The Political Thread

[Jim_Campbell]

He's not a bank, he's not an MP, he didn't break the law.

Quite. Many people on this forum are self-employed, or have to fill out a self-assessment form or file a return because of a second job. If your accountant/financial advisor came to you and said: "You know what? You're paying more tax than you need to. I can heavily reduce your annual tax bill and do so 100% legally" how many of us would reply: "Ooh, no -- I like paying all this tax, thankyouverymuch..."?

Cheers

Jim

[Frank]

Many people on this forum are self-employed, or have to fill out a self-assessment form or file a return because of a second job. If your accountant/financial advisor came to you and said: "You know what? You're paying more tax than you need to. I can heavily reduce your annual tax bill and do so 100% legally" how many of us would reply: "Ooh, no -- I like paying all this tax, thankyouverymuch..."?

Radio Fours More Or Less tried their best to get to the bottom of whether all the thousands of folk with window cleaning rounds who weren't declaring their full (relatively modest) incomes to HMRC were costing the exchequer more or less than all the large corporations who employed armies of accountants to minimise their tax profile - and came to the conclusion that it worked out roughly the same.

[The Prodigal]

Many people on this forum are self-employed, or have to fill out a self-assessment form or file a return because of a second job. If your accountant/financial advisor came to you and said: "You know what? You're paying more tax than you need to. I can heavily reduce your annual tax bill and do so 100% legally" how many of us would reply: "Ooh, no -- I like paying all this tax, thankyouverymuch..."?

Radio Fours More Or Less tried their best to get to the bottom of whether all the thousands of folk with window cleaning rounds who weren't declaring their full (relatively modest) incomes to HMRC were costing the exchequer more or less than all the large corporations who employed armies of accountants to minimise their tax profile - and came to the conclusion that it worked out roughly the same.

Would love a look at some of those figures.

[Jim_Campbell]

[Radio Fours More Or Less tried their best to get to the bottom of whether all the thousands of folk with window cleaning rounds who weren't declaring their full (relatively modest) incomes to HMRC were costing the exchequer more or less than all the large corporations who employed armies of accountants to minimise their tax profile - and came to the conclusion that it worked out roughly the same.

I managed to miss that, and I'm usually an avid listener to 'More Or Less' ...

Of course, there's a key difference between undeclared income from window cleaning and, ahem, minimised corporation tax payments. Note that I am not saying that any form of tax fiddling is right and proper, but...

The hypothetical window cleaner will put that money back into the UK economy, where it will help to sustain jobs and where HMRC will, at least, stand a chance of getting another crack at it in the form of VAT. Money that would otherwise have gone in corporation tax is almost without exception spirited away to offshore tax havens, where it will do not the slightest good to the UK economy, unless and until some of it comes back to UK shareholders in the form of dividends (which are then quite likely to be immediately hurried offshore again to minimize the tax liabilities of the shareholders).

Cheers

Jim

[TordelBack]

Very interesting, but it does seem quite hard to believe that the Black/Grey Economies can compete with the incredible figures for completely legal corporate tax minimisation.  When I have personally paid more tax than all Starbucks' 25 Irish outlets combined over the period 2005-2012 - and I've had effectively no taxable income since 2010 - well, that's a lot of window cleaning! 

[Tiplodocus]

Quite. Many people on this forum are self-employed, or have to fill out a self-assessment form or file a return because of a second job. If your accountant/financial advisor came to you and said: "You know what? You're paying more tax than you need to. I can heavily reduce your annual tax bill and do so 100% legally" how many of us would reply: "Ooh, no -- I like paying all this tax, thankyouverymuch..."?

Not quite. But when I was a contractor, I didn't pay myself a tiny wage and then pay the rest in huge director dividends (a common way of avoiding paying NI contributions) because it just felt wrong.  I think they changed the rules since to catch people who were doing this.

[Professor Bear]

Radio Fours More Or Less tried their best to get to the bottom of whether all the thousands of folk with window cleaning rounds who weren't declaring their full (relatively modest) incomes to HMRC were costing the exchequer more or less than all the large corporations who employed armies of accountants to minimise their tax profile - and came to the conclusion that it worked out roughly the same.

My issues with this comparison would be that such undeclared income is a largely imaginary variable, not a constant.  Without a set and specific number of window washers, fees charged, and number of times services are employed by home owners or deployed by providers, I would go so far as to say the nigh-impossibility of nailing down the actual figures in this instance renders conclusions drawn anecdotal at best.

Of course, it also begs the question "do I actually give a monkeys if a white van driver keeps all the money he's earned when he already pays tax for all the accouterments of his trade?" (if he uses a van he already pays road tax, if he uses sponges or cleaning products he already pays VAT during their purchase, and so on)  I don't think I do.  Taxing everything he owns and does and then demanding tax on top of that for his efforts smells a bit feudal to me.

[Stan]

Alex Jones is on CNN tonight and has already got himself in trouble with the TSA. Usually I wouldn't lower myself to watching Piers Morgan but you'd think there'd be a good chance of someone kicking off.

[Frank]

Would love a look at some of those figures.

I remember the feature playing out a couple of months ago, but I've had a look through the More or Less podcast archive, and I can't see one with anything about tax avoidance/evasion in the title from that time (i) - so that's me reached the limits of my research skills. What More or Less does is test the credibility of statistics published in the media, and googling reveals that The National Audit Office put out a press release in November (ii) making claims regarding the scale of tax avoidance (iii), so I suppose that's what they were discussing.

It's important to note that the program wasn't undertaking its own investigation, but trying to understand how The National Audit Office arrived at its published estimates. Off the top of my head, I seem to remember the professor they asked to look into the figures (a real professor, not an ursine professor) called it something like 2.3 billion p/a for Del Boy and 2.5 billion p/a for Mark Zuckerberg. Their methodology, or my memory's bastardised version of it, was to take the total declared income of first small businesses then big businesses, work out what the tax paid on each should come to, subtract those (and all other relevant sources of wealth) from UK GDP, and the difference between the two figures is the amount lost to tax avoidance each year.

The program examined the problems associated with the methodology used by the NAO, and all the other factors which needed to be taken into account, but seemed reasonably confident about the relative proportions of the amount lost to avoidance by small and large businesses. This bit of TUC dogma (iv) arrives at hugely different numbers, but similar proportions.


(i) which makes me think I might actually be remembering the programme's presenter, Tim Harford, in one of his appearances on Eddie Mair's PM

(ii) Daily Mail, BBC news

(iii) my example of the window cleaner's undeclared income would constitute evasion

(iv) http://www.tuc.org.uk/economy/tuc-14238-f0.cfm

[JOE SOAP]

Alex Jones is on CNN tonight and has already got himself in trouble with the TSA. Usually I wouldn't lower myself to watching Piers Morgan but you'd think there'd be a good chance of someone kicking off.

Watching two cunts cancel each other out can leave one feeling neutral.

[The Prodigal]

Would love a look at some of those figures.

I remember the feature playing out a couple of months ago, but I've had a look through the More or Less podcast archive, and I can't see one with anything about tax avoidance/evasion in the title from that time (i) - so that's me reached the limits of my research skills. What More or Less does is test the credibility of statistics published in the media, and googling reveals that The National Audit Office put out a press release in November (ii) making claims regarding the scale of tax avoidance (iii), so I suppose that's what they were discussing.

It's important to note that the program wasn't undertaking its own investigation, but trying to understand how The National Audit Office arrived at its published estimates. Off the top of my head, I seem to remember the professor they asked to look into the figures (a real professor, not an ursine professor) called it something like 2.3 billion p/a for Del Boy and 2.5 billion p/a for Mark Zuckerberg. Their methodology, or my memory's bastardised version of it, was to take the total declared income of first small businesses then big businesses, work out what the tax paid on each should come to, subtract those (and all other relevant sources of wealth) from UK GDP, and the difference between the two figures is the amount lost to tax avoidance each year.

The program examined the problems associated with the methodology used by the NAO, and all the other factors which needed to be taken into account, but seemed reasonably confident about the relative proportions of the amount lost to avoidance by small and large businesses. This bit of TUC dogma (iv) arrives at hugely different numbers, but similar proportions.


(i) which makes me think I might actually be remembering the programme's presenter, Tim Harford, in one of his appearances on Eddie Mair's PM

(ii) Daily Mail, BBC news

(iii) my example of the window cleaner's undeclared income would constitute evasion

(iv) http://www.tuc.org.uk/economy/tuc-14238-f0.cfm

Stan that's one heckua' comprehensive reply. Thanks fella.

[Professor Bear]

For the record, I am a real professor.  Of bears.

[Jim_Campbell]

For the record, I am a real professor.  Of bears.

And do they shit in the woods?

Cheers

Jim

[Stan]

Alex Jones is on CNN tonight and has already got himself in trouble with the TSA. Usually I wouldn't lower myself to watching Piers Morgan but you'd think there'd be a good chance of someone kicking off.

Watching two cunts cancel each other out can leave one feeling neutral.

Well three if you count David Gergen.

[Professor Bear]

For the record, I am a real professor.  Of bears.

And do they shit in the woods?

Cheers

Jim

Not exclusively.