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Source: (consider it) Thread: Are we bothered?
chris stiles
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quote:
Originally posted by Barnabas62:

I think we should avoid the politics of envy

Which has been used as a label for every critique of wealth ever.

How about the politics of fairness? The rich owe their continued position to the protections and regulations afforded to them by the state which they refuse to fund.

Ultimately, these are inherently complicated issues, they are made complex by the lack of political will to tackle them:

http://www.independent.co.uk/voices/paradise-papers-tax-evasion-off-shore-can-end-havens-wealth-a8040716.html

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mr cheesy
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quote:
Originally posted by Barnabas62:
How about compound interest, otherwise known as usury? There is a substantial moral argument to be made against that, reaching back into biblical principles. Yet in general the world's financial system is based on the application of compound interest to all loans and debts. In an era of very low interest rates, that is a less financially onerous burden than in the past. Unless you happen to be one of those unfortunate souls who has fallen into the hands of the iniquitous short term lenders who charge exhorbitant interest to those who have little option but to use them. These services are advertised, every day, on UK TV, as solutions to short term cash flow problems. I get pretty irate about them.

Not sure what this has to do with anything. Since medieval times, most Western Christians have usually not considered interest-bearing loans as usury, but only those which charge extortionate interest rates. Islam has a different understanding - although I note that the banks still make money on loans made without interest by charging fees in a different way.

Affordable loans for things like property are a good thing. It is hard to see how to do it without some system of loans or fees.

quote:
So far as tax avoidance (as opposed to tax evasion) is concerned, the problem is caused by the tax laws themselves.
Not really it isn't. There are plenty of things that are legal (or not actually illegal - there is a difference) but are clearly anti-social and immoral.

Changing the tax-code would be an enormous task because it is very complicated. Shaming corporations and individuals who profit from taking their money off-shore is a much simpler activity.

quote:
I avoid paying tax and also recover tax I do pay through payroll giving and gift aided giving. We've got some savings but we're way short of the tax threshold for interest earned.
Nope, you've not "avoided" tax. You've used the systems set up by government to encourage savings and charitable giving.

quote:
But my financial prudence is small beer compared with the large scale tax avoidances being reported now. I think we should avoid the politics of envy and go for reform of the tax laws which legitimise such large scale avoidance. And also recognise that it is an international problem. The global financial market is pretty hard to control without international co-operation.
I'm not envious, I'm pissed.

I'm incredibly annoyed that there are people and corporations who don't pay their way.

I don't want to be them, I just want them to stop getting a free ride off the back of others who are feeling the pain of paying tax like responsible citizens.

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arse

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Martin60
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Careful. If we carry this to its logical, ethical conclusion it would mean that the source of this institutional corruption in the outlying crown dependencies will not be able to cheat its way to a successful Brexit for the rich to trickle down to the rest of us. The source is the UK establishment. Even the radicalized Labour party is remarkably mute about this staggering inequity, the hundred billion (100,000,000,000) lost to the UK exchequer let alone the ten trillion (10,000,000,000,000) in invisible, worthless wealth worldwide.

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Love wins

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Barnabas62
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If Apple are paying more taxes in regimes which are, shall we say, more amenable to their commercial aims, then from Apple's viewpoint, they may be paying the same taxes, but more effectively.

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Who is it that you seek? How then shall we live? How shall we sing the Lord's song in a strange land?

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Martin60
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In so doing they are completely unenlightened in their self interest. The masses are your biggest market.

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Love wins

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Barnabas62
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quote:
Originally posted by mr cheesy:
Shaming corporations and individuals who profit from taking their money off-shore is a much simpler activity.

Sure is. It remains to be seen whether it has any significant impact on tax avoidance practices.

quote:
quote:
By Barnabas62:
I avoid paying tax and also recover tax I do pay through payroll giving and gift aided giving. We've got some savings but we're way short of the tax threshold for interest earned.

Nope, you've not "avoided" tax. You've used the systems set up by government to encourage savings and charitable giving.
Which enable me to avoid paying tax on a part of my income. Does it matter that the avoidance supports what I consider to be good causes? Other people might differ, might consider that the tax I don't pay might be put to better uses. HMRC still ends up with less taxes from my income, because I'd rather that money went somewhere else.

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Who is it that you seek? How then shall we live? How shall we sing the Lord's song in a strange land?

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mr cheesy
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quote:
Originally posted by Barnabas62:
Which enable me to avoid paying tax on a part of my income. Does it matter that the avoidance supports what I consider to be good causes?

Yes. You are using the system in the way it is intended. Others are seeking to use a loophole in order to gain personally from the fact that the complicated system lets those with clever lawyers gain advantage from it.

quote:
Other people might differ, might consider that the tax I don't pay might be put to better uses. HMRC still ends up with less taxes from my income, because I'd rather that money went somewhere else.
I don't understand the point you are making. You're not hiding anything, you're not seeking to gain personally from it. You are simply using the system in the way it is intended to be used.

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arse

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chris stiles
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quote:
Originally posted by Barnabas62:
Which enable me to avoid paying tax on a part of my income. Does it matter that the avoidance supports what I consider to be good causes? Other people might differ, might consider that the tax I don't pay might be put to better uses. HMRC still ends up with less taxes from my income, because I'd rather that money went somewhere else.

They are; limited in scope, set up incentivize particular behaviours, relatively simple, explicitly allowed, transparent and ultimately under direct democratic control.

You cannot say anything like this about the tax avoidance schemes outlined in the Paradise Papers. The details on these have often been sparse specifically because those employing them did not want HMRC finding out and therefore legislating against them.

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mr cheesy
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It's like this:

Vehicle Excise Duty in the UK is set at different levels for different classes of vehicle - mainly but not exclusively on the emissions.

There are some vehicles with zero duty to pay.

I don't think anyone would describe someone who was driving a low emission car as being a tax evader because the vehicle didn't attract duty.

Of course this is a deliberate tactic used by the government to encourage people to drive low emission cars.

On the other hand, it might be technically possible to register a particular car as being in on vehicle duty class when (for whatever reason) is should be in another.

This might be perfectly legal. It might be that the government has somehow overlooked something that someone has taken advantage of to reduce tax - and isn't telling anyone in the hope that the taxman won't notice.

The two scenarios are not the same. In the first the government has instructed the taxman not to collect tax on certain types of vehicle. In the other, individuals are attempting to get around the law in clever ways to avoid the tax.

In the one the taxman is gesturing to the motorist and saying with a smile "come on then, do this." In the other, the motorist is putting on shades and laughing to himself that he's been able to get one over the taxman.

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arse

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Martin60
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B62, why is the binomial theorem a sin?

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Love wins

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Alan Cresswell

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quote:
Originally posted by chris stiles:
quote:
Originally posted by Barnabas62:
Which enable me to avoid paying tax on a part of my income. Does it matter that the avoidance supports what I consider to be good causes? Other people might differ, might consider that the tax I don't pay might be put to better uses. HMRC still ends up with less taxes from my income, because I'd rather that money went somewhere else.

They are; limited in scope, set up incentivize particular behaviours, relatively simple, explicitly allowed, transparent and ultimately under direct democratic control.

In addition, Gift Aid and similar incentives to give to charity don't leave you financially better off. You'd be better off not giving anything, even though the tax man gets more that way.

In many cases it doesn't even deprive the tax man of much either (eg: if people stopped giving to cancer research charities then the tax man would get more because he's not paying the charity the tax on the gifts ... but, the cancer research needs to be done, and there will be greater demand on other income sources including the tax-funded research councils so the expenditure from the government could go up. Which, of course, governments understand and so at the relatively small cost of Gift Aid they can shift a larger proportion of government funding for medical research and other good causes to private donations. They then repeated the exercise with the stupid-tax aka Lottery).

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Don't Brexit if you haven't a scooby how to fix it.

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Barnabas62
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All tax avoidance is justified in the avoider's eyes in the same way. We want to spend the money in other ways than paying it to the Revenue. If a government says some of those means of avoidance are legitimate, then it is the law which legitimates the avoidance, not my moral sense or yours.

That is why the moral argument should be applied to the tax regulations. And that itself is a moral argument. I prefer tackling underlying causes to public shaming.

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Who is it that you seek? How then shall we live? How shall we sing the Lord's song in a strange land?

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Barnabas62
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quote:
Originally posted by Martin60:
B62, why is the binomial theorem a sin?

Normally I get your abstractions, Martin60, but this time you beat me.

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Who is it that you seek? How then shall we live? How shall we sing the Lord's song in a strange land?

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mr cheesy
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quote:
Originally posted by Barnabas62:
All tax avoidance is justified in the avoider's eyes in the same way. We want to spend the money in other ways than paying it to the Revenue. If a government says some of those means of avoidance are legitimate, then it is the law which legitimates the avoidance, not my moral sense or yours.

Nope, wrong. None of the "tax avoidance" schemes you mention are bad. Clearly have nothing even remotely similar to schemes in the media at the moment.

This is just gaslighting. Two things that are not the same are still not the same however many times you say otherwise.

quote:
That is why the moral argument should be applied to the tax regulations. And that itself is a moral argument. I prefer tackling underlying causes to public shaming.
Well I prefer public shaming. Boycott those corporations who think they can be here and not pay tax, shame those public figures who think that this is a good financial plan for themselves and ban non-doms from any position in parliament.

This works. Reworking the tax system doesn't.

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arse

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Barnabas62
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You misunderstand me. I'm not arguing moral equivalence. I'm simply pointing out that neither you nor I are responsible for what is legitimate, when it comes to paying, or not paying taxes.

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Who is it that you seek? How then shall we live? How shall we sing the Lord's song in a strange land?

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mr cheesy
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quote:
Originally posted by Barnabas62:
You misunderstand me. I'm not arguing moral equivalence. I'm simply pointing out that neither you nor I are responsible for what is legitimate, when it comes to paying, or not paying taxes.

No it isn't. The lottery is legal, but in my view deeply immoral.

Nobody is forcing me to play the lottery, to claim gift aid on donations or to have a tax-free savings account.

My use or not of all of those things is a moral choice.

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arse

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Sipech
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One aspect that seems not to have been mentioned thus far is that of culture. In particular, the culture that surrounds the capitalist mindset. When I was studying for my chartered accountancy, I had to study tax (so much so that I took my exam twice!) which included knowing about a few schemes.

What got my goat was the presumption in the teaching and in the exams that not paying tax was an inherently good thing. So a question might lay out a company's financial affairs and then be phrased as: "Outline a presentation to the directors to advise how they can save tax."

Because there is a culture where returns to the shareholders are sacrosanct, anything which lessens them is assumed to be bad. If you can avoid it, it's deemed to be fair game.

Here, there's a cultural divide between the left and right, where tax avoidance is seen as a moral issue by the left, but the right just don't wear that set of spectacles. Avoiding tax is seen as a professional duty; if someone does it by some elaborate means that exploits loopholes in the law, they are not seen as a moral pariah, they are congratulated for being clever.

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I try to be self-deprecating; I'm just not very good at it.
Twitter: http://twitter.com/TheAlethiophile

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Martin60
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quote:
Originally posted by Barnabas62:
quote:
Originally posted by Martin60:
B62, why is the binomial theorem a sin?

Normally I get your abstractions, Martin60, but this time you beat me.
Compound interest.

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Love wins

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Eutychus
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Does nobody on this thread ever receive or make payments off the books in cash?

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Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy

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no prophet's flag is set so...

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quote:
Originally posted by Eutychus:
Does nobody on this thread ever receive or make payments off the books in cash?

In cash yes. Off the books no. Illegality aside. I speak as someone in business. It's one of those things where a small little bit of dishonesty can lead to bigger and it taints. As the vendor of a service or product, you may feel it is kind to respond to the person requesting an "under the table" deal to not charge the tax or a real price. But in my experience, I have learned to consider the request and either charge normally on the books, or to give the service for free, no charge, rather than off the books in cash as you say. One is ethical, the other is not.
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Barnabas62
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quote:
Originally posted by Martin60:
quote:
Originally posted by Barnabas62:
quote:
Originally posted by Martin60:
B62, why is the binomial theorem a sin?

Normally I get your abstractions, Martin60, but this time you beat me.
Compound interest.
Here are some traditional arguments, Martin60.

The Catholic Church has never rescinded its arguments against usury.

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Who is it that you seek? How then shall we live? How shall we sing the Lord's song in a strange land?

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Eutychus
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I speak as someone in business too. As far as I can recall, I run absolutely everything through my company and pay tax, contributions etc. on it.

But I'd be surprised if none of us has ever made a payment in cash or even received a gift in some shape or form that a tax collector could legitimately decide was taxable and that we have omitted to declare. There needs to be common sense as well as scruples.

Of course companies should pay their fair share of tax. But deciding exactly what "fair" means is not all that straightforward.

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Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy

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Alan Cresswell

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quote:
Originally posted by Eutychus:
Does nobody on this thread ever receive or make payments off the books in cash?

I do spend cash. I have assumed that the shop or vendor I am paying books that properly. I can't do otherwise, since it would be somewhat odd to ask to inspect the books of the pub where I've just handed over a £20 note for a few beers.

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Don't Brexit if you haven't a scooby how to fix it.

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chris stiles
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quote:
Originally posted by Eutychus:

Of course companies should pay their fair share of tax. But deciding exactly what "fair" means is not all that straightforward.

... which we can have a debate about as a society. In the absence of this debate, companies don't get to decide to set their own rate of tax.

The level of whataboutery in this thread is something to behold.

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Eutychus
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It's not that we can't have it. It's that it's complicated.

Here are the OECD's transfer pricing guidelines - all 612 pages of them.

That's the guidelines to give direction to multinational companies on how to price transactions between their entities in different countries in such a way as to pay fair tax on those transactions.

Perhaps there's a middle ground between that and tabloid headlines, but it sure is hard to find.

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Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy

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ExclamationMark
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It's legal, of course. Yet the rules somehow get moved when it comes to certain people's affairs. I do wonder for example whether Palace staff (e.g Fawcett the fixer) who flogged gifts were prosecuted by HMRC a few years ago for benefit in kind tax evasion.

The big issue for me is why the Queen and Prince Charles (through the Duchies of Lancaster and Cornwall) can't be bothered to invest in their own nation. Are we that bad that even Brenda who's supposed to be whiter than white and above reproach, doesn't back her words with her actions?

On another part of this story: one commentator on radio 4 said it only cost the Uk £10 billion. That's one definition of only ... but not mine.

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chris stiles
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quote:
Originally posted by Eutychus:

Perhaps there's a middle ground between that and tabloid headlines, but it sure is hard to find.

No, I don't think this is one of those things that averages out into the middle somewhere. There are plenty of cases that are fairly cut and dry - some of them have been quoted in this thread, a situation where lots of companies keep billions abroad to avoid tax is not just a failure to understand transfer pricing properly.

I'm also not aware that anyone has posted tabloid related links in this thread.

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Ricardus
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quote:
Originally posted by mr cheesy:


If the money is earned in a different jurisdiction, you don't pay tax on it in the UK - and if you're a non-dom you don't pay tax on anything ever.

If you're resident in the UK, then foreign income is taxable. HMRC rules.

I agree non-dom status is a scam.

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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

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Alan Cresswell

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quote:
Originally posted by Ricardus:
quote:
Originally posted by mr cheesy:


If the money is earned in a different jurisdiction, you don't pay tax on it in the UK - and if you're a non-dom you don't pay tax on anything ever.

If you're resident in the UK, then foreign income is taxable. HMRC rules.

I agree non-dom status is a scam.

Though, if you have also paid tax in that other jurisdiction then there could be tax relief available.

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Don't Brexit if you haven't a scooby how to fix it.

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Eutychus
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All I'm saying is that ethical and tax-paying as I believe myself to be, I think it's really difficult to ensure that one's own investments are squeaky clean (whatever that means).

There's a difference between aggressively pursuing minimum-tax options (something I have deliberately sought to avoid doing with my business) and being unaware of all the investment decisions of a mutual investment fund. I have some minor investments because I am basically going to get next to no pension; I've done my best to avoid outright "evil" portfolios such as defence and tobacco, but at the end of the day I have little idea what those funds are doing with my money or where the banks might have parked it*.

In the meantime I'd much rather go after banks' practice of extorting money out of people on very low incomes through overdraft and other charges and selling them useless and expensive financial products, such as dud insurance, which they know they cannot afford.

(*anecdote: I had a Jersey bank account for a while. It was the only way my high street bank would allow me as a non-UK resident to keep a Sterling account for a while. Then they introduced whopping charges and I managed to find a mainland high street bank that would host my account. Yes I have always declared all these accounts to the tax authorities where I'm domiciled).

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Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy

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no prophet's flag is set so...

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I looked up "non-dom" which is opaque UK jargon for non-resident and defined as:"Someone living in the United Kingdom, whose home is not permanent, fixed, or his or her principal residence, or that person's tax status. This status includes those holding British passports. Sometimes referred to as foreign nationals, these individuals pay income tax and capital gains tax only on earnings generated in or money brought into the United Kingdom."

Actually it is entirely reasonable in some circumstances. When a person has ties to another country and is paying tax there, they should never be in double-taxation situations with the UK or any other country. My daugher paid UK tax on UK income and Canadian income tax on Canadian income when she lived in the UK. It is the filthy rich who may figure out how to live in the UK and pretend to pay tax in another jurisdiction, or perhaps scam in other ways. And this is all a scam. The stuff of eating cake.

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Ricardus
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[Reply to Alan]

Sure, but if that other jurisdiction is a tax haven then by definition the tax relief will be close to nil.

[ 07. November 2017, 19:06: Message edited by: Ricardus ]

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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

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Sipech
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# 16870

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quote:
Originally posted by Ricardus:

I agree non-dom status is a scam.

We're all non-doms somewhere. Most places in fact. I'm domiciled in the UK, which means I have non-dom status everywhere else.

It's where you start off domiciled somewhere and then seek to change it, that's difficult. You have to effectively sever all ties with your home country. There was an case which HMRC brought (and won) against a chap who tried to claim non-dom status but he lost his case because he retained his membership of a private club in London.

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Eutychus
From the edge
# 3081

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quote:
Originally posted by Ricardus:
I agree non-dom status is a scam.

Best to become a perpetual traveller
[Two face]

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Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy

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mr cheesy
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# 3330

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quote:
Originally posted by Sipech:
We're all non-doms somewhere. Most places in fact. I'm domiciled in the UK, which means I have non-dom status everywhere else.

The problem is when you clearly are domiciled somewhere for every possible definition or understanding of the word except for tax purposes.

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arse

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mr cheesy
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# 3330

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quote:
Originally posted by Ricardus:
[Reply to Alan]

Sure, but if that other jurisdiction is a tax haven then by definition the tax relief will be close to nil.

No I don't think that's right.

As I understand the way it works - you don't get taxed on the same income twice (or at least you're not supposed to).

So if you are living in Spain but earning in England, you might well be earning against the British tax code and paying British tax but not paying any tax in Spain (in fact I'm pretty sure there is a well-developed system in the EU to sort out this problem).

If you are earning in a low-tax jurisdiction you might just tell the taxman "oh this is income I earned in the British Virgin Islands" and they'll not tax it in the UK (because for tax purposes you didn't earn the money in the UK).

It "just so happens" that the tax regime in some of these jurisdictions is lower than it would be in the Spain-UK example - but the principle of only getting taxed once on overseas earnings is exactly the same.

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arse

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Arethosemyfeet
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# 17047

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quote:
Originally posted by Eutychus:
Does nobody on this thread ever receive or make payments off the books in cash?

Um... no, I don't think so. I would view that, particularly on the scale of paying thousands to builders in cash, as extremely dubious ethically. I am currently trying to renovate a house and it would be simple to evade the double council tax on it being vacant but I choose not to. Likewise I will be paying the VAT due when it comes to the repairs.
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Alan Cresswell

Mad Scientist 先生
# 31

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Tax relief works, AIUI, when you're a UK resident and declare your income to the HMRC so they can calculate the tax due. If that income has already been taxed then you also declare that, and HMRC effectively subtract what you've already paid elsewhere from the total they calculate on your income. That's certainly how it appeared to work when I was declaring my salary in Japan which was taxed there. If you declare income that hasn't already been taxed, or only at a marginal rate, then HMRC will treat that as UK income and tax it accordingly without a rebate.

The sort of schemes under discussion seem to fall into two categories. One where someone clearly living in the UK claims they aren't, and therefore some or all of their income doesn't fall under HMRC jurisdiction. The other is where people arrange things so that money they gain from their employment and investments gets classed as a loan or something else - and, as such doesn't count towards their tax assessment.

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Don't Brexit if you haven't a scooby how to fix it.

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mr cheesy
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# 3330

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I've paid cash for things, I've no idea who puts things properly through the books for tax. I don't really think it is up to me to police other people unless they're being very obvious about their tax-dodging (in which case I wouldn't use them).

In reality there are obviously ways to not declare tax properly and earn cash under the table. I tend to believe that people who try this a lot will get caught in the end.

I've always declared any income I have for tax.

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arse

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Alan Cresswell

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# 31

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quote:
Originally posted by Arethosemyfeet:
quote:
Originally posted by Eutychus:
Does nobody on this thread ever receive or make payments off the books in cash?

Um... no, I don't think so. I would view that, particularly on the scale of paying thousands to builders in cash, as extremely dubious ethically. I am currently trying to renovate a house and it would be simple to evade the double council tax on it being vacant but I choose not to. Likewise I will be paying the VAT due when it comes to the repairs.
Noting that VAT on renovation of an empty property is charged at a reduced rate of 5% (it's another one of those "tax dodges" to encourage policy - in this case to help get empty houses back up to decent standard so that they can be sold or let to help alleviate the housing crisis).

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Don't Brexit if you haven't a scooby how to fix it.

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mr cheesy
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# 3330

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quote:
Originally posted by Alan Cresswell:
Tax relief works, AIUI, when you're a UK resident and declare your income to the HMRC so they can calculate the tax due. If that income has already been taxed then you also declare that, and HMRC effectively subtract what you've already paid elsewhere from the total they calculate on your income. That's certainly how it appeared to work when I was declaring my salary in Japan which was taxed there. If you declare income that hasn't already been taxed, or only at a marginal rate, then HMRC will treat that as UK income and tax it accordingly without a rebate.

They'll tax income that hasn't been taxed elsewhere, but I'm pretty sure they won't add extra to earning that have only been marginally taxed will they?

There are double-tax agreements with most other jurisdictions including the British overseas tax havens.

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arse

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Ricardus
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# 8757

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If you're a UK resident, then your income is taxable, regardless of where you earned it. From the first link I posted:
quote:
If you’re UK resident, you’ll normally pay tax on your foreign income. But you may not have to if your permanent home (‘domicile’) is abroad.
If you earned it in a foreign country and that country has a double-taxation agreement with the UK, then, depending on the terms of that agreement, you may be able to get tax relief on the tax that you paid in the other country. But by definition that tax relief is limited to the amount that you did in fact pay.

So if you paid £10 tax in the Cayman Islands on income that attracts £100 tax here, then you will pay £100 here, £10 to the Cayman Islands, and then HMRC will give you £10 back.

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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

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mr cheesy
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# 3330

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quote:
Originally posted by Ricardus:

So if you paid £10 tax in the Cayman Islands on income that attracts £100 tax here, then you will pay £100 here, £10 to the Cayman Islands, and then HMRC will give you £10 back.

Nope. That's not how it works.

You declare that you've earned and paid tax on £100 in the Cayman Islands* and because of the double-taxation rules they don't tax you again on that income.

*assuming there is a relevant agreement

[ 07. November 2017, 20:51: Message edited by: mr cheesy ]

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arse

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mr cheesy
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# 3330

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OK I don't know now, maybe I'm wrong.

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arse

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Eutychus
From the edge
# 3081

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quote:
Originally posted by Arethosemyfeet:
I am currently trying to renovate a house and it would be simple to evade the double council tax on it being vacant but I choose not to. Likewise I will be paying the VAT due when it comes to the repairs.

That way the repairs will be insured...

I would pay for building works above board too. But I think things would grind to a halt pretty quickly on a day-to-day level if there were no informal economy at all.

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Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy

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Ricardus
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# 8757

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quote:
Originally posted by mr cheesy:
quote:
Originally posted by Ricardus:

So if you paid £10 tax in the Cayman Islands on income that attracts £100 tax here, then you will pay £100 here, £10 to the Cayman Islands, and then HMRC will give you £10 back.

Nope. That's not how it works.

You declare that you've earned and paid tax on £100 in the Cayman Islands* and because of the double-taxation rules they don't tax you again on that income.

*assuming there is a relevant agreement

There is indeed such an agreement.

From section 11:
quote:
Where a resident of a Territory derives profits, income or gains which, in accordance with the provisions of this Arrangement, may be taxed in the other Territory, the first-mentioned Territory shall, subject to any provisions of its law regarding the allowance as a credit against its tax of tax payable in another territory (which shall not affect the general principle hereof), allow as a deduction from the tax on the income of that resident, an amount equal to the tax paid in that other Territory. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to the income, profits or gains which may be taxed in that other Territory.


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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

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Alan Cresswell

Mad Scientist 先生
# 31

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quote:
Originally posted by mr cheesy:
quote:
Originally posted by Ricardus:

So if you paid £10 tax in the Cayman Islands on income that attracts £100 tax here, then you will pay £100 here, £10 to the Cayman Islands, and then HMRC will give you £10 back.

Nope. That's not how it works.

You declare that you've earned and paid tax on £100 in the Cayman Islands* and because of the double-taxation rules they don't tax you again on that income.

*assuming there is a relevant agreement

HMRC pages on tax on foreign income

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Don't Brexit if you haven't a scooby how to fix it.

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mr cheesy
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# 3330

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This explains how someone living in the UK can get an advantage from earnings in a low tax jurisdiction:

quote:
But there are also ways in which individuals can remain living in a non-tax haven, such as the UK, and still benefit from tax havens.

If an individual keeps their assets in a trust in an offshore tax haven they can legally avoid paying capital gains in the country in which they are resident.

..the income can be paid out by the third parties to the beneficiaries regularly, or sporadically, depending on the decisions made by the third parties.

Once it is received by the beneficiaries, the income is subject to income tax. But while it is in the trust the assets are not subject to capital gains and the income on the investments is not taxed.

The calculations of the economist Gabriel Zucman – analysing discrepancies in countries’ national accounts – suggest that around $7.6 trillion, or 8 per cent of global wealth, is held offshore. That’s up 25 per cent over the past five years. Not all of that money will be held off-shore in order to dodge tax in a morally questionable way. But it’s fair to assume that a large proportion of it is.



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arse

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simontoad
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# 18096

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lalalalala

not listening not listening

lalalalalala

How about that bastard Bono? And those pricks from Mrs Brown's Boys.

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Human

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chris stiles
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# 12641

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quote:
Originally posted by Eutychus:

I've done my best to avoid outright "evil" portfolios such as defence and tobacco, but at the end of the day I have little idea what those funds are doing with my money or where the banks might have parked it*.

Those kinds of funds are unlikely to involve an offshore step - purely because of the amount of transparency involved (which is a huge clue - look at Ben Chu's recommendations on how to go after tax havens, transparency is a big part of it).

quote:

In the meantime I'd much rather go after banks' practice of extorting money out of people on very low incomes through overdraft and other charges and selling them useless and expensive financial products, such as dud insurance, which they know they cannot afford.

It is possible to do both. It's also possible that with the increased revenue to the government, those on low incomes could have their benefits properly bolstered so they that aren't such desperate targets in the first place.
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