We know who will be frotting himself senseless over this

Britain’s wealthiest people owe the taxman as much as £1.9billion, the National Audit Office has found in the wake of Theresa May’s pledge to crackdown on tax avoidance.

The spending watchdog said that one in six of Britain’s 6,500 wealthiest individuals have used tax avoidance schemes and admitted that HMRC has found investing whether they are paying the right amount “challenging”.

The use of a tax avoidance scheme does not show that tax is ue. Some forms of tax avoidance do actually work, after all.

19 thoughts on “We know who will be frotting himself senseless over this”

  1. And “up to” is weasel words as it could mean that much, or it could mean zero. Or anything in between

  2. Just fluff. Clearly an embargoed press release that’s gone out everywhere. The Mail, Telegraph and Graun all have publication times as 00.01.

  3. Pendant alert!

    I thought frotting required two! Or should it be “frothing”?

    Investing -> investigating?

    eew is the usual spelling not “ue” (haha).

  4. It would be nice if the journo told us what the £1.9b is. Is it the total value of potential avoidance being investigated? Is it an estimate based on likely outcomes of active investigations? Is it a projection built with assumptions and pom-poms?

    The only figure that is rightly called ‘owed’ would be tax assessed and due for payment. If the unit raised £600m over the last couple of years then this £1.9m ain’t that.

  5. Hmmm… so “up to” 1.9bn is being invested in something useful (i.e. profitable) instead of being pissed up the wall by the state.

    Leave it where it is, then.

  6. No, the use of a tax avoidance scheme does not tell us that tax is due. The amounts being paid to HMRC though tell us that it very often is.

  7. My favourite tax avoidance scheme is not to do any work.

    The logical end-point of complaint by people like Ritchie and Margaret Hodge (!) about avoidance rather than evasion is the work camp. Like all forms of collectivism, it sounds mild and even reasonable to begin with but results in tyranny.

    As has been said umpteen times before, if the government wants to stop tax avoidance it should simplify the tax code and stop introducing new loopholes to be exploited by people much, much cleverer and more motivated than politicians and civil servants.

  8. What David Jones said.

    Come on Timmy, raise your game.

    Incidentally, have readers come across* the phrase uphill skiing? Someone tried it in a headline at work the other day and someone else had the wit to check a slang dictionary. And my goodness what a surprise.

    *singularly inappropriate choice of words.

  9. It would be interesting to ask some of these people in the “Sir ! Sir ! He’s not paying the tax I think he should be” camp whether they are using any tax avoidance schemes themselves. I bet most will say they don’t.
    Then ask them if they have a pension, an ISA, Premium Bonds, or … I bet the majority will have at least one workplace pension.
    Then see if the penny drops if you explain the “tax avoidance” part of (say) a pension. I bet it’s followed by lots of “but that’s different because …” justifications.

  10. @Simon

    I once did: an IT contractor I worked with was criticising tax avoiders at the height of the witch hunt.

    An IT contractor of all people!

    When I started listing tax deductions for travel expenses and food, pensions, ISAs… it was followed by lots of “but that’s different because …” justifications.

  11. @Simon

    Premium Bonds aren’t tax avoidance. They provide tax free returns. No tax is ever even possibly due.

    Pensions are a tax deferral scheme really but they, like Isas, have been explicitly designed to have tax advantages.

    You don’t have to be Murphy to understand that there are grey areas where it takes investigations and courts to consider the law and the actions of taxpayers and decide whether tax is due or not. Both sides can have valid arguments. That’s what avoidance is.. going into the grey area. It’s not something worthy of condemnation, and it’s not a thing that lends itself to snappy definitions that Richie likes. But it exists and trying to bring Isas into it is stooping to the level of the idiots.

    Most people here understand the nuances and technicalities of this stuff. That’s why it’s a fun place to play.

  12. Avoidance isn’t going into the grey areas at all. It’s an attempt though. Which always collapses down into legal or illegal. Tax compliance or tax evasion.

  13. Tim

    Only in Murph land?

    In the past, the courts used to consider avoidance as legal, and evasion as illegal.

    Even if one wants to accept (for argument’s sake) Murphy’s warped view of this world, and I don’t, or otherwise accept that the definitions may have evolved, then “always collapses into legal or illegal” (and at which point we must call it something different, ie compliance or evasion) suggests that it cannot (by definition) be either (legal or illegal).

    I’m not sure that’s formally where we are today?

  14. The obvious just struck me: put £1.9bn in context.

    Government spending in just one year (2015-16) was about £772bn.

    Over a 5-year parliament, that’d come in near enough £4 trillion.

    So Britain’s wealthiest may (MAY!) owe a total of bugger-all tax, when you put it in context of public sector spunkage.

  15. “Avoidance isn’t going into the grey areas at all. It’s an attempt though. Which always collapses down into legal or illegal. Tax compliance or tax evasion.”

    I’m not sure that is right on a technical level (is tax evasion a strict liability offence?), and it’s certainly not in practice.

    Once we know if it’s legit or not, if it carries on it is compliant/evasion. But these cases are before we know which it is. If HMRC think you’re non-compliant it does not follow that they think you are evading. And if it’s found that HMRC are right then they will not treat you as if you were evading unless they think you really were knowingly underpaying.

    I know Murphy et al don’t get this. They particularly don’t get that when ‘avoidance’ has been found to be legit it is compliant and needs a different label if they want to carry on moaning about it (ref Mr Green etc). But people do enter into arrangements that they know might not be compliant, and that’s avoidance. It’s fine to give it a go, HMRC play the game from their side and the lawyers all get paid.

    Eventually, when all the investigations have concluded and the tribunals have been held, there will be no grey area. There will only be compliance and evasion. We’re not there yet.

Leave a Reply

Your email address will not be published. Required fields are marked *