Socialist tax efficiency

[TestMangler]

Labour chap on the radio yesterday says that the ISA argument is invalid, ISAs aren't tax avoidance because tax isn't charged on them.

Which is exactly the reason people buy them, to avoid tax on their savings interest.

[Zero Liability]

Labour chap on the radio yesterday says that the ISA argument is invalid, ISAs aren't tax avoidance because tax isn't charged on them.

Sounds like a real genius.

Which is exactly the reason people buy them, to avoid tax on their savings interest.

Yeah, not to mention CGT on investments... someone should send him this. Not that most Labour politicians can read.

[eek]

Sounds like a real genius.



Yeah, not to mention CGT on investments... someone should send him this. Not that most Labour politicians can read.

No they can read but only once its filtered through their rose tinted lenses...

[vwdan]

In all fairness, the scope of the grey area is huge. I do really hate the attempt to conflate evasion and avoidance but does anyone truly think that putting your savings in an ISA or pension (I.e., Using a government backed product exactly as designed) is the same as using some complicated scheme concocted by an accountant to 'reduce your tax liability'.

I find the attitude here quite curious given how harsh the forum is on anyone even considering something along the lines of the latter.

[mudskipper]

In all fairness, the scope of the grey area is huge. I do really hate the attempt to conflate evasion and avoidance but does anyone truly think that putting your savings in an ISA or pension (I.e., Using a government backed product exactly as designed) is the same as using some complicated scheme concocted by an accountant to 'reduce your tax liability'.

I find the attitude here quite curious given how harsh the forum is on anyone even considering something along the lines of the latter.

See bottom paragraph:

https://www.gov.uk/government/polici...-and-avoidance

"Tax avoidance is bending the rules of the tax system to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no purpose other than to produce a tax advantage. It involves operating within the letter – but not the spirit – of the law. Tax evasion is when people or businesses deliberately do not pay the taxes that they owe and it is illegal."

So ISAs etc are not tax avoidance according to this definition.

[centurian]

If Labour are smart, they would really start pushing hard on the "ISAs/pensions are tax planning, not tax avoidance" line.

For a start, there is no clear definition, but it doesn't matter anyway, because they know most of the population would be inclined to agree with that line - and if you keep repeating something enough, people believe it.

* Tory NHS cuts over the past 30 years
* Interest rates were 15% under the Tories

Both of the above statements are wrong, yet almost everyone believe they are true, mostly because they have been repeated so often.

[SpontaneousOrder]

See bottom paragraph:

https://www.gov.uk/government/polici...-and-avoidance

The vast majority of UK individuals and businesses pay the tax that is due. However, there is a small minority who don’t.

This imposes an unfair burden on the honest majority

Interesting. Makes it sound like 'fair' is something other than the whim of the politicians making up random bulltulip rules during their appointments.

[Zero Liability]

No they can read but only once its filtered through their rose tinted lenses...

I'd like to say GIGO but it isn't the input side that's the problem...

[Zero Liability]

In all fairness, the scope of the grey area is huge. I do really hate the attempt to conflate evasion and avoidance but does anyone truly think that putting your savings in an ISA or pension (I.e., Using a government backed product exactly as designed) is the same as using some complicated scheme concocted by an accountant to 'reduce your tax liability'.

I find the attitude here quite curious given how harsh the forum is on anyone even considering something along the lines of the latter.

I think many on here are harsh on it because it is imprudent and bound to lead the individual to trouble, i.e. tough love approach. These schemes are often built off unrealisable "guarantees" and false promises. I have no real moral issue with these attempts as it's the government's problem if it has drafted the system in a way that it is so thoroughly complex that court involvement is necessary to this degree, and ultimately it isn't particularly moral as an agent, given its predilection to spend first then force us to cough up the bill for it. Certainly, it should not get to apply retrospection, either.

I also think it's a slippery slope, because how many who are clueless of all this view LTD co contractors outside IR35 in just the same way? I would say sacrificing employment rights to the extent we do virtually requires it to be done on a B2B basis, no matter what the other particulars of the arrangement are, plucked as they are out of the archaic realm of employment law. Some contractors may think expressing indignance at such schemes distances them from the taint associated with these schemes, but in HMRC's books, we're all not paying as much as they'd like, it's only that they have to deal with the inconvenience called the government's own laws in order to try and do anything about it, which forces them to actually argue their case in a court rather than just demand the money in their usual peremptory style.

You will get multiple definitions of tax avoidance, I guess they are trying to distance it from tax planning, but really, an ISA or a pension is simply tax avoidance the government approves of for its own ends, e.g. ensuring support from certain quarters in the country to allow it to enact its plans, get re-elected, shower politicians with favours... etc. There is nothing more to it than that.

So, on a prudential level, I agree that it is important to avoid these schemes, particularly since the government itself often doesn't play by the rules, but I'm not going to stoop to the level of saying there is some sort of moral justice in seeing it drag these individuals through the court, because the complexity of its own schemes backfired on it.

[centurian]

but really, an ISA or a pension is simply tax avoidance the government approves of for its own ends

Which I think is exactly what the definition of tax planning is - using the law in the way it was intended. Tax avoidance is using the law in ways parliament did not intend.

But even if this definition is accepted - is using a deed of variation to redefine a will to reduce inheritance tax, or the use of offshore trusts to also reduce inheritance tax - is that really what parliament intended.