OT. The futures Bright, the Futures Brexit!!!

[ramAnag]

Let us discuss tax evasion, which is illegal, I think we have established that if a trader turns up on our doorstep and quotes £100 plus £20 vat or £100 for cash, we would go for the cash option. Why? We do not NEED that £20 and would probably try to justify it by saying everyone else gets away with it. So lets be honest with ourselves we are being greedy and as a result , we are illegally avoiding paying £20 in tax. As a result the trader is also avoiding paying income tax and employees and employers NI, which results in about another £50 in tax. Now we have shown that we are greedy and are willing to illegally avoid paying tax, wouldn't it be logical to assume that if any of us were to rise to the fortunate position of earning large sums of money, that we would also find ways of not paying tax, but importantly legally not paying it?

Just because we do it in small amounts, it doesn't make it right. If it does, please let me know the exact figure at which it's not right.

Of course it doesn't make it 'right', it's breaking the law but it's all about example and if Joe Public is having, hypothetically, an extension built he is perhaps unlikely to avoid the vat on materials but may well be able to save 20% of the Labour charge which could be a very significant amount of money. I'm not saying it's 'right' but given the example set by politicians - remember the expenses fiasco - individuals and corporations I honestly no longer blame old 'Joe'.

I genuinely feel that we, society, have lost our moral compass on this issue but perhaps a better comparison with benefit scroungers is tax avoiders rather than evaders. At the risk of being anecdotal I have a self employed friend - no names no pack drill - who I like and respect very much. He ticks all your boxes of being extremely hard working and never claiming any benefit whatsoever in the whole of his forty year working life. I also know that, courtesy of his accountant, he paid no income tax whatsoever two years ago and very little last year. He enjoys a good standard of living and decent holidays to places much more exotic than your example of 'cheap as chips' Benidorm. Is there really that much difference between your example and mine?

[roger_ramjet]

Of course it doesn't make it 'right', it's breaking the law but it's all about example and if Joe Public is having, hypothetically, an extension built he is perhaps unlikely to avoid the vat on materials but may well be able to save 20% of the Labour charge which could be a very significant amount of money. I'm not saying it's 'right' but given the example set by politicians - remember the expenses fiasco - individuals and corporations I honestly no longer blame old 'Joe'.

I genuinely feel that we, society, have lost our moral compass on this issue but perhaps a better comparison with benefit scroungers is tax avoiders rather than evaders. At the risk of being anecdotal I have a self employed friend - no names no pack drill - who I like and respect very much. He ticks all your boxes of being extremely hard working and never claiming any benefit whatsoever in the whole of his forty year working life. I also know that, courtesy of his accountant, he paid no income tax whatsoever two years ago and very little last year. He enjoys a good standard of living and decent holidays to places much more exotic than your example of 'cheap as chips' Benidorm. Is there really that much difference between your example and mine?

I have to take issue with your anecdote Mangara. They say never judge a person until you have walked a mile in his shoes, and if you then decide to hate him you are at least a mile away and have got his shoes too.

Neither you nor I know the ins and outs of your friend's business, and it may well be that, for example, he has made substantial pension fund contributions over the last couple of years (realising that he does not have the benefit of a gold plated teacher's index linked pension!). This would be eminently sensible, result in him significantly reducing his current tax bill and create a future private income stream in his dotage: at which point it would, subject to conditions, be taxable as drawn down. Nothing illegal, all within the rules and he would be acting socially responsibly in investing in his future, and reducing his potential burden on the state care system when he can no longer work.

What his accountant is doing is ensuring that your friend is not paying TOO MUCH tax - ie he is paying the correct amount, as opposed to too much through ignorance of the rules. He is avoiding overpaying by structuring his finances within the rules and this may also mean all he is doing is deferring tax.

Avoidance of tax, by definition of the word, is ensuring that you do not pay too much and seems sensible to me. Evasion means paying too little and is unacceptable, cheating, whatever you care to call it. There are fine lines between the two, granted, but if no rules or laws are broken then you surely can have no beef with your friend. Your beef must be with those who create the rules - our parliamentary representatives.

Same thing for people on benefits - there is a fine line between "benefits scroungers" and "benefits cheats" - the former may operate within the rules and make claims accordingly: you cannot throw mud at them for doing it - blame those that create the rules, not those who abide by them and claim legitimately. Again you may not like the rules, so address the rules that allow people to "earn" more by not working.

Your benefits scroungers and your tax avoiders live in the same camp. Your benefits cheats and your tax evaders also inhabit the same moral space as one another. You might not like to see someone stashing money in a pension fund to get the tax edge; I might not like to see a fast breeder single mother having another child to get a bigger free council house. But if both stay within the rules we have to suck it up and address those rules somehow.

[ramAnag]

With respect Rog, I do actually know rather more than you make out about my friends business. I've also done some work for him on occasions. All very 'black economy' back pocket stuff, probably as much because the complexities of actually declaring such income are just too great as much as anything else. Equally there have been times when, in my professional capacity, I've put in far more hours than could have been reasonably expected so I guess it works itself out.

All that's beside the point though...what is the moral difference between those who claim benefits and those who don't pay their way via taxation? Speaking personally I'm the tiniest of small fry but since school and student days until very recently I have done some undeclared cash in hand work. As you say yourself, this is about the finest of fine lines...but what is the moral difference between benefit scroungers/cheats and those who don't pay all the tax they owe and can you honestly say that there are no times when the accountancy business is actually complicit in legalised 'fiddles/scams'? Legality and morality are not always synonymous.

[Ram59]

There is a massive difference between the scroungers and those who don't pay enough tax. We all make up a society and live together on this planet for a few years. During their lives the tax scrounger has no intention of contributing in any way at all to this society and thinks that everyone else is put on this earth to look after them. The rich people make more than any of us and find ways to avoid paying what we consider is their fair share. They, however, probably believe that because they already pay more than the rest of us, that they have already paid enough.

For society to work, we all should be prepared to give and take, scroungers are only prepared to take.

Hand on heart, if I was getting vast sums of money, I don't know whether I would employ a clever accountant.

[ramAnag]

Suspect you mean 'benefit scrounger' and 'tax scrounger' was a Freudian slip, but we're back to 'visibility' again. You seem to take offence only at what you can see around you, but supposing a self employed businessman made a very good living but then made it even better by employing a 'clever accountant' to find loopholes that meant he avoided paying the taxes he owes. Why is that so much better...because he lives in Self Employed Avenue rather than Benefit Street?

[roger_ramjet]

You cannot avoid paying taxes you owe. You can only evade them. If you can legally avoid then then you do not, and never have, owe(d) it.

[ramAnag]

You cannot avoid paying taxes you owe. You can only evade them. If you can legally avoid then then you do not, and never have, owe(d) it.

Pedant. Typical accountant, stop hiding behind semantics and address the morality issue.

[roger_ramjet]

You do realise that as part of the ICAEW induction procedures you are required to hand in your morals?

[ramAnag]

Always suspected it... seems much the same for politicians and lawyers...I rest my case.

[Ram59]

Pedant. Typical accountant, stop hiding behind semantics and address the morality issue.

It seems to me me that your morals are 'it's OK to steal a bit of money but not too much '. Is it OK to give someone a black eye, but not fracture their skull. Your bit of 'black economy' is a posh word for stealing. If you're living in a greenhouse don't throw stones.

[Andy_Faber]

Pedant. Typical accountant, stop hiding behind semantics and address the morality issue.

The morals are all the same - the businessman/corporation aims not to pay penny one more than he/it legally has to, the scrounger aims to claim every penny it legally can. Both are equally immoral/ammoral

The two main differences -

the order of magnitude for the businessman/corporation is greater

The scrounger inputs zero into the economy

The irony is, if the scrounger could only 'see the future' and invested in training, self-sacrifice and in general not being such a scroat he/she could be in the realms of the businessman in due course.

[Andy_Faber]

you would. You'd be daft not to. Imagine telling your life/partner/friend/us 'I gave HMRC £100,000 more in tax than I needed to, but its OK because I saved the £5,000 that a tax accountant would have cost me'.....

[ramAnag]

It seems to me me that your morals are 'it's OK to steal a bit of money but not too much '. Is it OK to give someone a black eye, but not fracture their skull. Your bit of 'black economy' is a posh word for stealing. If you're living in a greenhouse don't throw stones.

Hang on a moment Ram...I don't think I'm actually the one 'throwing stones'. I'm simply being honest...I've never fiddled or avoided tax in my life but I have done some cash in hand jobs and I have, on occasions, paid cash for jobs I've had done.
You started all this by adopting the high moral ground over your snooker playing acquaintance. I get where you're coming from in that instance, but there's no point in getting all feisty with me just because I've posed two moral questions - 1) Is there any real difference between making the most of the benefits system and avoiding tax by paying or receiving cash? 2) Are there no instances where the fine lines between 'loopholes' and evasion are blurred by the clever complicity of certain accountants?
By the way...the only 'benefit' I have ever claimed has been child benefit/allowance but then I've been fortunate and never been out of work. Seems to me you might be the one throwing stones...but very selectively and only at the windows on 'Benefit Street'.

'Is it okay to give someone a black eye but not fracture their skull?' Not sure I understand the point but, I think we'd all agree...it's certainly better.

[Trickytreesreds]

Suspect you mean 'benefit scrounger' and 'tax scrounger' was a Freudian slip, but we're back to 'visibility' again. You seem to take offence only at what you can see around you, but supposing a self employed businessman made a very good living but then made it even better by employing a 'clever accountant' to find loopholes that meant he avoided paying the taxes he owes. Why is that so much better...because he lives in Self Employed Avenue rather than Benefit Street?

I agree ramanag with this hardheartedly.

I think my gripe is, when I walk in the local and see the same doleites in there everyday.
They are supposed to be living on benefits for necessities. It is supposed provide help for those who need it.
Unfortunately, it has become a "career" to some and I fund it. That isn't right and has to stop.
It's probably why I take my stance on cheap labour from abroad. These scammers should be forced into these jobs or they get nothing.
What we have created(especially Labour), is a culture of happy with less and as long as someone else pays for it, I'm happy.
This is where I would throw some serious money into career enforcement. Advisers who match candidates to jobs.
Any thing we then need to fill, comes from the movement of Labour.

Your points about the rich and corporate are valid and do need addressing. I feel they are a separate argument though.
For a change I am in agreement with you in the main.

[ramAnag]

Well there's a turn up Tricky.
Seeing as we keep returning to people in the pub, I'll get anecdotal just one more time to make this point. There's a guy in my old local who I used to know well. Runs his own small business in Derby, 'hail fellow well met' sort of chap. Former Rotarian or Round Table member...one of those 'you scratch my back...' groups anyway. Always kept banging on about, despite owning his own business, how 'poor' he was and how he could only afford to pay himself about £11,000 per year.
Owns a £400,000 house on a big plot, couple of horses etc but claims family income supplement...or certainly used to.
What's actually happened is that, in collusion with his accountant - because frankly he's too thick to have come up with this on his own - he 'appears' to only have a salary of around £11,000 but it's absolute bollux. That's his declared income and I know for certain that he earns considerably more and has a number of other 'nice little (untaxed) earners' on the side.
To me he is 100% as bad as the more stereotypical benefit cheats, quite possibly worse, but because he's middle class, mixes in more affluent rural circles and doesn't venture into Tesco in his pyjamas - no I don't think people should either - he isn't stigmatised.
I'm not for one moment defending scroungers but I wonder how many of the self employed are 'at it' in this way...I doubt he's an isolated or extreme case.