Students to be taught in British schools - by Wyclef
scumble on 21/3/2006 at 22:27
Quote Posted by Paz
serious business fraud - which occurs with just as much regularly and (of course) involves far greater sums - is *comparatively* overlooked
But there is also the amount that is technically wasted due to overly bureacratic government management, also probably quite a lot of money and difficult to quantify. If we talk numbers
that might turn out to be more significant on the whole. Using up resources on more effort to prevent tax aviodance is likely to cause more trouble and cost to those who diligently pay up.
There's no guarantee the supposed 85 billion would have been used better had it actually been collected. Still, as the article Chimpy linked to suggests, tax law is such a nightmare that the treasury would have trouble coming up with some reliable figure. Or whoever it was came up with it...
Quote:
And even if big companies can afford some complexity, it means that small businesses never form or expand — never take on their first employee and enter the nightmare world of PAYE — not to mention those on low incomes, who cannot realistically afford tax advice. The trouble is, tripping up basically law-abiding people over PAYE compliance is easier than tackling the black economy.
I suppose this resonates with me more, as small businesses tend to get the most caning from complex rules designed to catch out the big players, who can afford clever lawyers, or ultimately bugger off overseas. The local butcher or organic farmer can hardly do the same thing, and that's the sort of business I would rather see thrive.
Vigil on 21/3/2006 at 22:59
[QUOTE=]Using up resources on more effort to prevent tax aviodance is likely to cause more trouble and cost to those who diligently pay up.Which is why, at least in New Zealand, there's a tacit distinction between small fry and big fish when it comes to enforcement - the inland revenue doesn't piss money against the wall chasing down small-scale tax-evaders, even though no doubt a large percentage of the overall tax loss is from them, because it costs much more to investigate and prosecute individual small companies than the IRD would reclaim in backtaxes. Instead they go after the large companies and large-scale evaders that will be most 'profitable' to enforce.
Whereas they take a rather different tack when it comes to benefit fraud in NZ - for several years they ran a dob-your-mate-in anonymous phone hotline, with a high-profile ad campaign urging the citizenry to regard benefit fraud as not just a crime, but a direct crime against themselves. A cunning way of creating a deterrent to benefit fraud without spending much money on investigation. It didn't work too well.
SubJeff on 21/3/2006 at 23:02
Quote Posted by Strontium Dog
so he got a full student grant, all tuition fees paid for him and any number of additional benefits that were intended for students from low-income families.
Technically, one of these is breaking the law and one isn't. But which one of them is stiffing the system to a greater degreee?
When was this? And what course was he doing?
It's clear who is "more" in the wrong here, but this is just it - the systems we have mean that any number of stupid situations arise. When I was at uni in the mid 90s I knew a guy who didn't get any money from his parents as they thought he should stand on his own two feet. But they also earned too much for him to be eligible for a grant. I got a grant and help from my parents.
scumble on 22/3/2006 at 08:37
The law of unintended consequences...
Convict on 22/3/2006 at 13:07
Tax Evasion:
Illegally avoiding paying taxes, failing to report, or reporting inaccurately. The government imposes strict and serious penalties for tax evasion. Tax evasion is different from tax avoidance, which is making use of legal methods to minimize a tax burden.
Quote Posted by Paz
If, for example, my savings are too great for me to claim a certain level of benefit, but I move some money to another account to disguise this fact and then make a claim - is this "unacceptable avoidance". I'd say it definitely was, yet any decent business accountant would treat this as merely clever asset usage (they'd also probably set up dummy companies and the like instead of using a new bank account, but the principle is the same).
That's illegal and therefore tax evasion not tax avoidance.
The thing about people rorting welfare is that it seems more personal and in your face than a big faceless corporation I suppose.
Quote Posted by Myoldnamebroke
If tax is being avoided, you've got dodgy tax law. Surely these things aren't implemented with the idea of giving companies a way to minimise costs? They're there because the government has plumped for a certain level of taxation as acceptable. If a company is avoiding paying that tax, it shouldn't be viewed as ingenious, it should be viewed as cheating or a sign of dodgy lawmaking. It's not an aren't you clever move if someone that isn't a giant company tries to pull a similar trick, it's ILLEGAL YOU SPONGES. And so on.
Most people claim work expenses as tax deductions - that's tax avoidance. Whether or not that is a "dodgy law" is debatable.
Myoldnamebroke on 22/3/2006 at 13:52
It's not avoiding the amount of tax you're expected to pay if you're supposed to be taxed on your net earnings.
Work income = £10
Work expenses =£4
Taxable income =£6
But if that's not how deductions are supposed to work, and the tax is supposed to be paid on everything, then it is cheating the system and the law is bad if it lets you get away with it. It's not avoidance if it's not paying things that you're not supposed to pay. It's only avoidance if really, you should have been paying it but you've found a way around it.
Convict on 22/3/2006 at 14:19
Where are you getting this? I might be wrong but I think that any form of legal tax minimisation is called tax avoidance. E.g. giving money to charity and reducing the amount of tax you pay is IMO tax avoidance.
Myoldnamebroke on 22/3/2006 at 14:29
I was responding to the idea of 'unacceptable avoidance' implying that some avoidance was acceptable. I'd take the view that all avoidance - unless specifically legislated for, in which case I would have though 'exemption' would be a better word - should be unacceptable.
scumble on 23/3/2006 at 10:13
The trouble with complex legislation is that it's often badly written and what decides various legal disputes is case law, and you have to make a gamble on how the courts may decide an issue. You may well find that the law is so difficult to interpret, it would be difficult to say what "unnaceptable avoidance" was, or if it was actually happening.
Laws are only any good as long as people will follow it and it's possible to enforce, although the enforcement aspect is down to the government's capacity for violence (arresting and punishing people). To enforce the law (legislation) down to the last detail would require a totalitarian regime, because it is impossible to predict what people will do unless you herd them about like sheep. To take a silly example, if a law was passed (and it could be in the UK, technically) that people had to wear green hats on thursday, it would take a huge effort to make sure people actually did wear green hats on thursday. One can imagine a hotline for people reporting others for not wearing a green hat. It's not far removed from what some people have lived under.
After a certain point people have to simply disregard bad laws (like poll tax etc.) - there are no end of them on the books that are effectively pointless. It's just a shame that the political system isn't very good at cleaning up the thousands of words of nonsense cluttering up the legal system, which consequently provides for a good living for lawyers.
With reference to tax, that was supposed to be illustrating why tax "avoidance" is more likely to be a result of badly conceived tax laws than people being naughty as such, which is what you probably just said above...
