Tax Evasion

AlecR said:
Each company is taxed on their turnover: there would be no easy way to circumvent it by putting the funds elsewhere as the turnover would have to come from the UK.
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You obviously have no idea at all about how businesses work.

Company A could turnover £1million and make £900k profit (thats cash left over after everything else has been paid for)

Company B Could turnover £10million and make a profit of just £10k. How much of that £10million would you like to tax? 20%? well the business can't pay £2million it only has £10k left

Turnover means nothing. I could start a business and I guarantee I could turnover £10million+ in the first year. If enough businesses would give me credit.
I wouldn't make any money buying cars and selling them at 1/4 of the retail price but by god I'd do some turnover.
 
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anything I don't mind said:
I have no problem with the employer and employee relationship. I only have a problem with the income tax. Automatically deducting taxes from employees and forcing them to claim back money is theft. Why should an employer pay taxes on behalf of an employee? That was not the way it used to work, everyone was responsible for their own tax. They only implement that type of system so that they could generate more revenue.
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So what you're saying is the PAYE system where everyone pays the right amount of tax should be scrapped so that everyone should be free to fiddle the system?

Furthermore, whilst I don't want to patronise people, do you think your average Tesco cashier would be up to filling in a tax return every year. How many more employees do you think the HMRC would need just to process the paperwork needed for everyone manually declaring their tax, let alone the extra manpower/lawyers/money they would need to chase people who don't return anything.

I think it's unfair that rich people can make money in ways that leave them, in essence, in a position to choose how much they pay in tax; but the solution isn't to create a situation where everyone can also cheat the system. It is to try an create a nigh-on PAYE system for the rich.
 
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estebanrey said:
So what you're saying is the PAYE system where everyone pays the right amount of tax should be scrapped so that everyone should be free to fiddle the system?

Furthermore, whilst I don't want to patronise people, do you think your average Tesco cashier would be up to filling in a tax return every year. How many more employees do you think the HMRC would need just to process the paperwork needed for everyone manually declaring their tax, let alone the extra manpower/lawyers/money they would need to chase people who don't return anything.

I think it's unfair that rich people can make money in ways that leave them, in essence, in a position to choose how much they pay in tax; but the solution isn't to create a situation where everyone can also cheat the system. It is to try an create a nigh-on PAYE system for the rich.
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That is a good way to put it. If we are talking ideally, I would prefer a voluntary taxation system. It would necessitate the necessary market mechanisms that would result in better value for money. That is just a pipe dream though. Realistically if we could pay our own tax then i could also claim my bird bath as an expense.

We get another sour deal on vat. Where business pay no vat on purchasing, another great way to purchase things and avoid vat. if you are an mp and purchasing an ipad would you do it on a vat free purchase through your inc would you do it as an individual?
 
anything I don't mind said:
That is a good way to put it. If we are talking ideally, I would prefer a voluntary taxation system. It would necessitate the necessary market mechanisms that would result in better value for money. That is just a pipe dream though.
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Voluntary? No one would pay it then.

It sounds like you want almost no government and people just pay for the services they want. Sadly this wouldn't work in practice and result in hundreds of thousands of people dying through starvation and lack of healthcare.

We had that system in our history and it wasn't a great place to live unless you were born into the 1%.

anything I don't mind said:
Realistically if we could pay our own tax then i could also claim my bird bath as an expense.
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Tax allowances and MPs expenses are two different things.

anything I don't mind said:
We get another sour deal on vat. Where business pay no vat on purchasing, another great way to purchase things and avoid vat. if you are an mp and purchasing an ipad would you do it on a vat free purchase through your inc would you do it as an individual?
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Tax, in general, should only be paid once. You can't charge VAT on the materials to produce something you will then charge VAT on again.

However, I do think claiming VAT back on virtually anything you buy on your company credit card shouldn't be the case. I think there should be a requirement to prove the expense was wholly necessary to produce the goods/provide the services you sell before being able to claim it back.

For example, say a plumber buys a lap top and claims it as an 'expense' because he needs it to record his accounts, I'd say fair enough you can have that VAT free. If he then buys an iPad Air a week later and does the same I'd want to ask questions (to which he could claim the laptop broke and therein lies the problem, complexity of enforcement).
 
estebanrey said:
Voluntary? No one would pay it then.
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That is the idea!
estebanrey said:
It sounds like you want almost no government and people just pay for the services they want. Sadly this wouldn't work in practice and result in hundreds of thousands of people dying through starvation and lack of healthcare.

We had that system in our history and it wasn't a great place to live unless you were born into the 1%.



Tax allowances and MPs expenses are two different things.



Tax, in general, should only be paid once. You can't charge VAT on the materials to produce something you will then charge VAT on again.

However, I do think claiming VAT back on virtually anything you buy on your company credit card shouldn't be the case. I think there should be a requirement to prove the expense was wholly necessary to produce the goods/provide the services you sell before being able to claim it back.

For example, say a plumber buys a lap top and claims it as an 'expense' because he needs it to record his accounts, I'd say fair enough you can have that VAT free. If he then buys an iPad Air a week later and does the same I'd want to ask questions (to which he could claim the laptop broke and therein lies the problem, complexity of enforcement).
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Instead of asking for business to pay more vat why not argue the other side? that consumer should pay less vat instead? I always see people coming down on business, saying that they should pay more, instead of demanding that individuals or employees pay less.
 
The laws in this area are either not fit for purpose or too lax, that's no great surprise when you consider who it is that writes them.

Welcome to capitalism, have a nice day.
 
anything I don't mind said:
That is a good way to put it. If we are talking ideally, I would prefer a voluntary taxation system. It would necessitate the necessary market mechanisms that would result in better value for money. That is just a pipe dream though. Realistically if we could pay our own tax then i could also claim my bird bath as an expense.

We get another sour deal on vat. Where business pay no vat on purchasing, another great way to purchase things and avoid vat. if you are an mp and purchasing an ipad would you do it on a vat free purchase through your inc would you do it as an individual?
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They do pay VAT on purchases.
And unless you turnover £81k or voluntary register to charge VAT you can't claim it back
 
Jokester said:
This is for all intents what VAT is.
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Indeed, i pondered if we should have a dual vat rate, one for homegrown taxpaying companies, and one for those who non-dom to avoid paying any tax here.
It would hurt them, but only to the degree they would all relocate to norn iron after March time for a lolworthy corporate tax rate.
I assume they would use some form of supply and umbrella versioning to avoid the change in the law if one did introduce a proportional vat rate.
 
I vote they do the calculations and work out if we'd be better off pulling a Luxembourg. If we get more money by lowering tax its a win.
 
dowie said:
yup.... yet people keep on erroneously confusing the two and/or trying to paint the picture that 'avoidance' is just evasion by another name albeit with sneakier accountants. Which requires them to completely ignore all the various forms of avoidance which are explicitly allowed by the government.
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It's a bit more subtle than this. Evasion and avoidance are quasi-legal terms that don't directly relate to the basic English words.

Tax evasion is clearly illegal and you can be prosecuted for it (depending on how much you donate to the Tory party :) ).

Tax avoidance is technically legal but usually falls within the spirit, if not the letter, of tax evasion rules. HMRC does make an effort to tackle 'abusive' tax avoidance and will work with the government to close loopholes, making some forms of tax avoidance into illegal tax evasion or having them declared as such after the fact.

Tax sheltering includes vehicles such as ISAs and pensions which the government explicitly created to encourage saving and investment. Using an ISA is not tax 'avoidance' under anything but the most vague definition of the term, more properly it is 'sheltering' which is unambiguously legal.
 
The govt explicitly allows some tax avoidance, it is broad - I don't think saying that X isn't avoidance because it is more explicitly allowed works...it then becomes very debatable/blurred what is/isn't avoidance.

Does investing in woodland/farmland to avoid/minimize IHT then not become avoidance because the govt allows it?

What about investing in UK Films etc..? Plenty of avoidance comes about because the govt gives tax breaks for X.
 
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