The Guardian reports this morning that:
Most forms of legal tax avoidance are ok, says Nigel Farage
Now, I'll admit that working out quite what that means when the question was ion the context of payments made to his private company is hard to ascertain with any certainty - as is usually the case with Farage unless Europe and immigration or the subject of debate. But, in general, the tone of Farage's comments suggest that the Guardian have almost certainly got this one right - on which case so have I in my headline for this piece.
Compare this if you will with the following:
We do need a debate in this country, not only what is against the law - that's tax evasion, that is against the law, that's illegal and if you do that the Inland Revenue will come down on you like a tonne of bricks - but what is unacceptable in terms of really aggressive tax avoidance.
“Because some people say to me, ‘Well, it's all within the law; you're obeying the law, it's okay'. Well, actually there are lots of things that are within the law [that] we don't do because actually we have some moral scruples about them and I think we need this debate about tax too.
"I'm not asking people to pay massive rates of tax. We've got a low top rate of income tax now; we've got a low rate of corporation tax now; we are a fair tax country. But I think it's fair then to say to business, you know, we're playing fair by you; you've got to play fair by us.
That was David cameron in January 2013. The difference is Cameron did not mean it, and has not delivered so far - despite the rhetoric. Perhaps Farage was saying what he meant.
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One wonders which forms of ‘legal tax avoidance’ Mr Farage DOES find objectionable.
It’ll be fascinating to see how UKIP put together (or attempt to put together) a manifesto over the next twelve months. Populist Euroscepticism and far right dog whistling won’t match their ambitions in the general election.
And yet what *could* they stand for beyond that? It’s been well documented over the past couple of months that UKIP are picking up supporters from across the political spectrum – not just the right. So far that’s been their strength but, given the scrutiny they will now be subjected to, it could also be their weakness – that is if the main parties and the media can develop a strategy beyond ‘but they’re racists!! look, they’re really weird!!’ (possibly true but politically ineffective, incompetent even).
I can’t honestly see how UKIP will put together a tax policy that’ll satisfy Farage’s City buddies and the grass-roots. Of course, UKIP could just try to fight the election on ‘EU out!’ and ‘ruddy immigrants!’ again and try to hush up the fact that they make no sense as a broad, multi-issue party but if the main parties have any sense (and that’s a big if, I know!) they should be able to deal with them on the issues, such as taxation, on which UKIP’s true character cannot but expose itself.
Or maybe that’s hopelessly naive of me.
It will, indeed, be interesting
Farage is wrong.
All forms of legal tax avoidance are OK. That’s why they’re legal.
No they’re not
That’s why I helped write the General Anti-Abuse Rule
I thought you’d just contributed to the guidance, not the rule?
I contributed to the discussion on the original drafting as well
Oh, OK, I hadn’t realised that. Thanks.
What are you thinking of when you state that there are legal things we don’t do because of moral scruples?
It’s everyone’s right, in my view,to organize their affairs to their own personal advantage.It is a fundamental right which you appear to deny.
I do deny it: yes, of course
The law is not a perfect arbiter of what is right or wrong, let alone moral scruple
Only a fool would argue that it was
Come on! What about where ‘organizing their affairs to their own personal advantage’ conflicts with what is to someone else’s personal advantage? What sort of ‘right’ are you thinking of here? And can you really not imagine lots of examples of ‘legal things we don’t do because of moral scruples?’
No-one should be vilified for tax avoidance. People are people and will do what’s best for them. It’s the deliberate loop holes that are to blame. Therefore Garage is correct. I don’t know any of the sneaky ways accountants can avoid tax so I couldn’t comment on what’s pushing the boundaries too far. I wouldn’t avoid tax myself but I accept people do and can.
Tax avoidance is never about using deliberate loops
Tax avoidance is always about abusing the law
You make a common mistake
If tax avoidance was always within the law, tax avoidance schemes would not have to seek approval from the revenue.
Far to many of them are tax evasion scams dressed-up as tax avoidance schemes.
http://www.hmrc.gov.uk/aiu/
johnM
Tax avoidance schemes do not “seek approval” from HMRC, schemes that have certain defined characteristics are required to be notified to them. HMRC wold never grant ‘approval’ to a scheme.
You are right that many schemes are little more than scams but they have invariably lost in the courts.
For what it’s worth, the common acceptance is that tax evasion is outside the law and tax avoidance is within the law.
The problem with the muddying of the waters on these issues by the media and commentators is that in the public’s mind there is now no difference between outrageous scams and perfectly normal tax planning well within the anticipation and expectation of the current law.
If the speed limit outside a school is 30 mph and this is felt too fast, energy should be devoted to a campaign to get the speed limit lowered and not to a campaign of vilification of motorists doing 29 mph on the grounds that this is “speeding fine avoidance”.
The common acceptance that avoidance is within the law is only in the light of experience – not usually when it occurs
That puts a wholly different perspective on it
No one needs Counsel’s opinion if they are clearly within the law
And we do devote massive energy to changing the law. Tax avoiders merely provide the evidence that change is needed. Why ignore facts?
The speed limit comparison may be more relevant than admitted. A speed limit is only the maximum you are legally allowed to drive. Everyone is instructed that the speed they drive at should be one that is APPROPRIATE to their circumstances. Therefore, driving at 29 in a 30 limit outside a school may well be illegal. The same with aggressive avoidance. I personally think a morals comparison inappropriate in an avoidance/evasion discussion!