for the fact that they don't.

People forget that public corporations have a legal duty to maximise shareholder returns - and shareholders in this context aren't just multi-millionaires, they're people with pensions, endowment policies, certain types of savings plan etc. If the government don't do a good job of writing the laws to force them to make a fair contribution to the countries in which they operate, then it's difficult to blame the corporations for discharging their 'maximise profit' obligation. Some countries have laws which make it very difficult for corporations to export profit....don't see why we couldn't do the same.

+1

secretsam

daviesee wrote:

rhext wrote:

....Some countries have laws which make it very difficult for corporations to export profit....don't see why we couldn't do the same.

Simply put, the accountants and lawyers outside Government are better and higher rewarded, or higher rewarded so attract the best. Take your pick.

True

The cream of the government's newly trained tax inspectors used to be hoovered up by the big accountants, saving on the cost of training their own...

Frank the tank

markhewitt1978 wrote:

While I'm a Labour supporter, it's hypocracy of the highest order.

I am, and yes it is.

It's one of the reasons people are losing faith in politicians/political parties.

Stevo_666

rhext wrote:

Some countries have laws which make it very difficult for corporations to export profit....don't see why we couldn't do the same.

Which countries are these and how are their rules different from ours?

solosuperia

Is it just me, aren't people just a bit hypocritical when we talk about tax reduction as opposed to avoidance
How many of the population as a whole practice some sort of ploy to reduce their tax bill.
I hold up my hand here, I transferred some of my assets to the wife to reduce the amount of tax we pay as a family.
Morally wrong or just good sense?
Isn't Margaret Hodge being a bit holier than thou when she has a go at the big conglomerates reducing tax. Isn't she a shareholder of Stemcor and her own holdings are in some sort of arrangement to reduce tax. She says it is only a small shareholding.... May be to her but to me significant, worth a few million quid!

Basically it is my belief that tax laws should be tightened up so these loopholes do not exist.
Make it black and white Legal/Illegal

Daz555

Most of us take part in some form of tax avoidance (pension scheme for example).

The problem is the extent to which it can be employed by some very wealthy individuals and corporations. Tax is not a moral issue, it is a legal one.

GiantMike

The reason MPs bang on about tax avoidance is that most people have no choice how much tax they pay because of PAYE. Therfore, it's easy to blame some people for avoiding tax, pretend to be doing something about it, while doing nothing.

Only an idiot would think that most people who have the option to legally avoid paying tax, wouldn't avoid paying tax. Paying less tax is the equivalent of a pay rise, and who would turn a pay rise down?

VTech

The issue isn't tax avoidance in the simple terms.
For example, I claim clothes, car, travel, pension, food, home office etc etc and all of this is allowed, I don't however bank outside of the UK in order to hide my foreign earnings from the British revenue, I pay tax in all income so claiming what is legal isnt the issue.

I for one expect leaders to lead, lead by example. Not hold shares abroad and bank in lower duty regions, to declare every penny of earning wherever that may be and generally be transparent.

Of course that will never happen but hey ho !

GiantMike

VTech wrote:

I don't however bank outside of the UK in order to hide my foreign earnings from the British revenue

If you did that would be tax evasion, which is illegal. If you bank abroad and declare it, there is nothing morally wrong or illegal about it.

I don't see why there should be a moral obligation to bank in the UK. No more than a moral obligation to buy British bikes rather than foreign ones.

VTech

GiantMike wrote:

VTech wrote:

I don't however bank outside of the UK in order to hide my foreign earnings from the British revenue

If you did that would be tax evasion, which is illegal. If you bank abroad and declare it, there is nothing morally wrong or illegal about it.

I don't see why there should be a moral obligation to bank in the UK. No more than a moral obligation to buy British bikes rather than foreign ones.

I can bank outside of the UK as long as I spend that money outside of the UK, as far as I am aware, the law is questioned when the money is bought into and/or spent in the UK ?
It isnt tax evasion banking abroad on earnings made abroad, it is a legal way of saving tax, I choose to declare everything and only bank in the UK. My point is that although not illegal (we are not referring to law) morals should play a part when leaders give out rules, regulations and opinions.

daviesee

VTech wrote:

I can bank outside of the UK as long as I spend that money outside of the UK, as far as I am aware, the law is questioned when the money is bought into and/or spent in the UK ?
It isnt tax evasion banking abroad on earnings made abroad, it is a legal way of saving tax, I choose to declare everything and only bank in the UK. My point is that although not illegal (we are not referring to law) morals should play a part when leaders give out rules, regulations and opinions.

Morals are subjective though. :?:

VTech

Telling someone they should t do something then doing it yourself isnt subjective.

spen666

VTech wrote:

spen666 wrote:

Is the Labour Party forming the government? :?: :?: :?: :?:


The thread title is about the Government, but then proceeds to talk about what labour are/ have done?

Sorry, I never for one second thought someone would not understand the meaning of this post.
Please forgive my utter ignorance of political parties within the United Kingdom, i was referring to the Labour party, a centre left party formed in the England in 1900.

For any distress caused I give my sincere apologies :oops:

I still think you will find that the Labour Party are not part of the government.

I'm sorry that I never thought for one second that someone would not understand which political parties form the current government.

Slate the Labour party for what they do
Slate the government for what they do

However, its a bit wrong to slate the government for the actions of a different political party