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Politics, politics, politics

AuroRaman said:
Anyone been reading up on the Panama Papers revelations?
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Not really. I saw a headline saying "Read this you won't believe your eyes it's the most amazing revelation ever OMG you simply will not believe this OMG OMG" and then they told me that rich people hide their money in tax havens. Wow. Biiig shock.

Am I supposed to be surprised that the Icelandic PM kept his cash in a tax haven, rather than splashing it into the Icelandic cash-fund to bale out their banks?

He is not a macaron.
 
Gilzeantoscore said:
Yeah funny about this. The Tories constantly go on about increased spending and falling revenue streams, but never extend themselves to go after the billions lost to tax evasion. I wonder why? Oh I know...it's because the tax evaders are the people they represent!
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and they employ a hell of a lot of people in this country
 
Gilzeantoscore said:
Yeah funny about this. The Tories constantly go on about increased spending and falling revenue streams, but never extend themselves to go after the billions lost to tax evasion. I wonder why? Oh I know...it's because the tax evaders are the people they represent!
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How easy do you think it is to "go after" those who can afford the best lawyers and tax accountants in the world?

As the case with Google showed, most of what people think is tax evasion is actually perfectly legal tax avoidance. The proportion that is provable, actionable evasion is probably tiny.
 
I think we should all go self employed, and when we have to fill out our tax returns, write 'It's a private matter' in big red pen across the forms.
 
Bullet said:
Not really. I saw a headline saying "Read this you won't believe your eyes it's the most amazing revelation ever OMG you simply will not believe this OMG OMG" and then they told me that rich people hide their money in tax havens. Wow. Biiig shock.

Am I supposed to be surprised that the Icelandic PM kept his cash in a tax haven, rather than splashing it into the Icelandic cash-fund to bale out their banks?

He is not a macaron.
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You're right of course. Hell, when I was self-employed if I went to the cinema or purchased a DVD, I'd put it down as 'research'. My media accountant was great at finding loopholes for the most ridiculous purchases.
 
AuroRaman said:
You're right of course. Hell, when I was self-employed if I went to the cinema or purchased a DVD, I'd put it down as 'research'. My media accountant was great at finding loopholes for the most ridiculous purchases.
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Anything that could be classed as IT equipment (including an Xbox, TV, etc) was all written down in the first year. After all, as an IT consultant, 1 year old kit is worthless!

My friends ate free quite often as I was entertaining customers - not sure how receipts for lots of beer at a curry house at 3am got past.

I made quite the loss in the first year - that was before I learned about taking a salary of £8K and paying the rest in dividends.
 
scaramanga said:
Anything that could be classed as IT equipment (including an Xbox, TV, etc) was all written down in the first year. After all, as an IT consultant, 1 year old kit is worthless!

My friends ate free quite often as I was entertaining customers - not sure how receipts for lots of beer at a curry house at 3am got past.

I made quite the loss in the first year - that was before I learned about taking a salary of £8K and paying the rest in dividends.
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Hahaha! Of course, 'entertaining clients'... ;)

Erm, your last paragraph? Would love more knowledge about that!
 
AuroRaman said:
Hahaha! Of course, 'entertaining clients'... ;)

Erm, your last paragraph? Would love more knowledge about that!
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I think they've closed the loophole now (if not, it's next year), but as the dividend tax rate was so much lower than the income tax rate it meant you could save a lot in tax. Example for 2015/16:

You make £80K profit in a year as a sole trader (for the meantime, we'll ignore having a Ltd company and paying yourself a director's salary as that's the very worst option).
You would have a personal allowance of £10.6K
You'd pay NI of £4K
Income tax would be £21.4K
Your take home would be £54.6K (Taxation of £25.4K)

If you took the entire £80K as a dividend:

£80K profit
£10.6K salary (as it's tax free and paying the NI keeps you eligible for a state pension)
Total NI of £650
Gross profit for the company of around £69K
You'd pay corporation tax of £13.8K leaving a company profit of £55.2K
You pay it all as a dividend so your dividend tax is £6.7K
Your total take home is a little over £58K with a total taxation of just under £22K

It gets a little more complicated over £100K as they take your personal allowance away between there and £110K. It becomes really beneficial in the top tax bracket.
 
£9.3m on booklets attempting to convince us to vote to remain IN the EU.

Yes that's right £9.3m. What an absolute disgrace.
 
scaramanga said:
How easy do you think it is to "go after" those who can afford the best lawyers and tax accountants in the world?

As the case with Google showed, most of what people think is tax evasion is actually perfectly legal tax avoidance. The proportion that is provable, actionable evasion is probably tiny.
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Scara, you are the master of the unsubstantiated general statement. "Probably tiny' where is the evidence for this? Or is it a case of I think it, therefore it must be true? o_O
 
Gilzeantoscore said:
Scara, you are the master of the unsubstantiated general statement. "Probably tiny' where is the evidence for this? Or is it a case of I think it, therefore it must be true? o_O
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How many convictions to HMRC successfully make a year compared to the total number of people avoiding tax? I don't know what it is, but as someone who advises a fair number of people on their tax affairs I know it's tiny.

How many people did HMRC manage to successfully convict after the HSBC fallout? It was certainly less than 1% of those involved, probably more like 0.1%.

When HMRC do try and strong-arm people into a deal, how much tax do the targets pay compared to the "tabloid rate" that laymen assume they should be paying? Again, from the handful of public cases out there it seems that they manage to retrieve next to nothing - see Google, etc.

The only way of knowing for certain is to go through every person and corporation's tax returns with a few experts and a fine toothed comb, but everything I've seen points to the fact that the vast majority of tax avoidance is just that, and evasion is a tiny proportion.
 
If it's so tiny, why are so many putting money in off shore accounts? The problem of course are things like the internet and the so called global economy, i.e. Amazon paying fudge all tax. Government have to move tax law into the 21st century, but of course they don't want to because that would harm their constituency. Which was my original point. The elite can be sure that tax law will always lag.
 
Gilzeantoscore said:
Oh is that the price? They don't have to pay tax? I'm ever, ever so grateful....not!
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would you rather the jobs went elsewhere?

it's a balance, we don't have a lot to offer in this country in terms of natural resources or a motivated workforce, we need to offer incentives
 
Gilzeantoscore said:
If it's so tiny, why are so many putting money in off shore accounts?
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Avoidance, not evasion. Just like having an ISA or buying your booze at Duty Free.

Gilzeantoscore said:
The problem of course are things like the internet and the so called global economy, i.e. Amazon paying fudge all tax. Government have to move tax law into the 21st century, but of course they don't want to because that would harm their constituency. Which was my original point. The elite can be sure that tax law will always lag.
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Governments will eventually learn that, just like businesses, they will have to start to compete in the global economy.

Just as my companies have had to become efficient to compete with China and India, governments will have to realise that they need to be less profligate with our money if they are to compete in bringing in tax revenues.
 
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