Monday, 23 February 2009

Tax Avoidance

I am not alone in stating that using ISAS and personal allowances etc constitutes tax avoidance.

Thisismoney.co.uk state the very same thing, as per their article "Savings and Investments How to Avoid Tax".

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

5 comments:

  1. Much as I respect a website from the publishers of the Daily Mail, that's completely irrelevant. (I can also point to an article by Vince Cable in which he sets out the same argument as me: http://www.guardian.co.uk/business/tax-gap-blog/2009/feb/11/vincentcable. Oh, and by the way, the thisismoney article doesn't even mention the word "avoidance"!)

    The point is, you are trying to drag in ISAs etc to your criticism of HMRC's policy of tackling avoidance. However, when HMRC use the word "avoidance" in that context, they very definately ARE NOT referring to that sort of thing. It's simply not valid to superimpose your own different definition of a word someone uses in a statement and criticise them on the basis of your definition! It's a classic straw man argument.

    And just to reinforce my view that your definition of avoidance is nonsense, I will (again) quote Lord Nolan in the 1997 case of CIR v Willoughby:

    "the hallmark of tax avoidance is that the taxpayer reduces his liability to tax without incurring the economic consequences that Parliament intended to be suffered by any taxpayer qualifying for such a reduction in his tax"

    I ask you again, how does an ISA or a personal allowance constitute avoidance based on this definition?

    Other than citing (pretty tenuous) tabloid articles that you claim support your contention, can you please actually explain why Cable, Lord Nolan and I are wrong?

    Finally, I (again) ask you whether you think HMRC should not be addressing large-scale avoidance schemes.

    I look forward to reading your responses to these three questions in due course.

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  2. You may also want to have a look at http://www.hmrc.gov.uk/avoidance/vision-strategy.htm, which sets out HMRC's strategy for dealing with evasion (please try to resist the temptation to quote bits of it out of context, Ken!) and http://www.hmrc.gov.uk/avoidance/aag-risk-assessing.htm, which describes the indicators of avoidance that HMRC looks out for. The last point on the latter page is probably of most relevance here.

    The links from these pages to information on the requirement to disclose avoidance schemes are also useful. As I've asked before, when was the last time someone has had to disclosure the use of an avoidance scheme because they've opened an ISA or their personal allowance has been taken into account when calculating their tax liability? (You can consider that a 4th question to add to the three above.)

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  3. ...actually, while you're at it, you might do me the courtesy of responding to the other points in my response to your 17/02/09 posting (mainly that not all avoidance works and that tackling avoidance schemes does not make avoidance itself legal). You obviously disagree, so it would be nice to hear why.

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  4. You're not going to respond to the above, are you Ken?

    Please at least let me know if you're not going to, so I can stop wasting my time coming back to this page to see if you've answered. That would be a shame, of course, because I'm sure you have some strong counter-arguments and I'd be interested to read them.

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  5. Ken,

    I owe you an apology on this occasion. In my comment posted at 15:04 on 24/02/09, I wrote that "tackling avoidance schemes does not make avoidance itself legal". There was a typo: it should have read "...does not make avoidance itself illegal".

    You still haven't answered any of my questions, though!

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