Originally posted by AtW
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Previously on "Effective solution to tax evasion aka "avoidance""
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Legal loopholesOriginally posted by Incognito View PostYou don't understand. The Legislature makes the law and it is the role of the Judiciary to interpret Parliaments intentions in circumstances where there is ambiguity.
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Originally posted by Alf W View PostDispatches program a couple of weeks ago on Cabinet Ministers Wealth Management strategies - can be watched here - stick to these and you should be OK.
Gideon (aka Cameron's fag) - stands to avoid IHT on £4m via use of Family Trust Scheme.
Phillip Hammond (Transport Sec) - shifting shares to his wife / income splitting
Andrew Mitchell (Intl Devt Sec) - investing in British Virgin Islands based PIFs.
I haven't watched it all but I'll be having a lookm to make sure I'm not missing any tricks.
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Dispatches program a couple of weeks ago on Cabinet Ministers Wealth Management strategies - can be watched here - stick to these and you should be OK.
Gideon (aka Cameron's fag) - stands to avoid IHT on £4m via use of Family Trust Scheme.
Phillip Hammond (Transport Sec) - shifting shares to his wife / income splitting
Andrew Mitchell (Intl Devt Sec) - investing in British Virgin Islands based PIFs.
I haven't watched it all but I'll be having a lookm to make sure I'm not missing any tricks.
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Originally posted by shaunbhoy View PostWell if Rangers FC are anything to go by, they seem inclined to drag their heels.
Still, everything to he who waits, eh Incog?
The Rangers tax case is something to do with EBT's. Quite how that one pans out is going to be quite interesting, because I'm sure we all know a lot of contractors using EBT's as well.
Huge tax bill 'could saddle Rangers with £80m debt' - The Scotsman
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Originally posted by Incognito View PostTax avoidance is prudent, however, it seems that we now have varying levels of tax avoidance with HMRC willing to act against 'aggressive' tax avoidance. In other words, using artificial arrangements to attempt to reduce your tax burden
Still, everything to he who waits, eh Incog?
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Originally posted by Pondlife View PostNo No No!
The government should be clear about the rules. If this new coalition don't like the old rules they can change them for the future. If there is abiguity then that is their fault for not thinking it through and making the intention clear in the first place.Originally posted by Doggy Styles View PostQuite right. Gordon doubled the number of rules, and his additions are so badly drafted there are legal loopholes and lack of clarity all over the place.
Statutory interpretation - Wikipedia, the free encyclopedia
HMRC's argument in BN66 is that the Double Taxation Treaty loophole was closed off after Padmore with the legislation that was introduced. It was Parliament's intention at the time to stop people exploiting this loophole, it doesn't make a difference if you've found some clever all singing, all dancing scheme that isn't mentioned explicitly in the statute, it is still serving the purpose of circumventing the will of Parliament and that's one argument they'll lose in a UK court every time.
Originally posted by Doggy Styles View PostAnd as others have said, tax avoidance is prudent.
Tax avoidance is prudent, however, it seems that we now have varying levels of tax avoidance with HMRC willing to act against 'aggressive' tax avoidance. In other words, using artificial arrangements to attempt to reduce your tax burden and yes, IR35 was an attempt to reduce ‘aggressive’ tax avoidance.
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Originally posted by Pondlife View PostThe government should be clear about the rules. If this new coalition don't like the old rules they can change them for the future. If there is abiguity then that is their fault for not thinking it through and making the intention clear in the first place.
And as others have said, tax avoidance is prudent.
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Originally posted by Incognito View PostOh come on CM you don't believe that guff they're coming out with on the Bn66 thread do you?
All the tax return had was a scheme number on it, HMRC still had to work out how it worked. Not every taxman is a tax specialist and schemes like these are quite common and quite complex. They're designed to deceive right from the start.
As far as I've read the majority of them were told from the start that HMRC doesn't accept the scheme works. If that doesn't make you thing twice what does? The bailiff at the door?
I tell you who they should be blaming and that's their scheme provider who even if they do lose the case will still have made a tidy profit out of it.
1 - Fair enough, the tax offices in general aren't specialists but the initial tax returns were dealt with by the specialist offices so by rights these guys should have known what they were doing.
2 - To get the disclosure number, the providers had to provide a detailed explaination of how the scheme worked to the anti-avoidance unit.
3 - Nobody expected HMRC to wait as long as they did to find (make up!) a flaw with it and then to introduce retrospective legislation to close it down was just plain wrong. Have you any idea how many different arguments HMRC offered up before they finally decided on the one they are using now?
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I don't think you guys are getting it. The distinction between evasion and avoidance, and the idea that avoidance is perfectly legal and will not be pursued by HMRC, is long gone.
The "guidance" referred to is a list of "Signposts", i.e. factors in a person's tax affairs that may indicate that avoidance is taking place. Again, no mention of illegal acts, just the categorisation of these behaviours as "unacceptable".
or providing advice on how to address transactions or arrangements that HMRC may see as unacceptable tax planning
I also think they need to address the core issues of why people - when given the opportunity will opt to pay less tax. Why do people give money away to charity rather than pay it in tax? What is so abbhorant about paying more in tax than you're legally obliged to that makes so many people plan and manage their affairs so as not to?
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Originally posted by Pondlife View PostWTF is "avoidance"?
There's avoidance which is a prudent arrangement of ones affairs and there's evaision which is 2-5 years at her majesty's pleasure and probable financial ruin.
The former is perfectly legal and not morally or ethically wrong. As illustrated in the post by spaceman earlier today - if the rules are deemed to be unfair for the mass majority then the government can change them in the future and the people have the right to alter their affairs accordingly as per the new rules.
What's the problem? The rules are in place and if you break them you pay the consequences.
See HMRC:
HM Revenue & Customs Anti-Avoidance Strategy
A small minority of HM Revenue & Customs (HMRC) customers continue to engage in tax avoidance, which undermines the delivery of fair tax outcomes. We aim to persuade our customers not to attempt to engage in avoidance by:
- making tax law robust against avoidance
- engaging with our customers about our approach to avoidance
- optimising our operational response to avoidance; and
- changing the economics of avoidance to make it less attractive
so that the expected costs, difficulties and risks of attempting avoidance outweigh the expected potential gains.
Why tax avoidance is a problem for everyone
Her Majesty's Revenue & Customs (HMRC) and HM Treasury (HMT) have a shared objective of minimising the tax gap (that is, the difference between the tax collected and the tax we think ought to be collected). We want to provide our customers with a level playing field while maintaining the UK's international competitiveness. Our strategy for delivering this objective is through encouraging everyone to pay tax at the right time and vigorously tackling those who deliberately avoid their responsibilities.
In the UK the tax loss from avoidance is estimated to run into several billion pounds across both direct and indirect taxes. This directly affects the delivery of public services and long-term economic growth. Avoidance distorts markets, is economically unproductive and breaks the link between economic productivity and reward.
The vast majority of our customers do not participate in tax avoidance and will stand to benefit from HMRC's anti-avoidance strategy. HMRC is taking a proportionate, risk - based approach to avoidance, which is consistent with HMRC's commitment to supporting our customers.
What is tax avoidance?
HMRC's Anti-Avoidance Group (AAG) offers guidance about what factors indicate that tax avoidance may be occurring. It is impossible to provide a comprehensive definition of avoidance - HMRC's guidance describes the sorts of activity that HMRC may perceive as avoidance.
Based on an understanding of HMRC's guidance, our customers ought to be aware when they are undertaking activities that HMRC may regard as tax avoidance and thus taking on higher risks.
Re-read this bit too:
Her Majesty's Revenue & Customs (HMRC) and HM Treasury (HMT) have a shared objective of minimising the tax gap (that is, the difference between the tax collected and the tax we think ought to be collected).
Smell the coffee, people: they don't need you to break the law any more, the mere fact of them not receiving enough money is enough to provoke them into coming after you.
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Originally posted by AtW View PostThe whole system of accountants looking for another loophole after another is perverse - the way to stop this tulip (and it can help reduce general taxation) is to ensure that ANY half-questionable "avoidance" results in saved tax being put into escrow
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Originally posted by Pondlife View PostNo. (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.
With Bn66 the scheme providers have tried to create a crafty scheme to circumvent something the government had quite clearly legislated against at the time with Padmore. The scheme went against the spirit of the law and whilst people may seem to think if it isn't written down it's not the law, this isn't France and not all of our law is codified.
I don't think they have a leg to stand on with their case, however the PwC argument may have some merit.Last edited by Incognito; 3 November 2010, 23:51.
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It's like Al Capone complaining in court that he was not brought to justice years earlier ... I really need to get that Ze Untouchables movie on blu ray ...
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Originally posted by cailin maith View PostBollocks - when they have been given all details in the very beginning? Why should it take 7 years? And in any case 7 years for them to dream up of a reason (a not very good reason at that?!) is total bollocks.
All the tax return had was a scheme number on it, HMRC still had to work out how it worked. Not every taxman is a tax specialist and schemes like these are quite common and quite complex. They're designed to deceive right from the start.
As far as I've read the majority of them were told from the start that HMRC doesn't accept the scheme works. If that doesn't make you thing twice what does? The bailiff at the door?
I tell you who they should be blaming and that's their scheme provider who even if they do lose the case will still have made a tidy profit out of it.
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