/The changing view of tax – MoneyWeek

The changing view of tax – MoneyWeek

Thisweekthingshavemovedfurther,withacoverstoryseriesinTheTimesheadlinedTheTaxAvoiders。

ThepaperclaimsthatavoidancecostsBritain£4。

5bnayear;exposesaparticularlyaggressiveschemeapparentlyusedbycomedianJimmyCarrtomakehisincome-taxliabilityvanish;andhasagoatthetaxaffairsofTakeThattoo。

I’mwithTheTimesonthisone。

WhyshouldCarrbeallowedtochannelhisincomeviaJerseytoavoidtaxeswhenhelives,worksinandbenefitsfromBritain?

Whyshouldpopstarsgetawaywithusingpartnershipstructuresastaxshelterswhiletherestofusfinancetheinfrastructurearoundthem?

Surely,whateveryoufeelabouthowthestatespendsourmoney,itdoesn’tmakesensethat,asTheTimesclaims,“thousandsofwealthypeopleinBritainpayaslittleas1%incometaxusingbelow-the-radaraccountingmethods”?

SoitshouldbegoodnewsthatnotonlyisHMRCclampingdownonevasionviaitsvarioustaxamnesties,butthatinhisbudgetOsbornealsosaidhewastostartconsultingonageneralanti-avoidancerule(GAAR)。

I’dlikedthesoundofthat,inthatitsuggestedablanketrulingoutofallkindsofobviousavoidance:soanyonerunningacharityfortheirownpurposescouldperhapsbeforcedtopayupjustasmuchassomeoneinaCarr-typeJerseyscheme。

Sadly,itisn’tgoingtobequitelikethat。

Theconsultationisnownotforageneralscheme,butonecovering“abusiveschemes”。

Why?

Becauseanythingwiderwouldalsoaffect“responsibletaxplanning”。

Butwhyistaxplanningdifferenttotaxavoidance?

Theyaresurelythesamething–effortsnottopaythesametaxaseveryoneelse。

IfOsbornecouldbringhimselftoignorethevestedinterestsaroundhimhemightfindthislesscomplicated。

Heneedstosimplifythesystem,knockoutallconfusion,thenintroduceaproperGAARthatpreventstheentirespectrumofwhataccountantsliketocalltaxplanningandwecall“landingtherestofuswiththebill”。

Havingdonethat,hecanthenusethesavingstocutoveralltaxrates。

Ifhistoryisanythingtogoby,thatwillprettymuchinstantlyraisehisrevenues。

Howhardcanitactuallybe?

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