Is it wrong to avoid paying tax?

durhamjen

I don't accept your post 16.01.

French/Italian Herve Falciani gave an interview on Sky a couple of days ago. The e.mail which he says he sent on March 18th 2008 is on the internet. He is being reported as saying he sent it to HMRC and to the Foreign and Commonwealth Office at that time. He is either going to turn out to be a fraudster or you are wrong!

Margaret Hodge and other MP's asked Lin Homer at the Public Accounts Committee about the 2008 e.mail. She was not in charge at the time and said she has no knowledge of the e.mail. There will no doubt be a lot of emphasis placed on this particular occurrence if the e.mail is proven to be truthful.

The HMRC is I believe independent of government but the FCO is not and it will be interesting to see what happens. If I wanted to blame Labour in a partisan way I would have mentioned David Miliband was Foreign Secretary and Balls was in the Treasury. I didn't because I believe , and indicated in my post , I believe the rot lies with HMRC.

Just because I raise a valid point re Labour donor John Mills and what I believe is tax avoidance by giving shares is a widely known problem for Labour. If you throw S--T, no matter how relevant and worthwhile the cause may be, make sure you cannot be tinged with the smell yourself.

What the NHS has to do with this I'm b-----d if I know.

Silly me, believing something somebody said in a post. Tut, tut!

Not the only ones Soutra

Understood now Jen

I had a business account with Santander that paid interest on my credit balance. Cash was paid in weekly at the Post Office and there was no charge for that, or paying in cheques.
Credit card payments were charged at 1.6%, which was worth it for the security and the improved cash flow.

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.

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

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

Think you've mis-read my post.

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.

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.

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

Yes to the OP question it is!

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.

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.

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.

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.

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 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.

Pogs it was on the midday news.

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

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 ....

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.

Soutra