Top 1% of earners pay 30% of all income tax

[I1L2T3]

Could be, I dunno.

 

That's why I put it up for discussion.

 

It's possible that tax avoidance is rife amongst top 1% but even despite that the proportion of income tax they pay has increased?

 

If that were the case there is a very serious problem.

[Nagel]

Tax evasion is practised by anyone who thinks they can get away with it, cash in hand and all that, so not just the rich.

[I1L2T3]

Tax evasion is practised by anyone who thinks they can get away with it, cash in hand and all that, so not just the rich.

 

I'm talking about avoidance using legal mechanisms. Do we have any figures for tax paid as a percentage of declared income?

[Mecky]

Tax evasion is practised by anyone who thinks they can get away with it, cash in hand and all that, so not just the rich.

 

I'm not so sure that's the case. Maybe they do it with the premise they are going to get caught sooner or later

[L00b]

I'm talking about avoidance using legal mechanisms. Do we have any figures for tax paid as a percentage of declared income?

If you want to go into it to that extent, you're going to need significantly more info than just this stat, as not all income types are taxed at a same uniform rate, if even taxed at all.

 

Moreover, we can't be discussing avoidance by individuals in isolation of companies, which are likely to practice avoidance to a much larger extent.

 

I've lost track of how many (local) client companies I have, which all seem to have/belong/be linked with one or a few Virgin Island (and the like) offshore companies as part and parcel of their corporate structure. I'd go as far as to say it seems to be a very generalised practice, even at the SME level. And I'm talking Sheffield, not London.

[JR hartley]

Tax evasion is practised by anyone who thinks they can get away with it, cash in hand and all that, so not just the rich.

 

yes i have always thought that, its just the way the evasion is done that different, the working class man or middle class come to that.

tradesman, gardener, mechanic computer boffin etc will always do cash jobs on the side no receipt, no vat, no tax? the rich do it by avoiding cap gains, inheritance, undervalued property deals overvalued property deals etc

So i guess we are all the same really.... greedy???

[BoroB]

As Moira Stewart tells us on behalf of the tax office 'Tax doesn't have to be taxing'.

 

That's why UK tax legislation runs to over ten thousand pages (11,520 in 2011), probably a lot more added since.

 

Thousands of people drawing up the legislation, thousands of accountants ensuring individuals/companies comply with the legislation, thousands more accountants and lawyers trying to find loopholes in the legislation, thousands of civil servants checking returns made by individuals and companies and then the aforementioned accountants checking what the tax office has done.

 

Yeah, tax doesn't have to be taxing but it is.

[Obelix]

Mmm ok, try this for a non hypothetical case...

 

As a Scout leader I journey to my meeting places by car, sometimes picking up scouts/leaders that need a lift, sometimes not. Average mileage each way is about 15 miles.

 

Now I can claim that as an expense against the Group funds for my travel costs. No one ever does as far as I know because volunteers tend not to do that.

 

So, say I claim the monies (which would be about half of the groups income) and then donate it back to the Group. No money appears to change hands. But the Group can claim gift aid on the donation, and I can claim tax relief on the higher rate component. Free money for both parties.

 

So.... tax evasion, avoidance, or prudent tax planning?

[truman]

Mmm ok, try this for a non hypothetical case...

 

As a Scout leader I journey to my meeting places by car, sometimes picking up scouts/leaders that need a lift, sometimes not. Average mileage each way is about 15 miles.

 

Now I can claim that as an expense against the Group funds for my travel costs. No one ever does as far as I know because volunteers tend not to do that.

 

So, say I claim the monies (which would be about half of the groups income) and then donate it back to the Group. No money appears to change hands. But the Group can claim gift aid on the donation, and I can claim tax relief on the higher rate component. Free money for both parties.

 

So.... tax evasion, avoidance, or prudent tax planning?

 

I'd go for the third one...prudent planning...you've made the best out of the money that you've obviously spent on fuel..

[I1L2T3]

If you want to go into it to that extent, you're going to need significantly more info than just this stat, as not all income types are taxed at a same uniform rate, if even taxed at all.

 

Moreover, we can't be discussing avoidance by individuals in isolation of companies, which are likely to practice avoidance to a much larger extent.

 

I've lost track of how many (local) client companies I have, which all seem to have/belong/be linked with one or a few Virgin Island (and the like) offshore companies as part and parcel of their corporate structure. I'd go as far as to say it seems to be a very generalised practice, even at the SME level. And I'm talking Sheffield, not London.

 

I'm talking about income tax specifically.

 

I know it's a very simple question with a hard to determine answer. The point I'm making however is that if the proportion of income tax paid has increased in step with tax avoidance measures at least maintained at similar levels then it is indicative of a rapidly widening income gap. The more I think about it the more I think it is potentially a really scary economic measure. Let's face it, it is highly unlikely that the 99% are deploying more tax avoidance measures and/or the 1% less.