Taxation by moral blackmail? Huh?

[jacey]

Is it just me?

The BBC news this morning said the Jimmy Carr had agreed to cease using LEGAL tax avoidance schemes to reduce his tax bill because HM government is saying that to LEGALLY avoid paying tax is morally reprehensible.

But surely the law is the law. When I was on a business course many years ago it was the accepted theory that you use every legal trick in the book to avoid paying taxes because - well - they're LEGAL. The mantra was that 'tax avoidance is legal, tax evasion is not'. People pay accountants to find legal ways of reducing their tax bill.

I'm sorry, but if there's a tax loophole the government doesn't like, they should plug it - legally.

I know Jimmy Carr is probably pretty wealthy, and that those of us who are not sometimes really like the idea of a wealthy person being forced to part with money, but if the law applies to one person, it applies to all.

I want to know how the government has the right to name and shame people who are not actually breaking the law. When has the government agreed to set aside the law of the land in order to take a decision which was morally right?

I'd like to see the government looking at a low income family and saying: "Ah, Mr and Mrs Smith, I see that we took £2,556.78 from you in tax last year and that having paid this your five children had to wear shoes that were too small for them because you couldn't afford new ones. We agree that we had the law on our side, but we feel it was morally wrong to take this money from you, so we're giving it back."

Yeah, right!

Comments

[the-magician.livejournal.com]

I guess the point is that tax laws are very complex and it's possible to use something that was set up for a positive social purpose (say, deferring tax to help fund the UK film industry) as a way of laundering money and then retiring the funds overseas so that any profits made by the films that would have required taxation are now tax free ...

So the "morally reprehensible" tax avoidance is where someone uses a tax break not for the primary purpose, but just to avoid paying taxes.

So, for example: setting up a business for yourself, getting any pay paid to the company and only paying yourself a salary of £1/month ... but then closing the company down after six months and paying yourself £30,000 "redundancy" so that it comes in tax free ...
... that has probably been made illegal ... but you can see that the whole thing was set up not for a real purpose except to avoid tax.

The Gary Barlow situation may be a little different, it's hard to tell yet, as the money was paid into some sort of music related plan, and it may have an actual use rather than just being a tax-laundering operation.

[birdsedge.livejournal.com]

Yahbut, yeahbut... whether they are being used in the way initially intended they are still (currently) LEGAL. So the government should close these particular loopholes if they don't want anyone to use them. If the problem is a badly written piece of legislation then it needs fixing.

Maybe only the boys in the rich club (which obviously excludes Jimmy Carr and Gary Barlow) can use these loopholes with anonymity. Maybe the government doesn't want to close the loopholes because some of their financial supporters would be affected.

I dunno, it just all smells funny to me.

[birdsedge.livejournal.com]

It's no use blaming the horse for straying out if the open stable door. That's the nature of horses and it's no use trying to change that. But just because one horse has bolted doesn't mean you shouldn't close the bloody door to prevent the rest from getting out.