Phligm Phlagm

[philmophlegm]

Worried that you might avoid tax? This helpful guide shows you how to avoid avoiding tax.

Does going to court to change your dead millionaire father's will so you pay less inheritance tax count as "avoiding tax"?

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Comments

[steer.livejournal.com]

That article about tax avoidance very seriously misses the point. There is a huge difference between using rules as they were meant to be used and using rules as they were not meant to be used.

The rules for (for example) pensions and charity were specifically designed to encourage people to do those things because the government believes (presumably) people should be encouraged to give to charity and save in a pension.

There's a pretty clear distinction between tax relief (using a law in a way it is intended to be used to pay less tax), tax avoidance (using a law in a way it is not intended to pay less tax) and tax evasion (illegally paying less tax).

Paying less tax because you gave to charity is what the government intended that policy to do. Paying less tax because you employed yourself via an offshore company which pays you a low wage but loans you huge amounts (the K2 scheme) is never what the government intended.

http://lexicon.ft.com/Term?term=tax-avoidance

None of the things mentioned in the article are tax avoidance in the FT's definition or indeed the definition of anyone who has the first notion about it.

[woodpijn.livejournal.com]

Just because there are clear examples of "good" and of "bad" tax avoidance doesn't mean there is a clear line between the two categories.
Did you read the paragraphs at the end of the article, as well as the sarcastic examples?

[steer.livejournal.com]

I agree there will be some harder examples where some people say it is a bit dodgy and some people that it's ok. The author didn't raise any though. He merely listed a bunch of things clearly not tax avoidance and then finished with some kind of "nah, joking" and some point that we were all tax avoiders (which is obviously untrue). I just don't see what the point was of the article at all. He seemed to be trying to add moral shades of grey where there are none... And as you rightly point out, there could be.
It is not yet as if we are in a place where we are angry with people for the semi-legitimate. The big stories where people have been shamed for tax avoidance have all been of the "obviously crooked" types of scheme.

[king-pellinor.livejournal.com]

Giving to charity has been called tax avoidance. Indeed, it was a target of anti-avoidance legislation a few years ago when they brought in the cap on sideways loss relief. Thankfully sense was seen and it was excluded from that cap, but it was an explicit target at first.

Being a charity is being called tax avoidance at the moment, where people are complaining about the status of private schools.

The problem is that in most of the cases complained about as avoidance, it's simply that different actions have different consequences. The most obvious is perhaps just the question of where activity takes place.

If I sit in the UK and sell to UK people, then that activity is in the UK and I pay that there. If I sit in France and sell to UK people, then that activity is... well, depending on what it is, it could be taxable in the UK, or in France, or in the UK for some taxes and in France for others. So in fact #13 on that list is explicit avoidance, too.

Margaret Hodge, Chairman of the Public Accounts Committee, has complained that the Patent Box is being used to reduce tax bills, which she says is not the point of the regime. So there's #14 too.

Several large companies have been reported in the media as using "capital allowances", a well-known dodge, to reduce taxable profits. That's #15.

[steer.livejournal.com]

Giving to charity has been called tax avoidance.

Yes, but not giving in the way described in that article.

it was a target of anti-avoidance legislation a few years ago

Which makes it pretty clear the avoidance was not in the spirit intended by the law.

has complained that the Patent Box is being used to reduce tax bills

Companies are abusive of it. But #14 describes something different.

Being a charity is being called tax avoidance at the moment

Yes, but not giving in the way described in that article. Nobody is describing everything with charitable status as tax avoiding... as usual there are clear violations of the spirit, clear in keeping with the spirit and "hard cases".

As I said, there are difficult cases, that article doesn't describe them, or seemingly have any kind of point whatsoever.

[bunn.livejournal.com]

Somewhat horrified that this is the first I've heard of the 'The appalling compensation for those people imprisoned through a miscarriage of justice.' story and it's not exactly in mainstream news.