Effective solution to tax evasion aka "avoidance"

[Pondlife]

They are not going to waste time and money trying to prove conclusively why every new scheme is illegal - that's very expensive, so what they do (very logically) is focus on schemes that became popular: as soon as tax loss reaches certain threshold they HAVE TO take some action.

It can take years to collect data on what is actual loss from particular scheme and it can take years for scheme to become popular, mainstream and that's when HMRC has to take action which may take some years also, that's how you arrive to 6-7 years.

No. (again)

So, according to your logic, if enough people signed up for ISAs and the government needed access to quick cash they could say that, for example, "actually we didn't mean tax free, we meant you didn't have to pay the tax on the growth each year but you do when you cash it in"?

Also

"I know that's not what the law stated but we're reclarifiying now and applying retrospectivley so cough up"

If the government don't like ISAs thay can cancel them for the future not tax everyone for following the rules they put in place cos they no longer like them.

[AtW]

So, according to your logic, if enough people signed up for ISAs and the government needed access to quick cash they could say that, for example, "actually we didn't mean tax free, we meant you didn't have to pay the tax on the growth each year but you do when you cash it in"?

If it's straightforward like ISA then it's ok.

Also it should be checked whether %-tage of saved tax when compared to worst case scenario (40-50% income tax for example) is greater than certain threshold then it should be deposited - when someone saved a few hundred quid a year by saving money it's not a bad thing, because the whole idea of ISAs is to encourage people to save (when cash) or prop up stock market (when shares).

[AtW]

If the government don't like ISAs thay can cancel them for the future not tax everyone for following the rules they put in place cos they no longer like them.

Yes, quiet possible if take up was bigger than they planned.

The solution is to earn more money, not to find ways to pay less tax - ideally the tax system should encourage it by taking less %-tage of tax if you earn more.

[Moscow Mule]

Once again, AtW fails to make a coherent point. Plus ça change

[Pondlife]

If it's straightforward like ISA then it's ok.

For now but ISAs ARE A TAX AVOIDANCE SCHEME

Also it should be checked whether %-tage of saved tax when compared to worst case scenario (40-50% income tax for example) is greater than certain threshold then it should be deposited - when someone saved a few hundred quid a year by saving money it's not a bad thing, because the whole idea of ISAs is to encourage people to save (when cash) or prop up stock market (when shares).

No! a certain arrangement is either avoidance OR evaision and you cannot change it from one to the other retrospectively.

It is their job to make the rules clear. After all "tax shouldn't have to be taxing."

What does it say when the chancellor has to pay someone else to work out his tax liability for him.

[AtW]

No! a certain arrangement is either avoidance OR evaision and you cannot change it from one to the other retrospectively.

You are making a classic mistakes geeks do: true or false, white or black, in more advanced models of the world there are other states such as "undetermined" or "null" if you like.

This means HMRC might neither deny nor confirm if some scheme is avoidance - it requires extra extpensive analysis and they won't commit to expense until they see size of the problem (as measured by amount of tax that was "saved").

Now if problems becomes big, public and really takes the piss (like BN66) then they'd have to deal with it - just because they refused to confirm it's legit some years ago means jack tulip - introducing element of "uncertainity" in the battlefield that makes it riskier to make such dodgy moves is pretty much the only option they have right now.

With my idea though it makes things very easy - asking to deposit for 6-7 years saved tax will be a massive deterrent - I can't see anyone with half a brain of a slug to take on BN66 "scheme" if HMRC warned it was potentially unlawful scheme and asking to deposit saved tax for 6 years whilst it determines whether it is legit or not. How many would go for it in this case? Like none. And if there are some they would have no grounds to complain that it would cause them hardship to return all that tax they did not pay and spend.

HTH

[Pondlife]

You are making a classic mistakes geeks do:

Pot, kettle

just because they refused to confirm it's legit some years ago means jack tulip - introducing element of "uncertainity" in the battlefield that makes it riskier to make such dodgy moves is pretty much the only option they have right now.

HTH

Why should the government be deliberatley introducing uncertainty into the rule of law? They make the rules and it is their job to state them clearly. It's not supposed to be a battlefield. The point of law is to define what is acceptable and what is not - it's not supposed to be there to trip you up.

[AtW]

Why should the government be deliberatley introducing uncertainty into the rule of law?

They shouldn't if they adopt, inevitably, my idea.

As things stand now though the only weapon HMRC has got is to use FUD - Fear Uncertainly Doubt by striking down schemes after few years of running in order to deter new schemes.

Clear rules would be nice, but they can't be devised with tax system full of exceptions - if there was single income tax regardless if where money is made, how they are made etc - just pay X% on your worldwide income (if you are British citizen) or go to jail, then it would be very clear.

[Pondlife]

Clear rules would be nice, but they can't be devised with tax system full of exceptions - if there was single income tax regardless if where money is made, how they are made etc - just pay X% on your worldwide income (if you are British citizen) or go to jail, then it would be very clear.

So if I don't live in the UK, don't use any UK infrastructure and haven't done since (for example) my parents moved away when I was two years old I should pay UK taxes or spend time in a UK jail... Genius.

[AtW]

So if I don't live in the UK, don't use any UK infrastructure and haven't done since (for example) my parents moved away when I was two years old I should pay UK taxes or spend time in a UK jail... Genius.

Worked well enough for USA - if you are a US citizen then you pay US taxes (some reasonable double taxation treaties will be in effect).

They've done Capone for tax evasion, do you think you are tougher than him?