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ScaredEitherWay

How Tax Evasion Works

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It was aired a couple of months ago, but I never saw it mentioned at the time,

http://news.bbc.co.uk/panorama/hi/front_pa...000/7865636.stm

Panorama, from February 2009.... in case you missed it too.

Difficulty Level: Get your crayons out to draw a picture for your mummy to take home once you've seen it.

Edited by ScaredEitherWay

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AVOID. Not evade. Evading it is stupid unless you are doing it for serious amounts of wedge and can just leave the country or owe enough to be able to do a deal when you get caught.

Avoidance is sensible, a good practice and should be encouraged.

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AVOID. Not evade. Evading it is stupid unless you are doing it for serious amounts of wedge and can just leave the country or owe enough to be able to do a deal when you get caught.

Avoidance is sensible, a good practice and should be encouraged.

I claw my hard-earned back from the evil chancellor, you avoid tax, he evades tax. Or something like that[1].

Heard on the news recently: someone's furious at Lloyds for encouraging clients to evade tax. Northern Rock too, though they were (IIRC) marginally less blatent.

[1] Actually I plan to avoid tax this year to the point where my "tax" for the year is less than half of one month's "national insurance". I regard it as my moral duty to do my best to avoid financing these terrorists and crooks.

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Without wanting to say too much............America is the number ONE tax haven if you not American!

Mike

I would love to get a few hints ...... Cheap houses, low taxes, plenty of parking, better weather : sounds about right to me.

I thought that the UK was the ground zero of tax havens if you are a non-dom .......

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I would love to get a few hints ......

Good point. I had to go through rather a lot of pain to be able to repatriate money from the US without them withholding 30% in federal taxes. And that's just very small amounts: not more than a couple of thousand dollars at a time. Grrr ...

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Good point. I had to go through rather a lot of pain to be able to repatriate money from the US without them withholding 30% in federal taxes. And that's just very small amounts: not more than a couple of thousand dollars at a time. Grrr ...

That has been my experience too.

If there is a clean way to bring capital into the US, defer taxes on income not repatriated into the country and live in a cheaper, easier country than England by depleting capital rather than relying on income, I am all ears ......

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I was reading that Britain's tax code is now the longest in the world. Tolley's Yellow Tax Handbook now has 11,520 pages. This is double what it was in 1997 and they changed the font too to fit more on the page!

I know in our modern world we need to give people jobs that don't really need doing but I am sure they could be more

helpful to society, like nurses, helping old people or like the red flag guy in Japan when you back the car out of the car park, etc, rather than strangling businesses with endless legislation and creating unproductive lawyer/accountancy positions.

Why can't the Tax Code fit on one A4 page? Any tax collecting people who read this forum care to answer?

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I was reading that Britain's tax code is now the longest in the world. Tolley's Yellow Tax Handbook now has 11,520 pages. This is double what it was in 1997 and they changed the font too to fit more on the page!

I know in our modern world we need to give people jobs that don't really need doing but I am sure they could be more

helpful to society, like nurses, helping old people or like the red flag guy in Japan when you back the car out of the car park, etc, rather than strangling businesses with endless legislation and creating unproductive lawyer/accountancy positions.

Why can't the Tax Code fit on one A4 page? Any tax collecting people who read this forum care to answer?

1) 10% tax on profit the business makes after salary payouts.

2) Re-investment into the business exempt.

3) No expenses allowed.

Type that into the middle of an A4 as the Tax Code. Sack 20,000 Inland Revenue staff.

:-P

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The truth is that to a degree tax avoidance is all too possible, there are so many loopholes available ..... whats more for the self-employed it should be an absolute doddle to avoid not only ALL personal tax but also all NI and all company NI and tax.... there are several ways of doing this currently... some haven't I suspect been fully "tested " yet in the courts but even so, when one closes another seems to open.... if you are paid a salary of course then its a little more difficult.

having seen how much money the labour government has wasted over the years I think its everyones duty to legally avoid paying as much tax as possible... the less they have the less they can waste... eventually they may end up actually being careful about how they spend the tax they do get to play with.

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The truth is that to a degree tax avoidance is all too possible, there are so many loopholes available ..... whats more for the self-employed it should be an absolute doddle to avoid not only ALL personal tax but also all NI and all company NI and tax.... there are several ways of doing this currently... some haven't I suspect been fully "tested " yet in the courts but even so, when one closes another seems to open.... if you are paid a salary of course then its a little more difficult.

having seen how much money the labour government has wasted over the years I think its everyones duty to legally avoid paying as much tax as possible... the less they have the less they can waste... eventually they may end up actually being careful about how they spend the tax they do get to play with.

That is the problem with taxes like VAT and PAYE. Legislation forces other people to collect and administer them for the government so the government can just grab and waste.

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That has been my experience too.

If there is a clean way to bring capital into the US, defer taxes on income not repatriated into the country and live in a cheaper, easier country than England by depleting capital rather than relying on income, I am all ears ......

I am part of a credit union, my wages go into my US account as $ and then for $25 I can wire up to $10,000 (IIRC) pretty much anywhere, no taxes involved. Whether this is exclusive to my credit union or not I have no idea though.

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That is the problem with taxes like VAT and PAYE. Legislation forces other people to collect and administer them for the government so the government can just grab and waste.

You claim PAYE back in your next year's tax return. That's why they're reclassifying ever more of it as "national insurance". Did you know that NI is now more than half of the direct tax on the income of most working people?

/me used to be VAT-registered too, but that's more trouble than it's worth when turnover is down.

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The US is definitely one of the best, if not the best, place to hide assets / cash if you are not a US person.

The US have been really pressurising 'tax havens' for exchange of information (EIO) agreements. These are similar to what is found in double tax treaties that are signed between countries. Effectively the countries involved agree to supply certain information to the other if requested.

The big joke is that whilst the US tax treaties have EOI clauses any request for information from a foreign Tax Authority can not be met. This is because the US do not currently have any reporting requirements on US banks for this type of income.

This is why there are a number of Private Banks in the US, especially in Miami.

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AVOID. Not evade. Evading it is stupid unless you are doing it for serious amounts of wedge and can just leave the country or owe enough to be able to do a deal when you get caught.

Avoidance is sensible, a good practice and should be encouraged.

The idea that tax avoidance as currently done is in any way "good" is complete and utter b**shit used by those doing it to self-justify their actions. If it was done and the government as a result reduced overall taxes, then it would be "good". But instead all you do is transfer the tax burden onto others who do not have the will or ability to avoid taxes as you have. Mostly a transfer from the well off to our future children and everyone else in our society. How is that good? Don't attempt to justify your own greed by labeling it as a benefit to the whole of society. It won't wash.

If you were really against taxes. You'd pay them as your duty to society. But would vote for every tax reducing politician in every single election be it european, local, or parliamentary. You would organize or join organizations against taxes. You would stand as an low tax independent in elections yourself. Not willing to do that? then don't attempt to justify your own greed by labeling it as a benefit to the rest of us.

Edited by alexw

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The truth is that to a degree tax avoidance is all too possible, there are so many loopholes available ..... whats more for the self-employed it should be an absolute doddle to avoid not only ALL personal tax but also all NI and all company NI and tax.... there are several ways of doing this currently... some haven't I suspect been fully "tested " yet in the courts but even so, when one closes another seems to open.... if you are paid a salary of course then its a little more difficult.

having seen how much money the labour government has wasted over the years I think its everyones duty to legally avoid paying as much tax as possible... the less they have the less they can waste... eventually they may end up actually being careful about how they spend the tax they do get to play with.

My above statement applies to you also.

And for the bold bit.... No they won't everyone else who can't avoid as you might simply pays more. Its just a wealth transfer from those who can't avoid to those who can.

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Did you know that NI is now more than half of the direct tax on the income of most working people?

I think it is more. The employers' NI contribution is about 13% and the employees' NI contribution is 11%. Standard rate of income tax is only 20%.

On my pay slip the total of year-to-date employee+employer NI is about 50% more than the income tax year-to-date.

The employers' NI contribution would in theory be available to remunerate the employee.

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Did you know that NI is now more than half of the direct tax on the income of most working people?

I think it is more. The employers' NI contribution is about 13% and the employees' NI contribution is 11%. Standard rate of income tax is only 20%.

On my pay slip the total of year-to-date employee+employer NI is about 50% more than the income tax year-to-date.

The employers' NI contribution would in theory be available to remunerate the employee.

If you add up your gross wages and your employers national insurance contribution, take away your nett pay from the total the result is the amount of income tax that you pay.

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The idea that tax avoidance as currently done is in any way "good" is complete and utter b**shit used by those doing it to self-justify their actions. If it was done and the government as a result reduced overall taxes, then it would be "good". But instead all you do is transfer the tax burden onto others who do not have the will or ability to avoid taxes as you have. Mostly a transfer from the well off to our future children and everyone else in our society. How is that good? Don't attempt to justify your own greed by labeling it as a benefit to the whole of society. It won't wash.

If you were really against taxes. You'd pay them as your duty to society. But would vote for every tax reducing politician in every single election be it european, local, or parliamentary. You would organize or join organizations against taxes. You would stand as an low tax independent in elections yourself. Not willing to do that? then don't attempt to justify your own greed by labeling it as a benefit to the rest of us.

no-one in their right mind pays more tax than they need to. If I have to pay it, I will. However, please don't give me this moral crusade sht1. This government (and almost every other one)'s solution to a shortage of revenues is to tax more - not to stop wasting that ample amount they already have. If they would just stop being so fkcuing useless with the money we already give them then they would not need to tax me as much (or you).

So please, put down your Socialist Worker. What greed, I work hard, I pay a lot of tax - why the cluck would I be happy to pay more so the government can waste even more of it. Christ, they could save me a fortune by simply having a flat rate (of 18% (or it was until the current debacle)) [Adam Smith Institute research], but instead they cost billions and billions to tax and administer pointlessly.

Every pound in tax collected loses about 34p in government administration - so it is only worth 66p. Every pound saved is a pound saved.

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The idea that tax avoidance as currently done is in any way "good" is complete and utter b**shit used by those doing it to self-justify their actions.

So every charitable donation is an act of greed? (yes, that's an important form of tax avoidance).

Every investment in a small business other than your own is an act of greed, unless you give yourself access to pull the plug on that business without notice? (yes, a three-year or five-year committment earn you some of the best tax breaks, and give some measure of stability to new businesses in need of investment).

And saving for a pension is an act of greed? Without the pension funds, even our biggest companies would be starved of investment. It's bad enough bailing out banks, without pulling the plug on the whole economy.

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If you add up your gross wages and your employers national insurance contribution, take away your nett pay from the total the result is the amount of income tax that you pay.

Not quite. That works if you re-word it to use the passive voice, but the active "you pay" isn't quite true.

I find it makes things simpler if we express it all in terms of headline salary figures (incl on-payslip benefits). That gives us marginal tax rates of 45% for people earning between about £6k and £43k, less whatever wheezes they can use.

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no-one in their right mind pays more tax than they need to. If I have to pay it, I will. However, please don't give me this moral crusade sht1. This government (and almost every other one)'s solution to a shortage of revenues is to tax more - not to stop wasting that ample amount they already have. If they would just stop being so fkcuing useless with the money we already give them then they would not need to tax me as much (or you).

So please, put down your Socialist Worker. What greed, I work hard, I pay a lot of tax - why the cluck would I be happy to pay more so the government can waste even more of it. Christ, they could save me a fortune by simply having a flat rate (of 18% (or it was until the current debacle)) [Adam Smith Institute research], but instead they cost billions and billions to tax and administer pointlessly.

Every pound in tax collected loses about 34p in government administration - so it is only worth 66p. Every pound saved is a pound saved.

Then dont give us shit saying its a "good thing" that your doing so. Say I dont want to pay the tax, I want to spend it myself on myself, thats why i do it. Don't give false justifications that your doing it for the "good" of society, your not, your doing it for the good of yourself, bugger everyone else.

And why do you think that is? The majority is due to tax avoidance, whereby the government gives some useful tax break, but which then gets exploited to hell and back. The government then has to put in numerious clauses to close the exploitative part, etc, etc. Then some clever accountant finds another loophole which again gets exploited... and so it continues. Thats why the admin cost is so massive.

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So every charitable donation is an act of greed? (yes, that's an important form of tax avoidance).

Every investment in a small business other than your own is an act of greed, unless you give yourself access to pull the plug on that business without notice? (yes, a three-year or five-year committment earn you some of the best tax breaks, and give some measure of stability to new businesses in need of investment).

And saving for a pension is an act of greed? Without the pension funds, even our biggest companies would be starved of investment. It's bad enough bailing out banks, without pulling the plug on the whole economy.

No the things you quote when done in the correct manner is a benefit to society. What i am against is those going willfully to minimize all taxes paid solely for the benefit of those lower taxes.

For example if your making a charitable donation as a return to society of some of what its given you, that benefits us all. But as an earlier poster mentioned, if your self-employed its possible to avoid all taxes whatsoever. To do so is simple self-interest, i.e. greed.

If large numbers do this, then that forces upon us more taxes and bureaucracy as the government must attempt to recoup the lost taxes. Society as a whole loses out while a few (the abusive avoider's) benefit.

What angers me most is those who say this a "good thing", meaning a good for society, or try to justify it in other ways. The hypocrisy is astounding. Its done solely for self-interest, greed, and an "i dont care about the effects on everyone else, screw em" attitude.

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No the things you quote when done in the correct manner is a benefit to society. What i am against is those going willfully to minimize all taxes paid solely for the benefit of those lower taxes.

Good, so I have your blessing for my £26-7k rebate, which is based entirely on the three wheezes I mentioned.

For example if your making a charitable donation as a return to society of some of what its given you, that benefits us all. But as an earlier poster mentioned, if your self-employed its possible to avoid all taxes whatsoever. To do so is simple self-interest, i.e. greed.

Rose-tinted spectacles there. You can't avoid tax legally, only by failing to declare earnings (and I expect some of the biggest practitioners of that may be those whose business involves selling the Big Issue). Sure, there are legal ways to reduce tax (my main one was to re-invest in the company), but then you pay corporation tax instead.

If large numbers do this, then that forces upon us more taxes and bureaucracy as the government must attempt to recoup the lost taxes. Society as a whole loses out while a few (the abusive avoider's) benefit.

Wrong. Take that money away and you kill the goose that lays the golden eggs of both employment and taxes. Feed it and you benefit. That's why I can't see them killing off the tax benefits on pensions (what they did on £150k+-earners is 99% illusory, because if you earn that much on a regular basis you'll hit the lifetime limit anyway).

What angers me most is those who say this a "good thing", meaning a good for society, or try to justify it in other ways. The hypocrisy is astounding. Its done solely for self-interest, greed, and an "i dont care about the effects on everyone else, screw em" attitude.

When the country is in Denial, it is a Very Good Thing to force the issue, so we reach the point of going cold-turkey sooner rather than later, and can hope for recovery. Every little helps.

To quote from my blog (and note in particular the two links):

On a philosophical note, I regard it as my strong duty to humanity and to my country to ensure my money goes to better places than HM treasury.

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