Tax evaders cost country more than benefits

[taxman]

That's what HMRC usually ask too.

 

Like I've said before, if people paid what they owed without prompting you wouldn't need HMRC... and you wouldn't be so distraught and angry at HMRC's existence.

[L00b]

I'd suggest it was far more difficult for someone on minimum wage to avoid their PAYE tax or National Insurance liabilities by engaging in avoidance activities than someone who could afford the services of an accountant to advise them on e.g. Forex matching abuse, platinum sponge payments or FURBS.

It's a question of scale, taxman. The bigger the liability, the more resources thrown at the avoidance. The principle stands - nothing prevents a minimum wage earner from educating themselves about tax laws and practice, if they cannot afford an accountant. Especially in t'Interweb days

 

That said, considering the sheer scale tax legislation has reached in most western countries, including the UK, I can see how daunting a prospect that looks.

 

Which is why, incidentally, I1L2T3's earlier post needs a small adjustment (in red below) to reflect the reality of tax advice services/professionals in UK (as well as France, Belgium, Ireland and a few others I know well):

 

<...>

It works like this:

1. An ex-HMRC employee turned tax adviser/accountant dreams up a tax avoidance scheme

2. They put it into operation

3. Within days of putting it into operation that have to register it with HMRC compliance

<...>

[Tony]

I'm not distraught and angry at how utterly useless the HMRC are, I just think that 2,000 civil servants would be better utilised in finding ways of reducing the need for taking tax, not looking down the back of the sofa to support state profligacy.

[I1L2T3]

It's a question of scale, taxman. The bigger the liability, the more resources thrown at the avoidance. The principle stands - nothing prevents a minimum wage earner from educating themselves about tax laws and practice, if they cannot afford an accountant. Especially in t'Interweb days

 

That said, considering the sheer scale tax legislation has reached in most western countries, including the UK, I can see how daunting a prospect that looks.

 

Which is why, incidentally, I1L2T3's earlier post needs a small adjustment (in red below) to reflect the reality of tax advice services/professionals in UK (as well as France, Belgium, Ireland and a few others I know well):

 

 

I don't doubt it for one minute

[speedbirdone]

That's not tax avoidance. Tax avoidance is when a liability is avoided.

 

You are confused. They were liable to pay the tax, but avoided doing so.

 

Completely different to, for example, putting money into an ISA. When I put money into an ISA I am not avoiding a tax liability.

 

If I was to engage a firm of acountants to come up with some bizarre scheme to avoid my PAYE tax liabilities then I would be guilty of tax avoidance.

 

Yeah I'll admit I maybe getting things mixed up, I'm just an interested spectator and know very little about the inner workings of the tax system.

[I1L2T3]

Yeah I'll admit I maybe getting things mixed up, I'm just an interested spectator and know very little about the inner workings of the tax system.

 

To be fair there are certain vested interests who want the public to be confused about this.

 

If they can get one of the little people to argue their case using examples like ISAs then those little people are doing a job for them. The ISA is a great example because as a tax reducing vehicle it really is ****-poor. You are avoiding tax on say 3% of what for most people is a small savings sum. It's a sweetener, nothing more, to get people to increase their savings. But people will quite happily class it with avoidance schemes that can help people avoid say £20k annually.

 

I even saw this argument taken to an extreme recently when somebody argued that if you selected orange juice from concentrate (VAT free) instead of freshly squeezed orange juice (VAT payable) you were making that choice to avoid tax. Nope, you are making that choice primarily because you want a drink of orange juice and you will likely pick the cheapest, unless you're feeling a bit posh. Basic economics - choices are primarily price-driven not tax-driven. And these simple example like ISAs and orange juice cannot be used to justify the avoidance of tens of thousands of pounds in tax by high earners, and of course by extension their failure to play their part in society by meeting their tax liabilities.

[Guest sibon]

I'm not distraught and angry at how utterly useless the HMRC are, I just think that 2,000 civil servants would be better utilised in finding ways of reducing the need for taking tax, not looking down the back of the sofa to support state profligacy.

 

We could replace them with police and prison officers. Then, with a little tweaking of the law, we could put all the wealthy spongers where most of us believe that they belong:)

[studentbob]

Seeing as no one can agree on how much of the potential tax take is lost, why not nationalise the accountancy proffession so everyone has to play by the same rules?

Then we will see how much tax has been avoided.

[Mr Bojangles]

We could replace them with police and prison officers. Then, with a little tweaking of the law, we could put all the wealthy spongers where most of us believe that they belong:)

That's an interesting term - 'wealthy sponger'.

 

How does even the most cunning tax-avoider among them sponge, when he or she generates their own income, not to mention probably employment for others as well?

[cloudybay]

It was stated that tax avoidance by top earners cost the country more money than is paid out in benefits.

 

 

Shame really that more than 40% of our GDP is paid out to those whom do indeed avoid tax simply because they choose to scrounge or pay little.