Talk Morgan Forums Community The Malvern Arms Tax dodging

"But as for "tax avoidance = tax doidging" then we all do it. Hands up the forum member whose pension is not in a tax free fund - after all we could save for our retirement without using tax free pension funds. Hands up the member who doesnt have an ISA - certainly you can save in a taxed savings account. Hands up the member who doesnt claim his personal tax allowance.

All these are tax avoidance measures but our attitude to them is different"

I don't accept that as a valid argument. The government chooses not to charge tax on those things. There's no avoidance involved.It does not entail the person paying someone to come up with a legalistic, circuitous route to avoid paying what is demanded, i.e. a tax on income. When you decide to take income from your pension younpay tax on it.
Seems entirely different to me both philosophically and legally.
Nick

Don't pay me pay my company, is exactly how Ryanair has been paying most of its crews for years. How they get around the PAYE I have no idea but despite efforts from BALPA the revenue don't seem to want to go there. This arrangement does not benefit the crews as they have no real defined base and have to buy their uniforms pay for type ratings etc etc.

It’s a comment I’ve made on other forums when the question of tax dodging comes up. There are always one or two out there who are whiter than white and that delights me. I do speak from a wealth of experience so let’s agree on “some” rather than “all”. When I was a company director I was taxed under PAYE so I never had the opportunity to make fraudulent claims. If I had been in such a position the temptation would have been there and until it’s dangled before you it’s difficult to say how you would have reacted. I have been offered “bribes” by suppliers on rare occasions but I didn’t accept them probably because I was wary of being found out!

Quite @BobtheTrain.

I'm self-employed. My employer & I go to extreme lengths to define a contract that HMRC are satisfied produces the correct amount of tax. I neither have tax-sheltering offshore investments, nor a jet registered in the IoM. My company pays me, and its taxes, onshore.

Meanwhile, the facts on what HMRC collect and are defrauded out of by individuals are here: They're closing the tax gap.

Will

In that case why do you go through the artificial system of having your pay via a company and not simply become a direct employee. I was always under the impression that people gained tax / nic advantages being paid this way.

Do you not have a pension plan of some sort? If you do, you might be surprised by how many of the funds in it are sheltered by off shore locations. Often its Ireland which is just as much of a tax haven as Guernsey. I should add that I too have such investments. I just dont kid myself that they arent in a tax shelter.

I'm another conscientious self-employed tax payer. I'm perfectly happy to pay all the taxes I should. There's no need to do anything questionable, it's perfectly possible to make a good living without indulging in clever schemes.

In my case, I have to run a VAT-registered company as that's what my clients require, and I'm an employee of it. It used to be the case that one could minimise one's PAYE income and take dividends from the company to reduce total tax, but in the last couple of years HMRC have closed that loophole.

I pay both Employer's and Employee's NIC, I pay PAYE Income tax, 20% Corporation tax on the profits and 35 % or so on dividends.

If one doesn't take money out of the company in dividend or salary, it can remain in the company account until you close it down, then you are entitled to claim entrepreneur's relief on the Capital Gain and pay 10% tax rather than full CGT. This last is about the only real advantage of being self-employed these days.

This whole panto is insurmountable. Greed runs in the background and its a human condition. The Barclay Brothers are about 85 and billionaires. But their only allegiance is to themselves, and they were quite comfortable trying to screw the Treasury for huge sums. The worrying thing is that they won at every stage up to the Supreme Court.

Shareholders and investors want to see profit. The currency and futures speculators want profit. Company directors want profit and so on. Few care about the wider impact, and that's just how it is. I'm cynical because I've spent my whole career in the thick of it, and the more complex it gets, the more wide reaching it gets, and there's big money to be made by those selling schemes.

It’s amazing that a lot of people who fiddle their tax need to brag about it; especially in the pub. It gives them an auro of cleverness to show what they can get away with. The Tax Inspectorate are well aware of such bravado and many a dodger has been caught from an overheard conversation. There are things going on behind the scenes of which we know nothing. The Revenue will never stop fraud completely it but it does act as a warning to others.

I wish we had that in France.