The 2020 group of accountants thinks it is one of the leading advisory groups in the UK on how accountants should run their firms. So look at its homepage. There down in the bottom right corner it says:
SDLT - Substantial Savings!
To make it really easy for you, click here for a template letter that you can send to your clients informing them of this scheme.
Click here for further details.
SDLT is stamp duty on land. It's charged at 4% in many cases. It raises almost £10 billion a year - about on third of Brtain's defence spending.
2020 say on their page promoting this scheme:
One of the schemes we like is the Orange Homes Stamp Duty Land Tax (SDLT) planning, which saves 50% of the SDLT payable on property or land purchases of £500,000 and above. We are satisfied that the planning is non-aggressive and low risk and felt sufficiently confident to take up the scheme for ourselves and saved over £30,000.
There's more on the scheme here.
The language used is, in my opinion, offensive. It's this culture of tax avoidance that the Guardian referred to last week in an editorial. As they say:
paying a fair share of taxes is not an option but a duty.
Cheating in the way that the 2020 group is promoting is not good business: it's a basic attack on our society. Why do we tolerate a profession that allows such a thing to happen? How come anti-social behaviour is tolerated when it's done by people in suits?
How can we stop it?
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The best way to tackle SDLT abuse is to abolish and replace with an annual land value tax. It’s unavoidable (you can’t hide land in a tax haven); it doesn’t hinder sensible economic decision-making (by adding to the transaction cost); it automatically transfers the capital gain from landownership (created by the whole community and not the landowner) to the public purse as a revenue stream.
Unfortunately, you wouldn’t need to hide the land in a tax haven, just the ownership of it. And as we saw last week, it’s all too easy to conceal the true ownership of anything when places like Lichtenstien are involved.
A properly implemented land value tax would require registration of title with an address to send the bill. If you don’t register or don’t pay you lose title. There is not much problem with collecting other UK property taxes: Council Tax and Business Rates.
One way to stop it (or at least reduce the take up of such schemes) would be to avoid giving them free publicity Richard. The links in your story are worth a fortune unless you believe that only people who agree with your perspective read your blog
It’s often said that there’s no such thing as bad publicity. I disagree. On this occasion especially the critical (‘bad’) publicity above will be deemed very good for the purveyors of the scheme.
As you know I took a calculated risk when I established the Tax Advice Network. We are not a resource for those wanting to access schemes of the sort mentioned above. So some people who approach our website and advisers may be disappointed. We neither seek out nor actively promote such schemes. There’s plenty of work for specialist tax advisers without going down that slippery path.
The thing I don’t get about tax law vs other laws is whether it’s reasonable to set higher standards. I commented on my own blog recently about the double standards that seem to apply to some politicians.
You know the sort of thing. They haven’t broken the letter of the law as regards their expenses and the donations received for political funding. What about the spirit of the law and why should be it be alright for them to focus only on the letter of the law?
I’m all in favour of going with the spirit of the law across the board. In practice I am aware that this leads to grey areas and to a lack of certainty. Are there really any absolutes?
Mark
Good point – and I wholly accept the risk. It’s one I take. For example a number of yuears back (and before blogs were thought of) a well known tax lecturer was promoting the idea of emplying a nanny througha company to save tax. I thought this a really bad idea, and so wrote about it for the Observer. The scheme caught on like wildfire – and was promptly stopped by HMRC.
Sometimes publicity is the way of killing a scheme – these things only survive in the shade it seems to me.
But I accept, in the meantime I have done the promoter of this scheme a power of good – maybe 3,000 people will read about it today.
Richard
@Mark,
It’s good to see a specialist tax advisor taking a stance like yours. We professionals down in the engine room have the same principles but don’t often see those above us saying and doing the same thing.
Thanks.
Name and shame. How many friends have Tesco made in the last week or two over the revelations of their land deal? The risk of promotion is a risk worth taking.
Mark
No, there are no absolutes in this.
Which is why tax and morality have to mix.
Richard