Jimmy Carr, tax avoidance, and morality

[I1L2T3]

eh?

 

all i am saying is even if its just "registered" & nobody is saying anyone approves it!!! it will have been looked at and either acted upon there and then or left for a later date, i doubt any scheme is "approved" by HMRC...well maybe ISA s, the schemes we are talking about are within the law.......until such time as the revenue says otherwise or "necessarily so"!

 

Nope, it doesn't meant it will have been looked into in any depth. You're making the same mistake many people make.

 

ISAs are not tax avoidance schemes that need to be registered in the same was as K2. They're quite different. ISAs are the result of a deliberate piece of legislation to enable them, rather than existing because existing legislation is too weak to prevent them . It's not even a subtle difference. It's a massive difference.

[carosio]

eh?

 

I'm just telling it like it is. Any good accountant will tell you that because a scheme is registed with HMRC does not mean it is approved by HMRC. A lot of people who get into these schemes fall into the trap of believing that the registration number for the scheme means that HMRC is happy with the scheme. It ain't necessarily so.

 

That may be true, but I assume they accepted his tax return, examined it, then confirmed with his accountant that the final amount was correct (or not) and were happy with it; if anything had been hidden then that would of course been evasion but he is not suspected of that.

[I1L2T3]

A rich politician and the tax systems are already complicated and easy to fiddle, this wouldn’t be any more complicated than the various systems we have now and would much more difficult to fiddle.

 

You didn't answer the question. How would the judgments be made on what was a poor person's product or service?

 

It's a nuts idea. Would you like to be told what you should and shouldn't be able to buy?

[MrSmith]

You didn't answer the question. How would the judgments be made on what was a poor person's product or service?

 

It's a nuts idea. Would you like to be told what you should and shouldn't be able to buy?

 

Ups I thought you meant who, it would be made the same as it is now, essential items are the things everyone needs and for the most part are zero VAT. So a poor person spending 100%of their income on essential items would pay zero Tax and a rich person spending most of their money on luxury items would pay significantly more tax than Zero.

[I1L2T3]

That may be true, but I assume they accepted his tax return, examined it, then confirmed with his accountant that the final amount was correct (or not) and were happy with it; if anything had been hidden then that would of course been evasion but he is not suspected of that.

 

The tax return has to state the registration Id of any avoidance schemes used. HMRC has one year after the end of the tax year the return is filed to challenge the use of any schemes. For example, you file a return for 2008/9 where you started using a scheme. The latest the return could be filed is January 2010. HMRC have until January 2011 to challenge your gains from the scheme. In theory you could have been in the scheme from April 2008 and it could be January 2011 before your use of the scheme is challenged. The tax return for 2008/9 may be accepted but it could still be legally challenged by HMRC for up to one year after.

[green]

As I understand it News International doesn't pay a penny in tax in the UK and never has despite it's millions in turnover and profits. Politicians have always been too gutless to take them on and make them pay for fear of what Murdoch might do to them.

 

Blair also changed the rules on TV holdings, so that they no longer had to be owned by a UK business/person.

 

Short-sightedness or corruption?

[I1L2T3]

Ups I thought you meant who, it would be made the same as it is now, essential items are the things everyone needs and for the most part are zero VAT. So a poor person spending 100%of their income on essential items would pay zero Tax and a rich person spending most of their money on luxury items would pay significantly more tax than Zero.

 

Sorry about that. I didn't word the question very well at all.

 

The issue is that the items the poor person buys would be mostly essentials. But wealthy people need essentials too so they would benefit from the low rates as well. That is why I was wondering whether you would have to VAT-rate products within every conceivable type of product.

 

For example, Tesco value tea bags would have no VAT whereas a more upmarket tea brand would have VAT. Maybe this would extend it everything - vegetables, meat etc... to make sure that more well off people paid more VAT, to make the system progressive. I'm not sure how you would make the decisions about what rates were used for what product. It might boil down to value judgements (bad) and it might even cause problems for businesses who might argue their sales were damaged by their goods being wrongly placed into higher bands.

[MrSmith]

Sorry about that. I didn't word the question very well at all.

 

The issue is that the items the poor person buys would be mostly essentials. But wealthy people need essentials too so they would benefit from the low rates as well. That is why I was wondering whether you would have to VAT-rate products within every conceivable type of product.

 

For example, Tesco value tea bags would have no VAT whereas a more upmarket tea brand would have VAT. Maybe this would extend it everything - vegetables, meat etc... to make sure that more well off people paid more VAT, to make the system progressive. I'm not sure how you would make the decisions about what rates were used for what product. It might boil down to value judgements (bad) and it might even cause problems for businesses who might argue their sales were damaged by good being placed into higher bands.

 

But they would spend an insignificant portion of the income on essentials, they tend to spend more money on fast cars and boats than they spend on tea bags.

 

So if 1% of their income is spent on essentials at zero VAT and the rest is spent on luxury item it higher levels of VAT they will pay an higher percentage of their income on tax than the poor, they would also find it much more difficult to avoid.

[I1L2T3]

But they would spend an insignificant portion of the income on essentials, they tend to spend more money on fast cars and boats than they spend on tea bags.

 

So if 1% of their income is spent on essentials at zero VAT and the rest is spent on luxury item it higher levels of VAT they will pay an higher percentage of their income on tax than the poor, they would also find it much more difficult to avoid.

 

It would boil down to what was meant by essentials. Housing, house repairs, travel, food, energy etc...?

 

Taking house repairs as an example, it would of course greatly benefit people on low wages if they could avoid VAT but should a wealthy person be able to avoid that too. This sort of thing is why I was concerned there would be one rule for one and one rule for another, perhaps even when buying the same products. I'm not sure punative VAT on yachts and nice cars etc.. alone would bring in enough tax.

[MrSmith]

It would boil down to what was meant by essentials. Housing, house repairs, travel, food, energy etc...?

 

Taking house repairs as an example, it would of course greatly benefit people on low wages if they could avoid VAT but should a wealthy person be able to avoid that too. This sort of thing is why I was concerned there would be one rule for one and one rule for another, perhaps even when buying the same products. I'm not sure punative VAT on yachts and nice cars etc.. alone would bring in enough tax.

 

Housing, stamp duty increases the more expensive the house and is zero rated for the cheapest houses and could be increased too much higher levels for more expensive houses.

 

House repairs as they are now but higher for high value home improvements.

 

Food represents an high percentage of a poor persons spend and a significantly lower percentage of a rich persons spend, so whatever you do it won’t make much difference, I leave it as it is, maybe a little tweaking to make sure caviar isn’t zero rated.

 

Travel, the wealthier you are the more you travel so the more tax you pay, public transport keep it zero rated, increase it for air travel.

 

Energy keep it the same, the more you use to more tax you pay.