Pay your fair share of tax - everyone

[Ignis Fatuus]

Sod whether it's morally correct or not, WGAS about that. If it's legal it's legal. If the Govn't want to make it illegal they will make a law against what you have already done.

It's not MY responsibility to pay the maximum amount of tax I can but it is my responsibility to anticipate what the Government really wanted and obey that rather than the current law of the land.

FTFY

[hildaoblivion]

My bad - its not the 'fair rate' - its the 'proper' rate of tax as in...

“many individuals and employers in local government and in the health service do not pay their proper tax and national insurance contributions.”

according to the Public Accounts Committee.

I think it means if in doubt hand over everything to HMRC, they will calculate what you deserve back.

[Sysman]

But the public sector debate 'concerns' the principle that if the public sector is paying you, you should be paying the 'fair rate' of tax. That principle doesnt change with the size of your company.

The problem is who defines "fair rate".

If the government gives me tax concessions to make widgets or invest in an ISA then I should be able to use those concessions without being accused of not paying my "fair share".

Now apply that argument to the mass of tax laws that exist and see where you get.

[SupremeSpod]

My bad - its not the 'fair rate' - its the 'proper' rate of tax as in...

“many individuals and employers in local government and in the health service do not pay their proper tax and national insurance contributions.”

according to the Public Accounts Committee.

I think it means if in doubt hand over everything to HMRC, they will calculate what you deserve back.

Define "proper tax and national insurance contributions". When I was a contractor I paid what I had to by law.

[BlasterBates]

HMRC didn't just cave into Vodaphone there was a legal dispute which ran on for 9 years, eventually there was a settlement.

I don't see any discrimination going on here.

When HMRC say pay your proper share of tax they just mean the tax you pay which is as prescribed by law. So for example if you funnel your earnings through Jersey or Cyprus it might be legal or it might not. Now Vodaphone funneled it through Luxembourg, however they did have a business there with 200 employees, so at least part or possibly all of their earnings were legitimate, though it's pretty clear they deliberately used inflated transfer pricing to shove profits into Luxembourg. Now some contractors try to do the same by setting up some foreign company, but don't have any business or employees working there. So this is far less likely to be legitimate.

As for the managers in the NHS or whereever they were working through personal service co's, of course they were inside IR35. I'm just amazed they got away with it. Contractors are less likely to be caught by IR35.

[hildaoblivion]

Vodafone and many other corps make use of tax havens to reduce their tax bills. As do many family inheritance trusts.

Its legal - but its being done with the reason to miminise tax, its not like its a hub of operations. Its artificial if we are being honest.

So its avoidance - in the same way you can argue that the limited company route could be viewed as tax avoidance.

But while freelancers are to be blocked from public sector if they use 'avoidance' big companies are not. Im just saying its inconsistent.

I do not say avoidance is a bad thing or that use of Ltd companies is actually avoidance - I just say that if the rule is any sniff of avoidance (true or untrue) blocks small companies from public sector work the same should apply to all others.

Avoidance is legal - evasion is not. The problem we have is that we have the public sector blocking 'avoidance' for one group of 3rd parties but not others. Is that fair? Consistent?

[SupremeSpod]

Vodafone and many other corps make use of tax havens to reduce their tax bills. As do many family inheritance trusts.

Its legal - but its being done with the reason to miminise tax, its not like its a hub of operations. Its artificial if we are being honest.

So its avoidance - in the same way you can argue that the limited company route could be viewed as tax avoidance.

But while freelancers are to be blocked from public sector if they use 'avoidance' big companies are not. Im just saying its inconsistent.

I do not say avoidance is a bad thing or that use of Ltd companies is actually avoidance - I just say that if the rule is any sniff of avoidance (true or untrue) blocks small companies from public sector work the same should apply to all others.

Avoidance is legal - evasion is not. The problem we have is that we have the public sector blocking 'avoidance' for one group of 3rd parties but not others. Is that fair? Consistent?

Todays "Blinding Flash of the Bleeding Obvious" and "Teaching us to suck eggs" award goes to "hildaoblivion", btw, whose sockie is this?

[BlasterBates]

If you actually have part of your business in the tax haven i.e. you go there to an office and do some work there then you too as a contractor would be able to do this.

This is what Vodaphone did.

They didn't just setup some artificial business arrangement. However they did exagerate the amount of business they did there. This is why there was a settlement as it was much less clear than for example an individual earning money from a tax haven without settling foot there.

In other words there is no discrimination it is purely a complex case which HMRC wasn't winning.

[minestrone]

Oddly a public sector place near me has massively increased day rates.

The head got caught recently and started this nonsense.

[OwlHoot]

“No man is under the smallest obligation, moral or other, to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel in to his stores.

The Inland Revenue is not slow – and quite rightly – to take every advantage which is open to it for taxing statutes for depleting the taxpayer’s pocket. And the taxpayer is, in like manner, entitled to be astute to prevent, as far as he honestly can, the depletion of his means by the Revenue.”

Lord Clyde in Ayrshire Pullman Motor Services & Ritchie v Inland Revenue Commissioners (1929 14TC754)

“Every man is entitled, if he can, to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be.”

Lord Tomlin in Inland Revenue Commissioners v The Duke of Westminster (1936)

Tax avoidance is NOT illegal and NOT immoral, and anyone who claims otherwise can go and **** themselves with a telegraph pole!