Tax and Morality

[dls]

I was always taught and accepted that there is no moral element in tax. It is up to the tax man to catch you. You do nothing unlawful, but if you can so arrange your affairs as to fall outside the taxman's lassoo, then that is his fault not yours.

I have - or had - little difficulty with that. I have just seen however a circular from a major law firm discussing the arrangements made by major international companies to minimise tax payments. It is addressed to them, so we might expect little different, but it is itself completely devoid of any sense of shame. Worse than that, it demonstrates no sense of even awareness that any questions exist beyond 'get it right' and 'lesser beings will forget all this in a couple of weeks'.

So, where is the balance?

The taxman is free to make his rules. If he fails to make rules which catch people, then he bears a substantial responsibility. You cannot ask people to go out of their way so to arrange things as to ensure that more tax is paid.


Is there a moral element to tax?

[stu1985]

No, I don't think so although the majority of the public probably do (see the outcry last week in the tabloids discussion the big companies who have minimised, if not obliterated their liability to tax in the UK). If the government really wanted to crack down on tax avoiders (and I mean really crack down, not just the empty rhetoric we hear from certain ministers) then they sure as hell could do so.

They make the rules. I'm sure they could hire the best accountants/tax lawyers to devise schemes where liability to tax could be minimised and then legislate so that the schemes are caught by the system. Until they do so, people will keep taking advantage

You can't blame people for taking advantage of the rules when the rules themselves allow so much to slip through the net. Of course it would be an evolving process as new ideas/schemes would come to light but if the government are serious about catching as many people/corporations as possible then they need to keep on top of this and act fast.

[jantra]

companies do pay tax, it may not be corporation tax, but they will pay paye, NI, VAT and business rates. Tax is a cost and it is everyone's duty to ensure they pay the correct amount of tax according to the law. society forgets that it is not tax advisers who make the rules - it is the government. HMT and HMRC have powers to change the rules. avoidance is there because the rules allow for it. it is up to the government to identify aggressive schemes and to decide if they are against the spirit of the law rather than the letter.

the issue is that some businesses are paying tax they are just not paying corporation tax in the UK

[Smouldering Stoat]

companies do pay tax, it may not be corporation tax, but they will pay paye,

I was labouring under the misapprehension that I was paying the PAYE on my salary.

[jantra]

companies do pay tax, it may not be corporation tax, but they will pay paye,

I was labouring under the misapprehension that I was paying the PAYE on my salary.

nah, it is a cost to the employer, you never see the cash.

[diy]

The issue I have is 2 companies/people making the same money should pay the same tax if they are based in the same location. That is not the case. I make similar money to a lot of my self employed friends yet I pay an order of magnitude more tax. I don't see why that can be right. However, I think this naming and shaming is wrong. We should be encouraging companies to base themselves here by competing with Ireland and Luxemburg, to make the UK more attractive.

[Smouldering Stoat]

companies do pay tax, it may not be corporation tax, but they will pay paye,

I was labouring under the misapprehension that I was paying the PAYE on my salary.

nah, it is a cost to the employer, you never see the cash.

So, if the rate of Income Tax were to double, that would be a cost to my employer?

Nah.

[atticus]

One thing that has always got my goat is that employees - the ordinary majority like most of us here - have no choice. We pay tax. The state uses our employers as tax collectors (are you reading, Jantra?). We can't fiddle, or avoid, or evade. We are always the ones who get squeezed.

[jantra]

One thing that has always got my goat is that employees - the ordinary majority like most of us here - have no choice. We pay tax. The state uses our employers as tax collectors (are you reading, Jantra?). We can't fiddle, or avoid, or evade. We are always the ones who get squeezed.

its semantics. the employer pays the tax and it is allocated to your tax account. There would be no difference if you paid no income tax/NI but the employer had to pay an increased rate payroll tax. It is a cost paid for by the employer.

All taxes paid to HMRC are done via unpaid tax collectors.

there are many ways you can avoid paying tax as an employee:pensions, investments such as EIS/VCT, childcare vouchers (if applicable), other salary sacrifice schemes

[atticus]

what are EIS and VCT, apart from unexplained TLAs?