The Politics Thread

[Prufrock]

Aye, "tax avoidance" means things that are technically legal but against the spirit of the laws. That clearly doesn't apply to ISAs.

If something is "technically legal", does that constitute legal, or illegal?

Legal, although accidentally so. It's an old con trick though to try to justify what is legal as being that which is moral. You have to justify what you think is moral, win that argument, to argue what should be legal. You can't take what is legal and on that basis argue what is moral.

Aye, "tax avoidance" means things that are technically legal but against the spirit of the laws. That clearly doesn't apply to ISAs.

I agree that tax avoidance may raise moral questions, but not legal ones. Governments wasting tax dollars also raises moral questions. Further, governments can change the law and close loopholes. We are entitled to use the law to our advantage and the United States Supreme Court has stated that "The legal right of an individual to decrease the amount of what would otherwise be his taxes or altogether avoid them, by means which the law permits, cannot be doubted." I know nothing about ISAs, but we have tax free savings accounts (TFSAs) in which can put certain sums per year - is this similar?

To say that tax avoidance is not illegal is tautological.

Yeah, they sound like our ISAs (or "so-called ISAs" as the BBC now call them).

[Bruce Rioja]

I merely responded to your argument that offshore tax havens are just ISA's for million and billionaires. Which has to be the most ridiculous thing I have seen.

Come on. I'm waiting, with your "most ridiculousness" and all of that stuff. Where is it?

[Montreal Wanderer]

Same thing Monty. Though I think we're in danger of letting the tail wag the dog if we allow the judiciary to decide national taxation policy.

The judiciary only decide on the interpretation of law - legislators still write (and rewrite) the laws and regulations. With our TFSAs the previous government increased the annual amount we could put in from $5500 to $10000. The current government has cut it back to $5500 because the larger amount was of too much benefit to the well off (disregarding the fact that the poor are the ones spending hundreds a month on the government lotteries instead of saving)..

[Bruce Rioja]

Monty - we had a presentation from the Yanks this morning. Does the word "Acoustical" actually exist?

[KeyserSoze]

[Enoch]

Monty - we had a presentation from the Yanks this morning. Does the word "Acoustical" actually exist?

Doesn't sound right.

[Lord Kangana]

I think its also erring on the side of dangerous to allow the judiciary to interpret the law in anything other than the way it was intended. I do not believe that taxation is for an individual to decide, nor do I believe that legislation postulates that interpretation.

The very notion of taxation itself crumbles (and in my opinion ordered society in its current guise) if we allow individuals to opt in and out as they see fit.

[Prufrock]

Well I'm glad you've settled that now all they've got to do is make decisions based on what parliament intended. That should make things nice and easy!

[Lord Kangana]

Surely the intention is for people to pay tax?

[Worthy4England]

Thank fck I keep all mine under the bed....(in my Bermudan holiday home)

[Prufrock]

Surely the intention is for people to pay tax?

I think it might be a little more complicated than that.

[Montreal Wanderer]

Monty - we had a presentation from the Yanks this morning. Does the word "Acoustical" actually exist?

There appear to be some 10,000,000 hits for the word on google, including the Acoustical Society of America and the Canadian Acoustical Association. However, I believe the Shut-eye Acoustical Shutters Co., an American concern, are marketed in England as Acoustic window blinds. So it exists but perhaps not in Blighty.

[Lord Kangana]

Surely the intention is for people to pay tax?

I think it might be a little more complicated than that.

So loopholes in legislation aren't actually loopholes but were purposefully legislated to allow the wealthy to benefit?

[Prufrock]

Erm, no. It's not as simple as s.1(1) of the Tax Act, "pay some tax". They don't write a list of every single financial product on the market with a percentage next to it. You write a law, then a new product comes along. How do you figure out parliament's intention towards something that didn't exist when they wrote the law? If you could just wire that down there's a few folk would be very grateful.

[bedwetter2]

Erm, no. It's not as simple as s.1(1) of the Tax Act, "pay some tax". They don't write a list of every single financial product on the market with a percentage next to it. You write a law, then a new product comes along. How do you figure out parliament's intention towards something that didn't exist when they wrote the law? If you could just wire that down there's a few folk would be very grateful.

Perhaps very simplistic but would it be possible for tax law to prevent the creation of new "financial products" which may be thought up by the very creative avoidance "industry" after the event? You see, I have a problem with financial or allied institutions being named as part of an industry or their their promulgation of products which are no such thing in my opinion. The shysters and those of dubious parentage in the banks, offshore fund managers et al may lose some of their jobs as a result of outlawing their practices but I wouldn't shed a tear.

[Enoch]

I think it might be a little more complicated than that.

Can't be that difficult, they've got it all nailed down in Shangri-La.

[Bruce Rioja]

I merely responded to your argument that offshore tax havens are just ISA's for million and billionaires. Which has to be the most ridiculous thing I have seen.

Come on. I'm waiting, with your "most ridiculousness" and all of that stuff. Where is it?

Nope nothing. Not a peep. You should get out more often because that's exactly what they are. I take it that you have an ISA. And where exactly did I mention "million and billionaires", Hyperbole Boy?

[Worthy4England]

The problem isn't just at one end of the tax scale - it's all over it. From the end that allows people not to work and claim benefits, through those folks that work and maybe don't declare all their earnings because they get cash in hand and up to the higher end, where money is allowed to move about outside the sight of Mr and Mrs Taxman and Corporations move stuff to where they pay the least. If we're on a crusade to ensure that folks pay the tax due, then we need to sort all of it out not just one part of it. Realistically all those groups are "picking" how much tax they want to pay.

[Beefheart]

Erm, no. It's not as simple as s.1(1) of the Tax Act, "pay some tax". They don't write a list of every single financial product on the market with a percentage next to it. You write a law, then a new product comes along. How do you figure out parliament's intention towards something that didn't exist when they wrote the law? If you could just wire that down there's a few folk would be very grateful.

Perhaps very simplistic but would it be possible for tax law to prevent the creation of new "financial products" which may be thought up by the very creative avoidance "industry" after the event? You see, I have a problem with financial or allied institutions being named as part of an industry or their their promulgation of products which are no such thing in my opinion. The shysters and those of dubious parentage in the banks, offshore fund managers et al may lose some of their jobs as a result of outlawing their practices but I wouldn't shed a tear.

If you come up with a scheme, you tell HMRC about it. If HMRC think your scheme is bollocks they'll take you to court, if HMRC wins anyone who has money in the scheme is liable to pay tax on it. If HMRC loses and doesn't like it they might seek to have the law changed.

The way to look at aggressive avoidance or 'loopholes' is that they are actively seeking to circumvent what is considered to be illegal, which is why the 'it's just the same as an ISA' argument is a load of bollocks. That's a specific government scheme which offers a tax break to encourage saving. It also has a limit to how much you can save in tax, it's fundamentally different. A lot of these schemes exist for the sole purpose of avoiding tax.

Having said that, I don't think this stuff the pig shagger has been embroiled in is the sort of tax avoidance we need to worry about. It's more the abuse of transfer pricing etc that means a company can shift profits to a tax haven and avoid corporation tax. Apparently it terms of total cost to the exchequer the biggest source of tax avoidance/evasion is from the self-employed and small business owners.

[Worthy4England]

Erm, no. It's not as simple as s.1(1) of the Tax Act, "pay some tax". They don't write a list of every single financial product on the market with a percentage next to it. You write a law, then a new product comes along. How do you figure out parliament's intention towards something that didn't exist when they wrote the law? If you could just wire that down there's a few folk would be very grateful.

Perhaps very simplistic but would it be possible for tax law to prevent the creation of new "financial products" which may be thought up by the very creative avoidance "industry" after the event? You see, I have a problem with financial or allied institutions being named as part of an industry or their their promulgation of products which are no such thing in my opinion. The shysters and those of dubious parentage in the banks, offshore fund managers et al may lose some of their jobs as a result of outlawing their practices but I wouldn't shed a tear.

If you come up with a scheme, you tell HMRC about it. If HMRC think your scheme is bollocks they'll take you to court, if HMRC wins anyone who has money in the scheme is liable to pay tax on it. If HMRC loses and doesn't like it they might seek to have the law changed.

The way to look at aggressive avoidance or 'loopholes' is that they are actively seeking to circumvent what is considered to be illegal, which is why the 'it's just the same as an ISA' argument is a load of bollocks. That's a specific government scheme which offers a tax break to encourage saving. It also has a limit to how much you can save in tax, it's fundamentally different. A lot of these schemes exist for the sole purpose of avoiding tax.

Having said that, I don't think this stuff the pig shagger has been embroiled in is the sort of tax avoidance we need to worry about. It's more the abuse of transfer pricing etc that means a company can shift profits to a tax haven and avoid corporation tax. Apparently it terms of total cost to the exchequer the biggest source of tax avoidance/evasion is from the self-employed and small business owners.

If you look at the "Company avoids Corp Tax" angle then that's no different in terms of tax avoidance - the additional tax they're avoiding goes somewhere in terms of profit - maybe to the beneficiaries of the company that's been set up - which may or may not be transparent if they're using nominee directors and bearer shares etc...