Oh dear, don't you just "love" politicians and the way that they twist things to suit their mood?
David Gauke, the Exchequer secretary to the Treasury, gave a speech on Wednesday at the annual ICAEW Hardman Memorial Lecture.
Gauke said that he knew that tax advisers often got frustrated with people conflating legitimate tax planning, avoidance and evasion. However, he said that the government was looking to clamp down on avoidance and would use the "bonfire of the the tax reliefs" (my words, not his) as a means to that end.
He tried to mollify his audience by saying that the government is really only trying to target instances where reliefs and exemptions are used in a "highly artificial way".
He would say that, wouldn't he?
However, as per Accountancy Age:
"There's also times when it's perfectly clear what the law intends - where reliefs and exemptions are then used in a highly artificial way.
In these instances, people use their resources - and their talents - to twist the law and create results that everyone knows are simply too good to be true."
Dare I say that as the law is made by parliament, theoretically on the basis of advice by HMRC, that it is up to the politicians to create legislation that is clear and not open to being "twisted"?
Sadly, most especially as there is a £4.8 Trillion debt, the law will be interpreted by HMRC and the politicians in the way that suits their purposes best. This is why (despite whining from Gauke et al) taxpayers need tax advisers to use their skills, talents and resources to their very best.
Tax does have to be taxing.
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'tax planning', 'tax avoidance', 'tax evasion' - all essentially boil down to 'paying less tax'
ReplyDeletetax reliefs are introduced for specific purposes, usually to boost certain industries, and are then jumped on by 'tax professionals' and used to let their (usually) wealthy clients, who suddenly develop an 'interest' in these industries, pay less towards the upkeep of the country than is their alloted share
your argument that politicians should draft better legislation so that tax professionals can't 'twist' it to their own ends is equivalent to an argument that a homeowner shouldn't buy glass that can be broken to stop thieves breaking in and stealing the telly, sorry 'purchase avoidance'.
"Everybody should use every legal method available to them to minimise their tax bill. Even if it goes against the spirit of the tax rules."
ReplyDeleteI make this statement because too much tax payers money is wasted by the public sector. I am not singling any particular department out here as I am sure they are all as bad as each other.
12:56, your analogy is crap as using loopholes/tax relief's to reduce your tax bill is not illegal. Breaking into peoples homes is
When those at the bottom do it (with comparatively little effect on the overall tax take), it's called "tax evasion" and the perpetrators end up bankrupted, fined or imprisoned.
ReplyDeleteWhen those further up who can afford sharp shyster accountants do it, it's called "tax planning" or some such obfuscatory PR euphemism, and we're expected to applaud it, even though it has a far greater effect on tax revenue.
Ethically, it's the same thing: either both are cheats, or neither of them are.
You keep your ethics and I will keep as much of my money as I legally can. That way I can travel first class on the train like Strathie does.
ReplyDeleteFYI:
ReplyDeletehttp://www.thesun.co.uk/sol/homepage/news/3237944/Tax-boss-Dame-Lesley-Strathie-453-first-class-jaunt.html