[interestrateripoff]

http://www.telegraph...-of-crisis.html

Quote

The size of the so-called “VAT gap” due to fraud, the difference between the amount of tax HMRC expects to receive and what it actually collects, is reckoned to have reached £3.3bn, or enough to fund a 1p reduction in the tax of every UK taxpayer.

VAT evasion has become one of the biggest costs to the exchequer and is largely due to HMRC being “significantly under-resourced”, according to BDO’s 'FraudTrack’ report.

It is estimated that about half of the fraud is down to professional fraudsters, while the rest is the result of general non-compliance and deliberate evasion by legitimate businesses.

Avoiding tax could be the difference between staying in business and going out of it, plus when you have big multinationals avoiding taxes why should people play by the rules.

[BNS]

Gerald Clelente nailed this one.

He said at some point individuals see that those who are supposed to set an example to us are corrupt, and the ordinary man on the street thinks, well if he can be corrupt and get away with it, why should I play by those rules which they are unbound by?

At which they too avoid/dodge taxes.

Or go on tax strike.Government suppression funds dry up. So the government puts taxes up which causes government suppression funds to dry up even more.

Wifey is closing down her shop. Lucky for her the lease is up for renewal in February (with a serious rent increase). Thats the last chunk of corporation tax, VAT, business rates and the government will see from her for quite some time. Though I'm not too sure she'll be happy working for somebody else in the job she's got lined up.

[montesquieu]

interestrateripoff, on 07 January 2013 - 09:58 AM, said:

http://www.telegraph...-of-crisis.html



Avoiding tax could be the difference between staying in business and going out of it, plus when you have big multinationals avoiding taxes why should people play by the rules.

Sister works for HMRC. Numbers have been slaughtered progressively starting in the Broon as chancellor era. She used to work in complicance, compliance officer numbers were slashed she now works in Tax Credits, the only growth area of this sorry mess.

Combination of venal, ignorant politicians and useless senior civil servants has us heading the way of Greece and Italy where the tax take is a fraction of what it ought to be.

[byron78]

Whacking VAT up to 20% wasn't very bright.

[koala_bear]

interestrateripoff, on 07 January 2013 - 09:58 AM, said:

http://www.telegraph...-of-crisis.html



Avoiding tax could be the difference between staying in business and going out of it, plus when you have big multinationals avoiding taxes why should people play by the rules.

Probably includes plenty of firms going bust while not having paid the VAT bill (i.e. comet with nearly £30m outstanding VAT and PAYE owing).
Comet is effectively 0.6% of total.

[fluffy666]

montesquieu, on 07 January 2013 - 10:25 AM, said:

Sister works for HMRC. Numbers have been slaughtered progressively starting in the Broon as chancellor era. She used to work in complicance, compliance officer numbers were slashed she now works in Tax Credits, the only growth area of this sorry mess.

Combination of venal, ignorant politicians and useless senior civil servants has us heading the way of Greece and Italy where the tax take is a fraction of what it ought to be.

Slashing HMRC numbers has got to be THE most expensive way of saving money* ever devised...

Cutting numbers of tax inspectors has a double-whammy; not only do you lose revenue from inspections, you lose revenue from people who fear inspections..


*From a government revenues POV, of course. There is probably a 'Laffer-curve' style relationship between 'Number of inspectors' and 'Net Revenue', but we are very much on the left hand side of the curve..

[RufflesTheGuineaPig]

fluffy666, on 07 January 2013 - 11:34 AM, said:

Slashing HMRC numbers has got to be THE most expensive way of saving money* ever devised...

Cutting numbers of tax inspectors has a double-whammy; not only do you lose revenue from inspections, you lose revenue from people who fear inspections..


*From a government revenues POV, of course. There is probably a 'Laffer-curve' style relationship between 'Number of inspectors' and 'Net Revenue', but we are very much on the left hand side of the curve..

You could have 100x the number of tax inspectors and still be financially better off for each one added.

They don't, on the scale of things, need to collect very much in tax to cover their wages.

[Gone baby gone]

RufflesTheGuineaPig, on 07 January 2013 - 11:53 AM, said:

They don't, on the scale of things, need to collect very much in tax to cover their wages.

It's covering their pensions that worries me...

[winkie]

BNS, on 07 January 2013 - 10:05 AM, said:

Gerald Clelente nailed this one.

He said at some point individuals see that those who are supposed to set an example to us are corrupt, and the ordinary man on the street thinks, well if he can be corrupt and get away with it, why should I play by those rules which they are unbound by?

At which they too avoid/dodge taxes.

Or go on tax strike.Government suppression funds dry up. So the government puts taxes up which causes government suppression funds to dry up even more.

Wifey is closing down her shop. Lucky for her the lease is up for renewal in February (with a serious rent increase). Thats the last chunk of corporation tax, VAT, business rates and the government will see from her for quite some time. Though I'm not too sure she'll be happy working for somebody else in the job she's got lined up.

Speaking to someone last week, they have had a small shop in town for many years, they said they will not be renewing the lease when it runs out.

[HPC001]

Who didn't see this coming? Increasing taxes in the middle of a depression is utter lunacy, and I don't blame the people struggling to get by for avoiding them. VAT is not means-tested, neither is the local business rate charged by councils.

[marlint]

HPC001, on 07 January 2013 - 12:05 PM, said:

Who didn't see this coming? Increasing taxes in the middle of a depression is utter lunacy, and I don't blame the people struggling to get by for avoiding them. VAT is not means-tested, neither is the local business rate charged by councils.

VAT may also not be means tested- but you can reclaim it on inputs, so if you're making lots of money you pay more than if you're barely breaking even.

[EUBanana]

BNS, on 07 January 2013 - 10:05 AM, said:

Gerald Clelente nailed this one.

He said at some point individuals see that those who are supposed to set an example to us are corrupt, and the ordinary man on the street thinks, well if he can be corrupt and get away with it, why should I play by those rules which they are unbound by?

At which they too avoid/dodge taxes.

Or go on tax strike.

Pretty much. If I could evade tax I would, unfortunately I'm PAYE so not much chance of that.

I certainly don't feel indignant about the other commoners who do do it though. If a plumber wants cash in hand, fine by me.

[HPC001]

marlint, on 07 January 2013 - 12:12 PM, said:

VAT may also not be means tested- but you can reclaim it on inputs, so if you're making lots of money you pay more than if you're barely breaking even.

I do realise that, my VAT comment was more directed at consumers (and thus indirectly, businesses seeing lower sales). If you want a better example RE: business, how about fuel duty.

[billybong]

Quote

VAT evasion has become one of the biggest costs to the exchequer and is largely due to HMRC being “significantly under-resourced”, according to BDO’s 'FraudTrack’ report.

It's peanuts compared to the bank bailouts.

Quote

It is estimated that about half of the fraud is down to professional fraudsters, while the rest is the result of general non-compliance and deliberate evasion by legitimate businesses.

If it's not Libor fraud it's something else.

[Gone baby gone]

BNS, on 07 January 2013 - 10:05 AM, said:

Gerald Clelente nailed this one.

He said at some point individuals see that those who are supposed to set an example to us are corrupt, and the ordinary man on the street thinks, well if he can be corrupt and get away with it, why should I play by those rules which they are unbound by?

At which they too avoid/dodge taxes.

Or go on tax strike.Government suppression funds dry up. So the government puts taxes up which causes government suppression funds to dry up even more.

Wifey is closing down her shop. Lucky for her the lease is up for renewal in February (with a serious rent increase). Thats the last chunk of corporation tax, VAT, business rates and the government will see from her for quite some time. Though I'm not too sure she'll be happy working for somebody else in the job she's got lined up.

You don't even have to go on tax strike - as I raised on today's thread about childcare "tax breaks" in some circumstances you can quickly get to the point where working doesn't make sense, the marginal tax rate is too high. If you are then having to compete with other participants who are subject to the same taxes, there is no motivation to (i) work or (ii) pay tax.