Tax evasion vs. tax avoidance

Tax evasion is rightly a crime and honest taxpayers should not have to subsidise a criminal minority.  Equally, there are sensible measures - such as simplifying the tax system - that can be taken to reduce the extent to which people can plan their way around tax (and reduce the advantages accorded to those with expensive accountants).

However, we don't think that trying to blur the line between tax evasion (breaking the law in order to avoid paying tax) and tax avoidance (arranging your affairs, within the law, in a way that minimises your tax burden) is a good idea at all.  There are a number of reasons why, in practice and economic theory, such schemes turn out poorly whether you attempt to clamp down on anti-avoidance through a grand General Anti-Avoidance Principle or by encouraging the HMRC to become extremely aggresive (as has happened in recent years).

However, the basic problem is that the people who pay the highest price are never the rich foreigners that many on the left like to set up as bogeymen.  It is ordinary people.  Ex-cabbies starting up a business who haven't done anything wrong but are bankrupted for 88p, for example.  This morning we found this 1909 election poster from the excellent collection at the Bodleian library which illustrates the basic problem pretty beautifully:

Comments

[Monty Jivraj (07720813889)]

HM Revenue and Customs’ (HMRC) Extended Verification strategy is an ‘inefficient and unsustainable’ use of resources and has imposed a ‘significant burden’ on UK businesses. We ask urgently the Prime Minister and the Chancellor to take urgent action and repay businesses in UK who are suffering in the hands of HM Revenue and Customs. Even when The VAT Tribunal has ruled in favour of the appellants, HM Revenue and Customs continue to ignore the fact that its strategy is having an adverse effect on the whole telecoms industry and that a huge number of innocent businesses have been brought to their knees financially as a result because they cannot simply fight an organisation as large and powerful as HM Revenue and Customs and the firms are hugely affected to the extent it will be extremely difficult to start rebuilding their shattered and destroyed business once more.

We ask you to please instruct all your employees, colleagues and the directors of the company sign the petition individually.

Please fill the petition with your correct name and the company name you represent. For example – John Smith – A Telecom Ltd. (In previous petitions it has not been possible to use the data as only names were added – not the companies they represent.)

Additional Information

To assist us put together a detailed response; please also complete this Web Form with all details.

The link to the web form is - http://www.ipt.cc/WebPetition/index.html

The link to the petition is - http://petitions.pm.gov.uk/InputTax/

Please do not hesitate to contact me should you require any assistance.

Tel: 0845 450 0550
Fax: 0845 450 0551
Mobile - 07720 813889
Email - MJivraj@ashtonlawllp.co.uk

[Hardeep_Singh]

Comments regarding tax simplification though refreshing to hear are going to fall on deaf ears as far as the government is concerned. It is so cash strapped and in a panic about almost every aspect of the economy that it's too busy clutching at anything to get them out of this mess than listen to sensible and reasonable debate such as tax simlification.

The issue about the lower rungs of the socio-economic ladder bearing the brunt of tax policies rather than the wealthy is well illustrated and even government knows this. However they are more than comfortable to claim they are the champions of the poor, nothing could be further from this hypocritical truth. As for the HMRC bulldog being let out of it's cage to harass anyone that dares walk past it's front gate, this is not the way to endear people to your cause and will only lead to an increased occurence of tax evasion.

This is an ever tightening spiral that's now beginning to self perpetuate, what a mess this government has got us into!

[Steve Robson]

Of course the reality is that low taxation benefits the rich, as they do not use public services. They cleverly bankroll and con people on lower incomes to support organisations like the TPA, which are actually against their own interests, while the rich hide in the shadows letting the poor do their dirty work.

I would agree that the burden of taxation should be shifted more onto the rich and better off, but I disagree that the overall burden is too high. Clearly more progressive taxes would be better, but surprise surprise the TPA opposes progressive taxation. That's because the TPA is bankrolled by the rich and staffed by a bunch of alike looking geeks who expect one day to be rich themselves.

[Hardeep_Singh]

Far from it Steve, I am by no means rich but one things for sure I work for my money and I want to keep it. I do not believe I work to give it up in high taxes, I'm sorry that's something I just can't afford to do. I have a son and daughter and it's their future that's directly effected if so much of my money is taxed.

The concept of tax is fine and one of life's 'realities' but as with everything else there needs to be a balance and at the moment that's way out of place. The keyword 'rich' can be used in the same breath as 'poor' because it's a relative term. But this romantic notion that somehow the poor are entitled to money as some kind of civil right is ludicrous. There should be a fair system to help our fellow members in society that are somewhat languishing but to fund an entire lifestyle, why? Immigrants can come to these and the shores of numerous other industrialised nations with almost nothing in their pocket and stomach yet they make it happen. I realise that such a dynamic perspective is alien to some but we can't all be held back for the sake of the last guy.

There are alot of low tax nations where the poor get a chance to be share part of the country's greater success, so why not here.

I don't mind if you and all those who think along the same lines as yourself wish to give up extra tax but then equally nor should those who don't want to subscribe to such a notion.

Ultimately it's fairness and nothing else, pair a practical, balanced and justified tax within a well adminsitered system.

[Anthony Thomas Flynn]

To consider any Taxation fair, it must not start at a level of income less than the cost of living plus 100%. Once you take the very low paid out of the argument, it is but a simple affair to fix a rate that allows for small government and minimum spending.
And in addition to that, it also allows for minimum administration and a Legislature that is also cut to the bone. I would suggest just four MPs to each of the 43 English Counties, making a total of only 172 English Members. Scotland, Wales and N.Ireland must make their own arrangements.
In this situation, a one off rate of Direct Taxation set at 10% to 16% and no more would be more than adequate.
And remember, this can be Legally achieved today in Britain.
Regards, ATFlynn, "Norfolk's Mutineer"