Some people seem determined to say that the TUC did not name ten tax loopholes it wanted to close in 'Kerching'. I think those doing so are sophists, but for the sake of all those who'd like a list of ten tax loopholes I'd close (and I stress, this is my list, not the TUC's), try these:
1) Align CGT and income tax rates
2) Abolish venture capital trusts
3) Abolish Enterprise Management Incentive
4) Abolish higher rate pension tax relief
5) Abolish higher rate releif on charitable giving
6) Abolish all film tax incentives
7) Remove the upper earnings limit for national insurance contributions (but cut the higher rate income tax rate below £100,000 to compensate)
8) Abolish all share incentive schemes unless available to all staff on similar terms
9) Dramatically reduce or remove CGT entrepreneur's relief
10) Substantially reduce scope of inheritance tax business property and agricultural property reliefs.
Why do this? Because we'd have a fairer, simpler, more effective and efficient, less abused and more certain tax system as a result and for 99% of the population nothing would change but a better distribution of tax bills would result.
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AND > All credit/ loans of whatever kind MUST be declared on HMRC annual tax return.If you can service the borrowering then you must have the income.It would stop and or curtail so many sharp practices.
How are all these “loopholes”? They have been specifically enacted by Parliament, and therefore reflect Parliament’s wishes.
As they reflect Parliament’s wishes, they cannot be termed “avoidance” either.
One may legitimately disagree that they exist and argue that they should be repealed, but it is extremely dishonest to claim that they are loopholes.
Extremely dishonest?
Now that is strong language when each of these laws create loopholes that permit avoidance as a matter of fact
But why let facts get in the way of rhetorical accusation?
Now come on David, may be they are not all strictly loopholes in the OED definition, although I would argue the widespread abuse of the film partnerships certainly is, the title clearly states ‘Loopholes and Allowances’.
Secondly, given that tax avoidance is legal (evasion being illegal), then by your definition there is no avoidance, only evasion.
Taking Richard”s no 1 as an example, I cannot speak for Richard but I’m sure he does not think that everybody who has paid CGT (incidently at a lower rate that income tax) is avoiding tax or using a loophole. But having a separate rate means that there are huge incentives to reclassify income as capital gains, if one’s income is big enough to afford the legal planning required. By effectively incentivising the manipulation of ‘income type’, and it is possible and common practice, surely you would agree that this leaves the potential to look for ‘loopholes’ to avoid tax.
The legislation can be redrafted and redrafted endlessly to define ‘income’ and ‘capital’ but there will inevitably always be another ‘loophole’. This game of legislation drafting cat and mouse would be stopped, and the incentive removed, if CGT and income tax were aligned.
Whether you agree that should happen is not the point. But it’s unquestionable that avoidance takes place because the legislation will never be able to cover every situation or manipulation, leaving what you might call a loophole. I could use a similar argument for many of Richard’s points above and it is therefore not dishonest in the slightest to tag the above as ways to close loopholes.
Well said
Especially your debunking in para 2
thank you RM – as someone else has said, some of these arent actually “loopholes” but rather statutory reliefs, but its a start.
What is interesting of the list, is that none of those would stop the Jimmy Carr style avoidance (or any of the other, which I might term “artificial avoidance schemes”) – perhaps the TUC GAAR request was designed to deal with that sort of thing?
would be interesting for someone to cost each of 1 to 10 in terms of revenue generation for the exchequer – no idea how you go about doing that though?
I note you stress this is your list rather than the TUC – out of interest, is that because the TUC has a different list?
As far as I know the TUC has no such list …. it’s list are action points and are in Kerching
For the Jimmy Carr….wait a day or so
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