Tax Avoidance 101: Investing in British film

[Lateralthinking1]

But morality and legality aren't the same thing: there's no general law against telling lies or deceiving people, for instance. However, in this case it probably has more to do with stupidity than immorality: he really didn't realise it was a dodgy tax avoidance scheme.

Yes, I haven't commented on this forum specifically about the K2 scheme, of which I know little, or what knowledge of that scheme Carr had or didn't have, or any cause or effect of those specific dealings. I know that I find him morally repugnant in any case. On the basis of what we have heard this week in the media and from the Prime Minister, together with an absence of denial of the facts as presented, that perception has felt fully justified.

Clearly the events surrounding Carr have been a natural springboard for discussion about what we know to be tax avoiding schemes - what was described in an earlier post as 'these schemes', the extent of entertainers' values and principles, and integrity in the round. More broadly, since I left employment, we have all acquired more of a sense of the scale of avoidance. I feel that I was in a different world there. We were hoodwinked and I'm thoroughly appalled.

I said that I'd hand lottery winnings to the Government with no strings attached. What I'd do is hold a press conference first. I'd say that my wish would be for the spending to be on the disadvantaged but that MPs had the choice. I'd also express the hope that they would later produce a statement on what the money was spent on but, again, no obligations. There would be another press conference at the end of the year. The process would be presented as having been an opportunity for MPs and others to show that they could clean up their act and start to see themselves as giving to, as well as taking from, their community.

My tax was deducted at source in 1985-2010 and for approximately another two years earlier. In my one year of self-assessment, 2010-2011, I estimate that I consciously paid slightly more tax than necessary while facing a future of no further income.

[handsomefortune]

someone's responded to marina hyde's article that "hypocrisy is the vaseline of political intercourse".

is lip balm the same?

[Serial_Apologist]

someone's responded to marina hyde's article that "hypocrisy is the vaseline of political intercourse".

is lip balm the same?

It used to be called lip salve...

[Resurrection Man]

......
I'm not supporting these tax schemes, of course they should be made illegal, and Cameron, instead of pontificating about other people's 'morality', has the real power to do something about them!

Which tax schemes? What is the difference between these and an ISA? Both avoid paying tax within the letter of the law.

[Resurrection Man]

....People are dying because of insufficient money for our support services.

Do you actually have any hard, unbiased evidence to support this statement?

[scottycelt]

Which tax schemes? What is the difference between these and an ISA? Both avoid paying tax within the letter of the law.

Don't ask me, I'm nether rich nor a lawyer! As for ISAs, as there is an upper limit, the tax-savings on those are minimal and, frankly, are hardly worth bothering about.

These tax-schemes for the rich, loopholes, call them what you like, obviously exist or people like Jimmy Carr wouldn't be able to reduce their tax-bill to such a huge extent.

All I'm saying is that people can hardly be blamed for acting within the law, especially when the accuser is a Prime Minister who has the power to help change that law.

I'm not prepared to criticise people who reduce their tax legally. The fault lies with the law and these schemes should simply be made illegal.

[Lateralthinking1]

Do you actually have any hard, unbiased evidence to support this statement?

You might start here RM. Two of the articles are from the Marxist Daily Mail -

http://www.dailymail.co.uk/debate/article-2117718/British-people-committing-suicide-escape-poverty-Is-State-wants.html

http://www.guardian.co.uk/society/2012/may/23/nhs-failings-causing-diabetes-deaths

http://www.dailymail.co.uk/news/article-2161869/Top-doctors-chilling-claim-The-NHS-kills-130-000-elderly-patients-year.html?ito=feeds-newsxml

http://www.poverty.org.uk/summary/uk.htm

http://www.jrf.org.uk/

Meanwhile, news in The Guardian today about Rushmore - http://www.guardian.co.uk/business/2...-tax-avoidance. Jimmy Carr, who made an error with K2, was a Director of this scheme along with a Tory donor and over 500 others. I expect they were all talked into it, didn't know the details and collectively can barely write a sentence. Every one is probably being victimised.

Clive Anderson - "Pension plans, Isas, Peps and Tessas are tax-exempt to encourage us to save for our old age or for the lean years when our income dips below the £3 million mark. But in these circumstances the Government is encouraging us to arrange our finances in our own self-interest but also in the interest of government policy. Less clear-cut are other wheezes – converting income into capital, wages into loans, profits into losses – that seem all right in the financial adviser’s office, but which might not look so good in the cold light of day. Of course, these schemes are right only if they are legal. But being lawful is not always enough. Tobacco and alcohol are legal drugs but too much of either can kill you".

[Lateralthinking1]

I think it is quite simple but politicians need to make up their minds and then have the motivation to do it:

The Government to receive lessons from China and India on how they are tackling the issue successfully.

http://www.thejakartapost.com/news/2012/05/02/china-gains-24b-yuan-anti-tax-avoidance.html

http://www.chinapost.com.tw/asia/india/2012/05/06/340160/India-moving.htm

Then to change the constitutional arrangements with the Channel Islands and the Isle of Man.

Also to introduce legislation defining all legitimate tax avoidance schemes, eg ISAs. It also needs to define legitimate processes of avoidance, ie specific kinds of money flow. The new law to say that anything outside those definitions and that has the character of tax avoidance, also defined, will be adjudged as being tax evasion.

A time gap of one month before any money from product sales etc can be moved out of Britain.

Introduce an annual tax ahead of earnings for anyone who has very high income based on their previous year's income. If they then earn less, the excess money can be refunded. Similar to what happens with phone and energy bills.

Require the top 2%, or their accountants, to attend tax reporting centres like job centres but only monthly to present a work book indicating the efforts they have put in during work and the payments made to them.

All aid to foreign tax havens, including British dependencies, to cease. Withdrawal of separate agreements with EU countries like Luxembourg until change. Discussions with the French Government about Monaco to effect change.

Illegal for political parties to receive donations from convicted fraudsters, once the new laws have been introduced.

[ahinton]

A furious piece by Marina Hyde on why so many dodgy British films have been made in the recent past - and it's all down to tax avoidance!

http://www.guardian.co.uk/commentisfree/2012/jun/22/tax-avoidance-secret-bad-british-film

Just don't ask me (or Marina) to explain the details (ahinton will be along in moment, I'm sure )

Apols ahinton - cheap shot!

Apols accepted. Anyway, as you've noticed by now, I wasn't along in a minute and, if it was the cheap shot that you say it was, I don't mind as long as it was tax-deductible.

I've already said enough about this kind of thing here, I think. All that I have to add at this point is that I remain to be convinced that any kind of legal tax avoidance on any scale is any more immoral than actually paying tax that gets earmarked for such things as illegal wars. It's only the law that matters where tax payment and avoidance are concerned, so if the government is getting antsy about any particular scheme it has only itself to look to in order to try to push it outside the bounds of the law into evasion territory and then anyone who continues to use it will be breaking the law.

That said, I have to admit that it is rather unusual for a minister, let alone a prine one, to get publicly involved in an individual case as has happened here.

Following on from another thread, maybe when someone finally devises a similar kind of scam that appears to involve legitimate investment in British contemporary music composition, the flack will really start to fly...

[Resurrection Man]

You might start here RM. Two of the articles are from the Marxist Daily Mail -

http://www.dailymail.co.uk/debate/article-2117718/British-people-committing-suicide-escape-poverty-Is-State-wants.html

http://www.guardian.co.uk/society/2012/may/23/nhs-failings-causing-diabetes-deaths

http://www.dailymail.co.uk/news/article-2161869/Top-doctors-chilling-claim-The-NHS-kills-130-000-elderly-patients-year.html?ito=feeds-newsxml

http://www.poverty.org.uk/summary/uk.htm

http://www.jrf.org.uk/

Meanwhile, news in The Guardian today about Rushmore - http://www.guardian.co.uk/business/2...-tax-avoidance. Jimmy Carr, who made an error with K2, was a Director of this scheme along with a Tory donor and 498 others. I expect they were all talked into it, didn't know the details and collectively can barely write a sentence. Every one is probably being victimised.

Clive Anderson - "Pension plans, Isas, Peps and Tessas are tax-exempt to encourage us to save for our old age or for the lean years when our income dips below the £3 million mark. But in these circumstances the Government is encouraging us to arrange our finances in our own self-interest but also in the interest of government policy. Less clear-cut are other wheezes – converting income into capital, wages into loans, profits into losses – that seem all right in the financial adviser’s office, but which might not look so good in the cold light of day. Of course, these schemes are right only if they are legal. But being lawful is not always enough. Tobacco and alcohol are legal drugs but too much of either can kill you".

I looked at two of your links....the Guardian and one of the Mail's. Neither made ANY mention that these deaths were due to inadequate funding.

[Resurrection Man]

...... Similar to what happens with phone and energy bills.

....

I really haven't got the time or the energy to even begin to comprehend where you are going on this as none of it makes any sense whatsoever. Your news references are just random extracts as far as I can see. We have been and continue to tighten up tax-free havens etc. It is also there in the press if you'd bother to look for it.

But my main concern is your statement that I have quoted above. This is simply nonsense. You are referring to people who OPT to pay a certain amount of money each month to go into a 'credit' pot at the energy provider of THEIR choice. There is absolutely zero correlation with your other statement. I am also guessing that you are not a director of a small limited company or a self-employed person since we already have to pay upfront and in advance tax based on our previous earnings.

[Lateralthinking1]

I looked at two of your links....the Guardian and one of the Mail's. Neither made ANY mention that these deaths were due to inadequate funding..........I really haven't got the time or the energy to even begin to comprehend where you are going on this as none of it makes any sense whatsoever. Your news references are just random extracts as far as I can see. We have been and continue to tighten up tax-free havens etc. It is also there in the press if you'd bother to look for it.

But my main concern is your statement that I have quoted above. This is simply nonsense. You are referring to people who OPT to pay a certain amount of money each month to go into a 'credit' pot at the energy provider of THEIR choice. There is absolutely zero correlation with your other statement. I am also guessing that you are not a director of a small limited company or a self-employed person since we already have to pay upfront and in advance tax based on our previous earnings.

The Guardian article does refer to NHS funding issues. One of the Mail articles explicitly refers to funding. The second is about the need to free up hospital beds. I see that as a funding issue. There will be others who would have the NHS run down to 10 pence and still claim it had a problem with efficiency. There is no point in my providing further evidence in the context of lacunas.

The situation on energy isn't quite as all freedom loving as you imply. Companies often only offer lower payments to those who accept the 'credit pot' arrangements. They also 'nudge' the public in other ways - you have to have an internet account and so on. If the least well off want to benefit from lower payments, they are forced into situations. Only the well off have choice.

It doesn't appear to me that those in K2, Rushmore, or any similar schemes pay tax prior to earnings and I'm not seeing tightened tax havens. I think the most recent, late in the day, 'initiative' by the Coalition begins with the word 'general'. It's in draft. What we need first is a figure from HMRC for the number of people in Britain who last year paid tax at recognisable rates.

I am not a director of a small limited company or a self-employed person. However, I am intrigued by how readily folk who are in those categories align themselves with policies that favour the multinationals and individuals with ludicrous wealth. Is it an image thing, an aspirational thing or something more substantial? I would think that many in small private businesses suffer from entertainers paying tax at 1% as much as anyone else but then I am not party to knowledge exchanged on the whispering vine.

(Incidentally, there was a young chap on the wireless who rang in to say that he thought being required to pay any tax was immoral. Perhaps it is time for any contributors to this forum who think similarly to raise their hands, preferably in the light).

[scottycelt]

... (Incidentally, there was a young chap on the wireless who rang in to say that he thought being required to pay any tax was immoral. Perhaps it is time for any contributors to this forum who think similarly to raise their hands, preferably in the light).

As we know only too well from this forum (and even Prime Ministers) , 'morality' can be a very personal and subjective thing and can sometimes simply be used as an alternative word for opinion. That's precisely why we need laws!

I believe there are plenty of folk in the US who think like that young man, but I doubt it is a widely-held view in the more mature European societies. I don't like paying tax, and I've rarely heard anyone whoop for joy when they receive their wage slip, or when VAT is suddenly added to the goods in their 'basket' when they have finished their purchasing online.

Still, it does appear to be a necessary evil in order to run anywhere near a reasonably civilised society, whatever the young man's 'morality' ...

[MrGongGong]

I had to google 'Lily Allen' to find out who she was and what she said..

Surely statements like this (along with the similar ones one sometimes gets about contemporary composers) make the comments following appear to be ill informed ?

"I've never heard any Mendelssohn but I know what the problem with chamber music is" .......... hummmmm
"I've never heard any of Luciers music, but it's all crap" .......... hang on a minute ...........

[scottycelt]

Surely statements like this (along with the similar ones one sometimes gets about contemporary composers) make the comments following appear to be ill informed ?

"I've never heard any Mendelssohn but I know what the problem with chamber music is" .......... hummmmm
"I've never heard any of Luciers music, but it's all crap" .......... hang on a minute ...........

Don't see your point ...

I shamefully confess to never having heard of Lily Allen beforehand, but took the trouble to find out who she is, and what she said on the subject of taxation under discussion here. I'm not sure what connection this has to the two (presumably made-up) quotes following. If the quotes are genuine they do indeed sound extremely silly, I quite agree.

So what exactly is your point, Mr GG, apart from yet another plug for 'contemporary composers' ... ?