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Originally posted by Barnabas62:

I think we should avoid the politics of envy

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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.

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So far as tax avoidance (as opposed to tax evasion) is concerned, the problem is caused by the tax laws themselves.

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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.

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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.

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

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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.

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Nope, you've not "avoided" tax. You've used the systems set up by government to encourage savings and charitable giving.

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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?

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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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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.

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Originally posted by chris stiles:

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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.

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

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

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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.

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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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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.

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Originally posted by Barnabas62:

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

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

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

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Originally posted by Martin60:

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Originally posted by Barnabas62:

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

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

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Compound interest.

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

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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.

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Originally posted by Eutychus:

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

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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.

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Originally posted by Ricardus:

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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.

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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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Originally posted by Ricardus:

I agree non-dom status is a scam.

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

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Best to become a perpetual traveller


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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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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.

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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.

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

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Originally posted by Arethosemyfeet:

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

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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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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.

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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.

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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.

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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.

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Originally posted by mr cheesy:

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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.

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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

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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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Originally posted by mr cheesy:

quote:

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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.

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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

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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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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*.

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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.

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