Lib Dem manifesto: can you trust the numbers? | Politics | guardian.co.uk .
The Guardian reports:
Tax accountants, who make their living helping clients avoid tax legally, said the Lib Dems’ plans were unrealistic.
“If it was possible, it would have been done by now,” said Mike Warburton, partner at Grant Thornton. “Politicians of all parties come up with these plans, which are incredibly popular with the electorate, but find it is a bit like picking up a bar of slippery soap – you think you’ve got it, then it slips away. Accountants and lawyers will find ways round whatever rules are in place to help our clients.”
Asking Warburton about tax avoidance is like asking a burglar for comment on crime statistics. He creates those stats on tax avoidance – why on earth listen to what he has to say about them?
But he’s wrong. The report I helped co-write for Compass shows that. The Green New Deal has also done so. As has the Missing Billions for the TUC.
Warburton is wrong. Completely wrong.
And it’s patently obvious to anyone that this must be the case. He brings shame on the profession by speaking as he does. – saying time and again he will abuse any law put in his path. It’s sickening that he does so.
28 Responses to “Warburton brings shame on the profession – again”
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Warburton is talking absolute garbage! Many of the loopholes the Lib Dems (rightly) plan to close are absolutely obvious – e.g. the fact that top income tax is 50% but CGT is 18%. Whose bright idea was that? It’s easy to sort that one out, and they are right to recommend that the UK does so.
Well said. I spotted that one in The Grauniad too – absolutely nauseating, as Vince Cable might say.
Howard, that is not a loophole, that is what the law says. Do you really think Parliament was not aware of the difference between 18% and 50%?
@Peter
You do not seem to understand that all loopholes are unintended consequences of the law
All can be closed by amending the law
Howard is exactly right
I’m sorry that you are entirely wrong
No Richard, “loophole” implies an ambiguity or omission exists in the legislation. The taxing Acts are quite clear: income is to be charged to tax at 50%, capital at 18%. To use a favourite phrase of yours: debate over.
“However, he said that the party’s proposal to reform capital gains tax could indeed raise almost £2bn a year if the tax was increased from 18% to 40%.”
If this Warburton character is so sure that he can help his clients in their tax avoidance activities, how come he admits that changing the CGT rate will raise more tax?. Since the Lib Dems seem to be the only one of the three main parties serious about tackling tax evasion and avoidance may be its not so surprising Nick Clegg was apparently seen as the winner in last nights TV debate.
@Peter
Wrong
Tax avoiders seek to turn income into gains because of the rate
That’s the loophole
You either a) don’t understand how accountants work or b) are dissembling
So anyone investing for capital gain is a tax avoider?
@JohnBuckles
Yes – because you’d find very few would if there was no tax advantage
So let’s remove the advantage
So an individual who sells some shares is a tax avoider. Really, Richard, I know you’ve had a long trip and all that but you don’t help yourself at times.
The “advantage” is there for a reason. Parliament has laid it down specifically. Investing in capital is inherently riskier than receiving income from employment. That’s why the advantage exists. You may not like it, but that’s the reason.
Peter
Nonsense! Nigel Lawson did not agree with that. Nor do I. It’s absolute twaddle – investing in a share is a lot less risky than trusting most if not all your economic well being to many employers
This is just your excuse for the advantage given to capital over labour – and it has to end
And whilst it remains the abuse will also remain
As does the abuse of NIC because capital is not subject to it
It’s time labour was given a level playing field – because that is where real wealth lies
Now stop peddling clap-trap
Richard
It is all very well focussing attacks on the tax accountants and lawyers in the tax avoidance debate but perhaps greater attention should be given to the tax regulators and enforcers.
There is generally little complaint when tax laws and administration have become more sophisticated and aggressive -those who act within the rule of law realise that sloppy drafting and administration favours the dishonest at the expense of the honest.
By all means attack the tax-motivated transactions but I fail to see how being aware can be regarded as so morally repugnant. The government has the ability to legislate accordingly and perhaps a well thought-out approach to tax legislation would be far better than the sticky-tape approach we currently have.
Complete nonsense.
The real wealth is created by entrepreneurs. And these entrepreneurs need access to capital to start and grow their businesses and to exit them when they decide to move on (or retire). Capital gains taxes are adding to the cost of that capital and are therefore detrimental to everyone’s well being.
wage earners are risk adverse (otherwise they would be entrepreneurs) and the tax system should not encourage that behavior.
I would direct you all to have a look at GT’s accounts (they filed them with Company’s House but did not publish them due to the appalling state of they were in).
It would appear that there is a hefty increase in provisions in the accounts that appears to be to cover the expected liability from increased lawsuits relating to tax schemes. Are they, perhaps, flogging disingenuous tax schemes to unsuspecting clients
Whilst I worked there, not once did I hear about a successful tax scheme, but there were plenty of rumours about schemes that had gone wrong…
The problem is that (contrary to ICAEW et al guide lines) the question of ethics never gets considered – its as if there is the automatic assumption that if its legal (or could be given half a stab at being justified) then its OK
In the words of Jeff Goldblum “Yeah, but your [accountants] were so preoccupied with whether or not they could, they didn’t stop to think if they should”
Also, to note some of the comments above – any investment that relys on tax laws to make a decent return could hardly be considered a decent investment
Peter you said “The taxing Acts are quite clear: income is to be charged to tax at 50%, capital at 18%. To use a favourite phrase of yours: debate over.” You are right – that is what the law says.
If the law gets changed and capital is then raised to say, 40%, that then will be the law, and according to you, the debate would once again be over!
You appear to be advocating that there should be no questioning over laws. All laws are good laws because they are laws – not an overly smart appoach. I suspect that were the law to be bad for your business or personal wealth you would feel inclined to question it – what does that tell us? Perhaps that you have a vested interest in the status quo?
The fact that Richard termed it a loophole is really just semantics. Who cares whether its called a loophole or the law. Much more interesting is to ask the question – is the law a good law? Could it be made better or fairer?
Such a large disparity between 18% and 50% would not appear to be a good law if open to such abuse
“wage earners are risk adverse (otherwise they would be entrepreneurs)”
Exactly.
@Justin
At any time a person can decide what is right and wrong
When people cease to do so society fails
Apartheid was wrong and legal in South Africa
The law is not always a good guide to conduct
It doesn’t mean we have to leave our judgement at the door when coming to work as accountants
@Peter
I’m aware you have an academic email address
Very risk averse then, eh?
And not a productive member of society either?
Or just plain wrong when making such crass comments as you do here, often? Like Ted – who I doubt would know what an entrepreneur was if he ever met one
@Ted G
Try running a business without people
You’ll find it’s only possible in the world of tax scamming
Maybe that explains your confusion on this issue
@Richard Murphy
Try running a business without people
You’ll find it’s only possible in the world of tax scamming
Maybe that explains your confusion on this issue
I don’t think I am confused at all.
The issue is not about running business with or without people. The issue is about having a tax system that supports rewards for genuine, wealth creating risk-takers.
The immense majority of wage earners are NOT risk-takers (in Europe, over 50% of salaried workers work for various government agencies). I am sure that some of them perform valuable functions, but they do not create wealth, and there is no rationale whatsoever for the tax system to reward them.
I hope this will help to dissipate your own confusion.
@Richard Murphy
I fail to see how Mr Average taxpayer can be expected to tell the difference between right and wrong when it comes to paying tax in a complicated tax regime. If nobody sets the working parameters it is impossible to tell when you cross the rubicon.
Professional advisers are not paid to moralise, they are paid to advise their clients and ensure that they operate within the law.
It rather depends on what you mean by wealth creation? It is a rather indefinate term. If you mean by that supporting capitalism in the sense that those with money should be given tax breaks in order to create more money and that somehow society in general benefits ( soundng rather like defunct trickle-down economics) I’m not sure that is entirely supportable.
Distribution of wealth is as important, if not more important that the aggregate of a society’s wealth.
Your comment “they do not create wealth, and there is no rationale whatsoever for the tax system to reward them” indicates you feel that the more someone earns / creates, the less tax they should pay? Drawing that line of thinking to its logical conclusion, that the amount of tax one pays should not be related to their income/general wealth, would suggest that you think there should be a national poll-tax to replace all other taxes and that each and every person should pay the same fixed amount, billionaires and tramps alike.
Obviously I don’t actually think you think this – but it would seem to be where it would eventually lead to
@Ted G
What nonsense
Your comment is predicated on the assumption that risk with regard to capital accumulation is the only form of wealth creation
What about risk in deciding about the care of a dying person?
Or the risk in deciding as an employee (as the CEO’s of companies are) that an operation should continue or not?
Or the risk in deciding to pass a batch of cooked meat as safe, or not?
Or the risk in deciding a play should be produced, or not?
And on, and on, and on
Your problem is you don’t understand risk, reward or value
Get a life – then you might see things as they really are
“Professional advisers are not paid to moralise, they are paid to advise their clients and ensure that they operate within the law.”
Don’t hate the player, hate the game?
Isn’t this just a version of the Nurnberg Argument – just doing my job, following orders and therefore actions are amoral
That said I appreciate what you are saying – accountants would find themselves short of clients if they did any different
I sadly have no suggestions as to how to remedy the situation, other than major systemic change
That, I think it would seem, is the reason in part for this blog – major systemic change…
@Richard Murphy
Yes I shamelessley believe in the capitalist system, which has helped us create the greatest nation in the history of humanity. And I believe that a functionning market is the best allocator of scarce resources, including capital.
I don’t argue that these activities are of no value. Of course they are, and that is why those who perfrom them can earn a living wage (or should receive an allowance in the case of home carers for instance). But they do not create wealth. There is a fundamental difference.
I am surprised you do not understand this. It is really basic.
@Ted G
It is really basic – basically entirely wrong, and indicative of a hatred of all that is of real worth
Hatred is such an overrated feeling.
Why don’t you try to answer for once, or is it “debate over” already?
@Ted G
No hatred is not over-rated
Nor is anger
Anger is appropriate in the face of wrong doing
What you promote is wrong, and harmful to well being
Sure as heck I hate what you promote
That’s not the same as hating you
Don’t confuse the two