The Tax Enforcement Society

[Mick Mac]

Well this is an interesting development.

It seems it is now unfashionable to legally arrange your finances to pay less tax and can attract huge groups of demonstrators shouting slogans outside your shops.

A lot of these demonstrators (interviewed on tv) are public sector workers and it seems to be their understanding that if Philip Green etc were to pay more tax it would secure their jobs. Of course it would not, tax planning may become unfashionable but the public sector will be reduced in size because it got too big, and if more tax is taken it is very unlikely to change the public sector cuts.

[SeanMacGabhann]

I prefer sober Mick. We didn't have to deal with so many of his threads in November ;-)

The tax take is important. Moreover it's nigh on impossible for someone on 20k to comprehend why they have no options to avoid tax when billionaires do. Is that so hard to comprehend?

On 20k I NEED to pay less tax to get by. Why does someone on billions or even millions feel the same need. I will never ever ever ever ever get this

[zeban]

Absolutely agree Sean.

Perhaps the protesters are also drawing attention to the idea that perhaps we're all being slightly duped by the argument for the necessity of the cuts when the richest people are avoiding paying their dues. All in it together? apparently not.

And if anyone argues for the 'wealth' that Philip Green brings to the economy and the 'jobs' he creates, I will be very worried.

[Dickensman]

I like paying tax, I wish I was paying a thousand pounds a day.

[Mick Mac]

SeanMacGabhann Wrote:

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> I prefer sober Mick. We didn't have to deal with

> so many of his threads in November ;-)

>

I am sober - but i'm about to go out and will be back with avengence later......wait in expectation.

[Mick Mac]

zeban Wrote:

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> Absolutely agree Sean.

>

> Perhaps the protesters are also drawing attention

> to the idea that perhaps we're all being slightly

> duped by the argument for the necessity of the

> cuts when the richest people are avoiding paying

> their dues. All in it together? apparently not.

>

> And if anyone argues for the 'wealth' that Philip

> Green brings to the economy and the 'jobs' he

> creates, I will be very worried.

be very worried....

[zeban]

Well no matter how much wealth you bring into the economy you're also reaping huge rewards yourself without having to avoid tax. The amount of tax you pay afterall is all relative. Philip Green is hardly a philanthropist and as for jobs..just over minimum wage low skilled retail work- great just what the country needs.

[DJKillaQueen]

On 20k I NEED to pay less tax to get by. Why does someone on billions or even millions feel the same need. I will never ever ever ever ever get this

I couldn't agree more....but would say the reason why some get obscenely wealthy in the first place is because they have an addiction to money....just like an alcoholic, no amount is ever enough.

[tomchance]

Not to mention that the income and wealth of people like Philip Green is hardly a sacrosanct inevitability, a fair reward for their work. The market is a pretty arbitrary way of deciding how to reward people. Tax is one way that we can redistribute income and wealth to share the good stuff around a bit more fairly.

I've just had my rent jacked up by 6% again, despite having my salary frozen. The tax that Green et al dodge could easily pay for a national home building programme that would solve a lot of the affordability problems we all face.

I've no sympathy with rich and/or wealthy individuals or companies who pay less tax than they should - whether legally or otherwise - when we face so many problems in this country.

[louisiana]

Remember Leona Helmsley.

"In 1983 the Helmsleys bought Dunnellen Hall, a 21-room mansion in Greenwich, Connecticut, to use as a weekend retreat. The property cost $11 million, but the Helmsleys wanted to make it even more luxurious than it had been before. Jeremiah McCarthy, a Helmsley executive engineer was initially put in charge of the operation. McCarthy claims that Leona repeatedly demanded that he sign illegal invoices designed to illegally bill personal expenses to the estate. According to Ransdell Peirson's "The Queen of Mean," when McCarthy declined to do so she exploded with tyrannical outbursts claiming, "You're not my fucking partner you'll sign what I tell you to sign."[8]

"The remodeling bill came to $8 million, which the Helmsleys were loath to pay? as well as taxes written off the project. A group of contractors went to court to get most of the money; the Helmsleys eventually paid off most of the debt. In 1985, during these proceedings, the contractors revealed that most of their work was being illegally billed to the Helmsleys' hotels as business expenses. The work included a million-dollar dance floor, a silver clock and a mahogany card table.[9] Enraged, the contractors sent a stack of invoices to the New York Post to prove that the Helmsleys were trying to write their work off in this manner. The resulting Post story led to a federal criminal investigation. In 1988, then United States Attorney Rudy Giuliani indicted the Helmsleys and two of their associates on several tax-related charges, as well as extortion.[4]

"At trial, a former Helmsley-Spear executive, Paul Ruffino, says that he refused to sign phony invoices illegally billing the company for work done on the Helmsely's Connecticut mansion. Ruffino, originally engaged to assist Helmsley through the Hospitality Management Services arm, says that Leona fired him on several different occasions for refusing to sign the bills, but Harry would usually tell him to ignore her and to come back to work. Another one of the key witnesses was a former housekeeper at the Helmsley home, Elizabeth Baum, who recounted having the following exchange with Leona Helmsley four to six weeks after being hired in September, 1983:

I said: "You must pay a lot of taxes". She said: "We don't pay taxes. Only the little people pay taxes."[11]

?Elizabeth Baum, former housekeeper to Helmsley (October 1983)

Leona also evicted her daughter-in-law and grandson (14) from their home when her son suddenly died of heart failure. Nice.

http://en.wikipedia.org/wiki/Leona_Helmsley

Great wealth so often seems to be a combination of good luck, greed and doggedness.

Treating others as unfairly as they can get away with (at all levels) also seems to be a common trait: every situation - including the payment of taxes - is seen as a position to be opposed, challenged, negotiated away from, and under no circumstances accepted as reasonable or fair. They never accept what the other side proposes as that is seen as weakness and capitulation. And given that this strategy often results in success for them - they come out ahead - why on earth would they do anything different?

The weakness of the 'fair and reasonable' position is that such people don't play that game.

[Mick Mac]

tomchance Wrote:

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> I've no sympathy with rich and/or wealthy

> individuals or companies who pay less tax than

> they should - whether legally or otherwise - when

> we face so many problems in this country.

If they pay tax legally, then it is the correct amount of tax. You cannot legally pay less tax than you should.

Unless you are bringing in subjective judgements such as - "he is rich he should pay x % on his income and we have found out that he actually pays only y % on his income."

[tomchance]

Mick, I think it's fair to say that (for example) should pay tax in Ireland instead of legally dodging it.

[DJKillaQueen]

Also the inland revenue has done mystifying deals with the likes of Al Fayed etc effectively allowing them to pay less tax. And just because something is technically legal, doesn't make it moral. PAYE employees pay proportionately more tax than the self employed for example, who can offset expenses against tax (an area vastly abused) and pay less national insurance too. The argument of the very rich is often that the gross amount of tax they pay is so large that they should somehow pay a smaller percentage of their income as tax than the PAYE employee.

[Mick Mac]

Its a conceptual argument - the legislation, national or international tells you the tax you should pay in a given situation.

Its not therefore correct to say someone should pay more tax, if they are acting within the law.

If you do make that argument, then you are being subjective.

[Brendan]

Just because you?re allowed to do something doesn?t make it ok to do so.

If you can?t conceptualise that then you may as well just give up and become a conservative religious fanatic like Tony Blair.

[louisiana]

DJKillaQueen Wrote:

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> Also the inland revenue has done mystifying deals

> with the likes of Al Fayed etc effectively

> allowing them to pay less tax. And just because

> something is technically legal, doesn't make it

> moral.

I go back to my point about fair and reasonable. These people regard 'the amount of tax I should pay' as a starting position in negotiations, which they have no intention of fulfilling. The aim is always to come out ahead.

PAYE employees pay proportionately more tax

> than the self employed for example,

who can offset

> expenses against tax (an area vastly abused)

Maybe abused by some, but the position taken always has to be defensible viz a viz the tax authorities, with full receipts of every item down to a few pence; and keeping all those records for at least six years.

The wealthy can pay good and expensive advisers that will advise them past all these petty hassles. And these people will not be self employed: they'll have a variety of companies covering each of the angles for them, and they'll probably even live in a house - or houses - belonging to such companies.

I not so long ago translated a marriage certificate for an extremely wealthy individual (top billionaires worldwide; the money was made by his dad, not him). The invoice was settled by one of his companies. I have no idea how he gets away with that; how a private document can become a business expense paid by your company. But there you go.

and

> pay less national insurance too.

The self-employed pay the same rates of tax as people on PAYE. They pay less NI, but on the other hand the self employed are entitled to far fewer benefits: no sick pay, no maternity, no unemployment, no anything apart from pension (if we ever get those!).

As a self-employed person, you could have earned 8 or 9 or 10 grand many months ago, have paid tax and NI, and have no work and no prospect of work and no money but have no entitlement to any benefits.

The only way around this is to take out very expensive private insurance for income protection against sickness etc., on top of equally expensive insurance against professional negligence, insurance of business assets etc. Each of these come to several thousand pounds a year, even if you can get them (most insurance companies won't sell income protection to the self employed; and the cases where they actually pay out on this are negligible).

The argument of

> the very rich is often that the gross amount of

> tax they pay is so large that they should somehow

> pay a smaller percentage of their income as tax

> than the PAYE employee.

Except there is only so much caviar you can eat.

[DJKillaQueen]

But if you are a freelance worker....whose work is contract based you CAN claim benefits between contracts (providing any savings you have are not above the allowed threshold).

[womanofdulwich]

I'd rather work for Philip Green at just above min wage than not work. In fact I would rather anyone worked for him at this rate than claimed benefits, all sourced from taxes we pay on our earnings ( I think I may be a squeezed middle).

IME you can be self employed and pay very little tax as you ,as the accountant will tell you ,"set up " cost of laptop, printer, proportion of utility bills etc. There are a swathe of accoutnants/ tax advisors- no doubt many of them self employed -only too happy to show you how to minmise your tax. The first year is always the best, there is just a way of "playing this game" and there is a very shady area- similar in many fields I am sure, but at the end of the day those of us that are PAYE have no flexibility on what tax we pay, we are strictly legit. Still we have a clear conscious and sleep well at nights not worrying about which sets of figures we gave the tax man v which ones we showed the mortgage broker.

[DJKillaQueen]

It's true...as a freelancer I can offset part of my domestic utiliy bills against tax, even though most of the work I do is not done at home. That is a very good WOD.

[indiepanda]

louisiana Wrote:

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> The only way around this is to take out very

> expensive private insurance for income protection

> against sickness etc., on top of equally expensive

> insurance against professional negligence,

> insurance of business assets etc. Each of these

> come to several thousand pounds a year, even if

> you can get them (most insurance companies won't

> sell income protection to the self employed; and

> the cases where they actually pay out on this are

> negligible).

>

Actually that's not entirely true, I used to work for a company that sold long term income protection and we were quite happy to insure self employed people for income protection provided their work wasn't excessively risky - but the nature of the work mattered just as much if you were employed.

However, if you are conned into taking out payment protection insurance (also know as accident sickness and unemployment) which some dodgy people sell calling income protection - where you don't get underwritten till you claim, you will find it very hard to claim because they won't cover all types of sickness and exclude all pre-existing conditions and it is generally expensive because banks get paid a small fortune for selling the stuff.

I am the first to admit there are some sharp practices in the insurance market, but there are decent products out there that you can find if you get good advice from a decent IFA.

[zeban]

Womanofdulwich- I think most people on minimum wage would still have to claim some kind of benefit to keep a roof over their head. I wouldn't take the moral highground on this.

How about you show a concern at the wages people like Philip Green pay their employees? That's what I was arguing for. If he stopped dodging tax perhaps he could pay his employees a living wage where they wouldn't have to claim benefits. Then you wouldn't need to complain.

[louisiana]

indiepanda Wrote:

-------------------------------------------------------

> louisiana Wrote:

> --------------------------------------------------

> -----

> > The only way around this is to take out very

> > expensive private insurance for income

> protection

> > against sickness etc., on top of equally

> expensive

> > insurance against professional negligence,

> > insurance of business assets etc. Each of these

> > come to several thousand pounds a year, even if

> > you can get them (most insurance companies

> won't

> > sell income protection to the self employed;

> and

> > the cases where they actually pay out on this

> are

> > negligible).

> >

>

> Actually that's not entirely true,

It is entirely true that you have to take out your own private insurance, no?

I used to work

> for a company that sold long term income

> protection and we were quite happy to insure self

> employed people for income protection provided

> their work wasn't excessively risky - but the

> nature of the work mattered just as much if you

> were employed.

Hmm, many professional societies and associations offer this as a benefit (that you can sign up to and pay for), but it is entirely true that you have to sign up to and pay for it; and that many policies specifically exclude the self employed.

>

> However, if you are conned into taking out payment

> protection insurance

I'm not at all talking about payment protection.

(also know as accident

> sickness and unemployment) which some dodgy people

> sell calling income protection - where you don't

> get underwritten till you claim, you will find it

> very hard to claim because they won't cover all

> types of sickness and exclude all pre-existing

> conditions and it is generally expensive because

> banks get paid a small fortune for selling the

> stuff.

>

> I am the first to admit there are some sharp

> practices in the insurance market, but there are

> decent products out there that you can find if you

> get good advice from a decent IFA.

The point is not that these policies exist. They do (at a cost).

The point is that self-employed people have to pay for them, because they get zero state benefits. With the consequent point that self-employed people will have all sorts of expenses that the employed do not. I think you are going off on a tangent from this issue.

PS I've done extensive research with IFAs (in their offices; for a range of big insurer clients, across England and Scotland). Fascinating world :)

[womanofdulwich]

In terms of self esteem I would rather work and have a state top up than not work. Thats what it is for- there is absolutely nothing wrong in that. Work leads to work.I am not complaining, I just think he is paying the minimum he can - I have just bought 2 loafs of bread from iceland for ?1.50 - ?2 in Sainsburys- if I can be bothered to source bread for less, then why should he pay over the odds?he is not a philanthropist.

He is making the margin he considers appropriate.

Don't kid yourself he is here TO MAKE MONEY. If staff can promote themselves whilst working for him good for them.

However if he had to sign up for a higher wage then he would- but you know what? either prices would go up, or costs would go down and he would get his suppliers to cut costs ( maybe they come from China/India/Pakistan?).

[zeban]

Er there's making money as any business needs to, and there's greed and profiteering at any cost. I would suggest Philip Green is in the latter category given that he's happy to avoid paying the amount of taxes he should be. This is the whole point of this argument and why the protesters are choosing companies and individuals such as this. It isn't a protest against businesses in general or the minimum wage so please don't shout at me and read the thread properly.

[womanofdulwich]

Zeban we have crossed as I was editing-please see my edited response.

I thought all big business maximised their profits? Why don't you just not shop at Top shop?