Is it wrong to avoid paying tax?

Well I avoid paying tax every year when I use my full ISA allowance.
It goes some way to mitigating the taxes I pay on just about everything I buy.
For example, I have a cleaner once a fortnight. I pay her out of income which has already been taxed at 25%.
She works full time, through an agency, so pays tax and NI on her earnings. The agency employer pays employer's NI and has her profits taxed too. Oh and the government charges VAT too
I could of course evade tax by paying for a cleaner cash-in-hand.

It's evading tax which is illegal and morally reprehensible. Is paying for services cash-in-hand very different from people evading tax by off shore accounts and dodgy accounting practices?

OMG ...I pay my window cleaner cash in hand. Perhaps though I'd better not admit this on a public forum. Does that mean I'm acting illegally or is the onus on Rob to declare his earnings, pitiful though they may be.

He's in exactly the same position as those who squirrel away thousands of pounds in off shore accounts I suppose. But I'm sure his accountant has explained that to him

I Fink!

Does anyone NOT pay a window cleaner cash in hand?

The Queen?

Anya My last window cleaner was a fireman who cleaned windows when he wasn't on a shift. I paid him directly into his bank account.
I have no idea whether he declared his earnings to HMRC.

And you're sticking to that story Jane

Fireman often "moonlight" when they are not on shift. I know one or two who work cash in hand for a local funeral director.

I wouldn't believe anyone who gets paid in cash declares every penny to HMRC.

I wish I could get paid in cash.

I pay my gardener directly into his bank account too, Anya.

It's called internet banking.

Don't have a gardener Jane

How do you pay your cleaner?

I think everyone with a decent accountant would be doing it. Mad not to.

Although I think it's wrong.

I don't approve of banks, Internet ones in particular. I keep my money under the mattress. What I lose in interest I gain by paying cash and so avoid VAT.

We are not talking evasion here. That is a criminal offence. gillybob.

As long as arcane tax legislation is so complicated as to provide a nice little earner for tax accountants, people will exploit perfectly legal loopholes. If parliament wanted to wipe it out, there would be simple broad brush tax laws which a child of 4 could understand. Of course these laws would not be perceived as fair nor indeed would they be! As has been said, avoidance is neither illegal nor immoral, now how about chasing up the evaders?

How does paying cash avoid VAT Anya? If you are saying what I think you may be saying, i.e.that tradesmen charge you less for cash, then they are certainly breaking the law and you are complicit in this.

PS if they are not registered for VAT because they are too small a business, then you would not be charged VAT anyway.

Anya I pay my cleaner's employer (the agency owner) through internet banking.
The point I am trying to make is that large amounts of revenue are lost to HM Treasury by people who don't declare earnings above the amount everyone is allowed tax-free. I am not necessarily criticising the people who are paying them because the responsibility lies with the individual who is earning the money, though I think knowingly colluding with builders to avoid paying VAT is immoral.

I have no idea how many £millions or £billions this amounts to, but glasshouses and stones come to mind.

Incidentally, you said your window cleaner's earnings are pitiful. Is that because you pay him less than the going rate?

It really isn't about your window cleaner.

There were 1,046,398 sanctions, or financial penalties, imposed on Jobseeker’s Allowance claimants in 2013.

Five years after HMRC got the HSBC data there has been one prosecution.

www.taxresearch.org.uk

I know that jings I was just saying that's all.

Big businesses and wealthy people are very good at not paying tax whether it be by legal means or otherwise. It's the rest of us that have to make up the shortfall.

There is a big difference between paying a cleaning agency and paying a cleaner directly though janeainsworth. The agency will no doubt be VAT registered and will be responsible for employers NI, Insurance etc. Paying a cleaner directly (in cash) has very little chance of being declared.

The first blog on that link is interesting, too, in that the government is lying about the amount of tax it collects.

I should have put a there gillybob.

durhamjen

Frenchman Herve Falciani, I think that's his name, wrote to the UK Tax Officials in March 2008, 7 years ago!

Nobody did a thing at that time! That's where the rot started on this matter IMHO but very little media coverage has been given over to that fact, why? I honestly don't know but it is relevant in understanding the length of time HMRC and past and present governments have known about HSBC account handling.

I think there is a case of 'people in glasshouses shouldn't throw stones' to be honest. I think it is ridiculous to believe bank accounts in countries in such as Switzerland, Luxembourg, Barbados have only just emerged on the scene and I think this will become a witch hunt to disclose accounts on MP's and backers on all the parties.

At the end of the day unless the entire worldwide nations unanimously agree on tax payments this will continue to happen.

Labour donor John Mills for example gave Labour shares instead of cash!.

He gave Labour £1.65 million pounds in shares, I believe avoiding paying £700.000 pounds tax. Mills said it was "much the most tax efficient way". Was that not tax avoidance?