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Frank Hovis

Tax avoidance - a moral duty?

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37 minutes ago, swissy_fit said:

I have a slight problem with the concept of tax avoidance being a moral duty. It seems a convenient way of covering selfishness to me. I've noticed that people who put forward the idea of tax avoidance being a moral duty are among the first to complain when services that are paid for with taxes are poor. 

A debate about what is fair is valid. I was enraged by IR35 when it first emerged, and never obeyed it. But if everyone behaves like all the white African contractors/businessmen I've known, or like Amazon/Apple/Starbucks/insert-name-here and contributes nothing, where will the state be? We need the state, just not like it is in the UK.

It's perfectly accurate to point out that especially since Brown taxes are being badly mis-spent on benefits and other inappropriate things but starving the state of all income is not the best response IMO. What is the best response? Probably to work towards a democracy that you can actually believe in, or leave the country, I suppose. 

 

One possibility is to join and support the Taxpayers' Alliance, which campaigns for transparency and fair taxation. In the USA there is much more awareness of 'your tax dollars at work'. In the UK there is still the idea that there is such a thing as 'public' or 'government' money when there is no such thing, it all comes from us, the taxpayer, and nothing that any taxpayer gets from the government is 'free'. 

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On ‎15‎/‎04‎/‎2018 at 14:17, Bkkandrew said:

I am doing / did my bit. In 1994 upon seeing a monthly payslip with a £4000 tax deduction, I requested to be be posted overseas and, having signed my forms, gave never been subject to U.K. taxes since.

Wow! You must have earned a huge amount that month! 

 

Being skint seems to work very well if avoiding tax is the aim. It's pretty shit though.

 

Edited by Carl Fimble
idiocy

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18 hours ago, spunko2010 said:

I don't know why more people don't just  phoenix their companies. I know someone who has been doing it for years and years and never gets caught. He just takes on loads of company debt, strikes it off and starts up another one, rinse and repeat, never pays a penny in corp tax. HMRC just don't have the manpower to investigate. 

This is a bit of a conundrum.  From what I’m seeing at the moment banks and lenders are totally obsessed with personal guarantees from directors.

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2 hours ago, Ina said:

This is a bit of a conundrum.  From what I’m seeing at the moment banks and lenders are totally obsessed with personal guarantees from directors.

Yeah I don't reckon it's that easy anymore. Just getting a business bank loan is mission impossible even if you have great credit history and a healthy business. It would take 5 minutes due diligence from the bank to see if you've started and dissolved 20 companies in the last 15 years.

Edited by gibbon

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38 minutes ago, gibbon said:

Yeah I don't reckon it's that easy anymore. Just getting a business bank loan is mission impossible even if you have great credit history and a healthy business. It would take 5 minutes due diligence from the bank to see if you've started and dissolved 20 companies in the last 15 years.

IT Contractors  of a certain type just live off the company money and crash it before any corporation tax is due, rinse and repeat, no loans required. Only known one who was caught and I think he skipped the country. It’s fraud though not just tax avoidance so penalties quite high.

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2 minutes ago, swissy_fit said:

IT Contractors  of a certain type just live off the company money and crash it before any corporation tax is due, rinse and repeat, no loans required. Only known one who was caught and I think he skipped the country. It’s fraud though not just tax avoidance so penalties quite high.

Surely you can only do that for so long before you get barred from being a director or sent to prison? IT plebs aren't part of the protected director class/won't have the right school tie, so the gov will happily throw them in jail all day.

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2 hours ago, gibbon said:

Surely you can only do that for so long before you get barred from being a director or sent to prison? IT plebs aren't part of the protected director class/won't have the right school tie, so the gov will happily throw them in jail all day.

No creditors to complain, the only loser is IR. Vat is paid, apparently not paying that is suicidal. Company never makes a profit and folds. This is true of many new  companies. Question of time and chance if the case is selected for investigation. Pretty sure they opened more than one company at the beginning and moved from one to another closing them behind them with help of pet accountants. This is a few years back now, it may have got harder.

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7 hours ago, Carl Fimble said:

Wow! You must have earned a huge amount that month! 

 

 

Yes, it was just the way that commissions and bonuses all got paid in one month, the way PAYE operates and 'poof' £4K in smoke.

Still rankles some 24 years later!

Edited by Bkkandrew
Weird autocorrect result for years, corrected by humancorrect after Carl's rep

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On 15/04/2018 at 12:59, Frank Hovis said:

Here is the graph of UK central government spending from wiki:

4723638881158cf4edb7dc157e00dd55afa42c38

https://en.wikipedia.org/wiki/Government_spending_in_the_United_Kingdom

Just look at that top line.  Most people would guess the NHS and education as big spenders but they are dwarfed by that "Social Protection" line which is off the scale.

It includes pensions but at £7k a year for those over c. 70 I think we can assume that they aren't a big part of it.

I think your assumption is wrong, pensions are a massive part of it because of the public sector final salary deals.

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9 hours ago, goldbug9999 said:

I think your assumption is wrong, pensions are a massive part of it because of the public sector final salary deals.

About a year ago came across a visual tool where it had a flow chart of all government income/expenditures where you could zoom in and out and follow the money (if someone knows what im talking about please post a link). Anyway main thing I recall is majority of tax came from PAYE and majority of expenditure was pensions. When automation comes along we're fucked.

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11 hours ago, Bkkandrew said:

Yes, it was just the way that commissions and bonuses all got paid in one month, the way PAYE operates and 'poof' £4K in smoke.

Still rankles some 24 years later!

It's hideous when that happens in bonus month, not happening to me this year I've sacrificed the lot into my pension. 

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20 minutes ago, Dipsy said:

It's hideous when that happens in bonus month, not happening to me this year I've sacrificed the lot into my pension. 

It certainly heightens the [wrong kind of] senses. MrsLTS got a mega PAYE monthly tax deduction one year with bonuses however this won’t happen to her this year as she ain’t getting one 😂

Three years of salary sacrifice into a SIPP when the child allowance claw back was introduced has addded ~£100k to her wealth through myself actively managing her portfolio on top of her £75k pension accruals to date. So she’s off to a good start. We no longer do this as she’s above the earning threshold even after maximum contributions and have quite high outgoing so can’t afford too anyway. It’s on the radar though.

Edited by longtomsilver

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On 18/04/2018 at 22:27, spunko2010 said:

I don't know why more people don't just  phoenix their companies. I know someone who has been doing it for years and years and never gets caught. He just takes on loads of company debt, strikes it off and starts up another one, rinse and repeat, never pays a penny in corp tax. HMRC just don't have the manpower to investigate. 

95& chance you will get away with it 5% chance of jail time when caught. I guess it depends if your willing to take the long tail risk with dire consequences when caught. Also I believe there is legislation coming in to transfer corp tax liabilities to directors personally when a company is voluntarily would up.

Edited by goldbug9999

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2 hours ago, goldbug9999 said:

95& chance you will get away with it 5% chance of jail time when caught. I guess it depends if your willing to take the long tail risk with dire consequences when caught. Also I believe there is legislation coming in to transfer corp tax liabilities to directors personally when a company is voluntarily would up.

Doubt it'll work, if it does they'll suddenly start using their South African passports again.

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