Is it wrong to avoid paying tax?

"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.

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.

Llilygran where have you got that information from?

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

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 ....

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?

I should have put a there gillybob.

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

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.

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

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?

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

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.

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?

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

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.

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

Although I think it's wrong.

Don't have a gardener Jane

How do you pay your cleaner?

It's called internet banking.

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

I wish I could get paid in cash.

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

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

And you're sticking to that story Jane

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.