Is it wrong to avoid paying tax?

A drop in the ocean compared to the amount of money the Cameron family have made for themselves and helped other people to make through overseas tax havens methinks ....

Nobody in HMRC remembers getting the letter or phone call about HSBC!

Llilygran where have you got that information from?

When we were students both my husband and I waited on tables to earn some extra cash. The jobs were for functions and on an ad hoc basis and we were always paid cash in hand through the various people who booked us. We had no idea whether tax had been deducted beforehand or not as we were paid per job. We kept a careful record of each job and the amount we were paid and at the end of the tax year submitted our list to the tax office. We received a phone call from a very bemused tax inspector who said he'd never had anyone declare their earnings in this way before and he said it would cost more to work out if we owed any tax (which was unlikely in view of our very limited income) than the amount of any revenue it was likely to bring in. No further action was taken.

"Show me how you measure me and I will show you how you behave". The system is set up to encourage people to avoid tax by doing things that various governments have put in place in the past to allow them to do so.

Alter the system so that there are no legal ways of avoiding tax and, as soon as more was being collected you could reduce the taxes required. Keep reducing as more comes in and it would soon not be worth most people not paying their taxes. A few would behave illegally and a some accountants would be out of a job but I am sure both those problems could be addressed.

Soutra

There are two types of tax avoidance. One is to indulge in behaviour that the tax legislation is intended to promote, such as investing in an ISA or buying green products, and then there are behaviours that exploit loopholes in the legislation that is intended to prevent them.

Yes crun we all 'avoid' tax in those ways. Whenever I giftaid, that allows the charity to 'avoid' tax. So, going back to the OP, how ridiculous to say that tax avoidance is morally unacceptable. Some instances are legal.

I've just come back from having a much needed facial. I gave the girl a tip. Of course she's not going to declare that. Nor my hairdresser. OK that is perhaps not exactly legal but is it morally unacceptable?

I won't ask Janea ....

Actually Anya I think HMRC assume that hairdressers, beauticians etc. get a certain amount in tips and tax them accordingly.

Pogs it was on the midday news.

I had a very rude letter from the tax bods last year as I had made a genuine error when filling the form online for the first time. I failed to notice that my state pension is paid in 13 and not 12 installments. I had a shirty phone conversation with one lady, pointing out that a small understandable error, which I instantly redressed, was a whole lot different from big business and their calculated evasions, and that I did not appreciate being spoken to like a criminal. I also said that they go for easy targets (I am a "poor pensioner") rather than the real culprits. It made me quite mad! - you can probably tell!

It still finished up that they owed me money!

I know several people who get quite a bot of their income from cash in hand and I never inquire as to whether this is declared. It is a matter between them and their consciences.

If only we could stipulate how our taxes were spent! - then we might feel happier to pay it. But I do feel a bit irritated knowing that those who avoid tax do not avoid using the roads and health services etc that taxes supprt.

Mishap, ask them to pay you weekly, then you will not make a mistake!

POGS, the Swiss bank whistleblower fled to France with the files. The French government did not tell other tax authorities until 2010 about the existence of the files. HMRC did not receive the files until April 2010.

There's a timeline in yesterday's Guardian.
I know you love to blame the Labour Government for everything that has gone wrong on this government's watch, including anything whatsoever to do with the NHS, but you are wrong about this.

I'm afraid I think that aiding and abetting fiddling VAT and "saving a bit by paying cash" Is cheating the system and undermines tradesman being able to charge a decent amount for a day's work. It may not be on the same scale as major tax evasion, but it's a slippery slope. May I add that if HMRC suspect VAT irregularities, they have draconian powers and many a small business has gone under because they tried to pull a fast one.

The thing about paying cash to a business is that many businesses are run through cash.
If you pay by card or cheque, that has to go through the bank and the business is charged. I always pay cash to my dentist.

When people paid me cash I used it to buy goods for the business. It meant the overheads were not as high, therefore I could charge less than if everything went through the bank. There is nothing underhand about paying cash. I dislike the phrase cash in hand because it implies something underhand.

Both my businesses were vegetarian and organic, so I could not just buy everything from the nearest cash and carry, as they did not sell the things I wanted to use. I had to buy from supermarkets that sold organic fruit and veg. For that, I used cash. I bought other goods from Suma Wholefoods and for that I paid by cheque. Although I took payment by card for the guest house, I only took cash in the cafe. I never cheated the taxman or the VAT inspector.

Do you mean that when people paid you in cash, and you spent the money on things for the business, you didn't put actually it it through the books jen?
My accountant was quite clear with me right from the start that any monies taken, whether it was cash, cheques or credit cards, had to go through the books, and into the bank account, and every single penny spent on the practice was entered too, so that in the event of an investigation by the revenue, we would have a proper audit trail of income and expenditure.
I might have saved myself some tax by paying for things with cash and not putting it through the books but to me it wasn't worth the risk, apart from anything else.

Depends if they are PAYE or self emplyed Gill

Self assessment forms do (as I recall) have a section relating to gratuities. Some hairdressers, as I expect you know, are self-emplyed within a business as they 'hire' the chair.

Others are paid employees and as such are taxed at source. So there is no option to tax tips unless they are added to their weekly wage. Unfortunately some companies do the opposite. They use tips to avoid paying employees the minimum wage, by counting these tips, not in addition to their hourly rate but instead of.

I used to do the tax returns for DH's business and the accounts for our Parish Council, the latter being audited by Ernst and Young.

Yes to the OP question it is!

SIL is a partner in E&Y, best not to enquire too closely which PC?

I don't understand the logic to not putting materials etc through the books Jen . These can be offset! quite legitimately, against tax in most instances.

Everything was done by the book Soutra you can enquire all you want which PC. If SiL is a partner in E&Y you will know the standard they set before signing off accounts.

Think you've mis-read my post.

It was your post of 10.53 that raised my eyebrows Anya -I assume you were joking (?), only HMRC are not renowned for their GSOH

No, I did not mean that, jane. Everything went through the books. It just did not go through the bank, so they could take a cut of it.

It wasn't saving tax, it was saving bank fees. You obviously know how much banks charge a business, even to pay cash in.

Anya, I did not say I did not put materials through the books. I said I did not pay cash into the bank. Everything went through the books.