Caroline Lucas MP, the Green Party MP for Brighton Pavilion, is one of the first signatories of the Fair Tax Pledge. As she's said:
Tax seems to have become a dirty word and I am proud to be part of this initiative to reclaim it.
Paying tax is something I do because I believe in the redistribution of wealth, in giving something back, and in the principle that we are all collectively responsible for making society work for everyone.
The Fair Tax Pledge is my promise that I'll never try to dodge my taxes and I hope others will join me in pledging the same.
I'm delighted Caroline has said this, but that leaves 649 other MPs in the House of Common plus 800 or so Lords who have not done so.
I wonder if, after you've signed the Fair Tax Pledge you might ask your MP to do so?
You could email them. Addresses are here. A possible letter might be:
____________
Dear X
The Fair Tax Pledge
I've just signed the Fair Tax Pledge that's available here www.fairtaxpledge.uk
I've promised to:
- Declare all my income openly, honestly and on a timely basis;
- Not use tax havens to reduce any tax that I owe;
- Not use marketed or abusive tax avoidance arrangements;
- Not enter into any tax arrangement contrary to the spirit of the law;
- Advise my accountant that I do not want them to do anything contrary to the commitments I have made.
Would you please do the same? If so would you please sign the Fair Tax Pledge and let me know you've done so?
Yours etc
__________
Alternatively tweet them. That should work too.
Many thanks.
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Is the fair tax pledge for individuals as well as companies?
Bernie
Definitely
Richard – a quick question for you here on how the Fair Tax Pledge would work in the following situation.
Let’s say a wife has some shares that she wants to sell to crystallise a gain. She has already used her annual tax free exempt amount from gains liable to CGT. Therefore, she would be subject to CGT on the gains (let’s say at the higher rate). However, she is aware (either through her knowledge of the tax system or by using the services of an advisor) of the ability to transfer her shares at “no gain/no loss” to her husband (as allowed explicitly by legislation and completely in accordance with the spirit of the relevant legislation) who has not used his annual CGT exempt allowance, therefore, enabling the gains not to be subject to tax.
How would this be judged in view of the Fair Tax Pledge?
You decide
This is self assessment
But since you have doubts I suspect you know your own answer
How intersesting.
I run a small business and my bookeeper and I decide quite often that it is all too complicated and we will just make the best of it and often do not claim back where we know we probably could and do not declare where we know we probably should – just for ease of operation.
Personally I think the tax system is way too recherch̩ for the small business, but of course very, very few of those in power Рeither Labour or Conservative Рhave any concept of a small business!
Indeed the last VAT inspection we had took four days – and we have a turnover of less than £1m – because even the VAT inspector was mystified. He called head office who at length decided we’d been doing some things incorrectly but that it had made no difference to our VAT in the end. He advised us how to account in the future, which we’ve done. But haven’t had a VAT inspection for over 5 years! Self assessment obviously rules including for the wunch of bankers. It’s just they don’t have any penalties…
I agree with all of that
no gain/no loss spousal transfers are clearly envisaged by legislation and have been known to HMRC for as long as the legislation has existed (1990/91).
There is lots on it in HMRC’s manuals.
They even envisage and accept polygamous marriages would fall within the legislation (if polygamy was lawful in the country where the marriages took place).
They also give examples where A is married to B and transfers an asset to B. They then get divorced and B remarries C. B can transfer the asset to C under the legislation. B&C could even be together as a result of a civil partnership after A&B
Clearly neither HMG nor HMRC regard this as harmful. It’s clearly within the letter and spirit as HMG & HMRC see it.
Any individual not taking advantage of this might as well voluntarily add 5% to their income tax rate while they are at it.
I answered in the context of Richard’s letter
Your answer is of course correct
He was implying he thought not
Richard M
My apologies if you thought I was replying to you, I was replying to Richard (the other one!).
Regards
Just to set the record straight, I have no concerns about using the spousal exemption transfer legislation for CGT on the basis that it is clearly laid out in the legislation. I asked the question because I thought Richard had expressed views against this in the past and I wanted to see how he would view this in light of the fair tax pledge. The reason here is that the CGT spousal exemption is tax avoidance pure and simple with no commercial or other justification except avoiding tax.
This highlights my concern with the fair tax pledge in that it means nothing, not even symbolically. There are, no doubt, some who would not countenance tax avoidance in any situation yet if they were to be advised to use this common exemption they could be seen as tax avoiders by others.
I think an interesting point to test would be to ask the general public “if you had the resources and ability to avoid tax legally would you do so?” The answer, I suspect would be informative
If the law permits is, explicitly, is it within the spirit of the law?
If yes then it can be done by a person who wants to sign the Pledge
Some may not do what the law permits
That is another issue
But you have, as ever, set up a straw man and a lousy one at that
I believe in this case the husband would be liable for CGT from the time the wife purchased the shares so in effect the tax liable would be the same. https://www.gov.uk/capital-gains-tax/gifts
But I agree it is a difficult pledge to make, I do reduce my taxation somewhat by “tax avoidance” but then I still pay over a third of what I earn in corporation tax, income tax and national insurance. Do I break points 3 and 4? I’m certainly not avoiding taxation like some wealthy people who pay next to nothing but it is still a reasonably large sum to me so is it abusive? Would you be in the spirit of the law if the law works that you pay no tax (cue CEO of Acme Corp poker faced on TV “I can confirm Acme Corp pays its full UK tax obligations”)? I would say somewhat ironically that the fact that I doubt these points probably means I am more likely to be meeting these clauses than others in a similar position…
On tax havens I have been offered schemes to reduce my taxation significantly but felt it was not right to pay nothing in tax and 10-20% of my income to an accountant who was making it possible. One of these schemes was by an Australian who boasted of living cheaply in London in a nice council house while he scammed millions from the government, another told me it was a scheme that would never be closed as it was used extensively by MPs and the royal family.
You decide
That’s what we’re asking you to do
Is that do hard?
If so, why?
How does the fair tax pledge view aiding and abetting?
Caroline Lucas accepted campaign donations from Vivienne Westwood, whose business interests are structured through (legal) offshore vehicles. It’s not clear whether she gave personally or through a company, which would avoided tax.
The Greens also accepted money from Dale Vince via Ecotricity in order to save on tax. http://www.dailymail.co.uk/wires/reuters/article-3058812/For-UK-political-donors-unintended-tax-break.html
I know that Dr Lucas is seen as an ally, but politicians always have special interests, and should be held strictly to account. I am concerned she is using the tax pledge to whitewash her party, when they are involved in some quite hypocritical donor activity.
Thoughts?
Read the pledge
Your claim is ridiculous
I doubt if my MP knows what ‘Fair Tax’ means:o(
Sorry, but for personal reasons I could not be with use at the conference yesterday, but by all accounts it went well.
As someone working in the tax profession I think this could really take off. You would not believe thew number of clients who come to me with, I kid you not, a sainsburys shopping bag of unsorted receipts and expect me to complete their tax return for them. They simply do not have a clue about tax, tax rules, tax relief schemes or anything of that sort, they just want me to sort it all out for them. I’ve often thought about how vulnerable they would be to someone less scrupulous than myself, who could tell them anything and they would believe it. So I really like the idea of involving individuals from the profession in the pledge.
Of course, I’ve signed the pledge and written to my MP Emily Thornberry asking her to do the same. I’m not confident she will, but I’ll keep the pressure on.
Many thanks
I recall those plastic bags….
The phrase “spirit of the law” is too vague. Is “the spirit of the law” that the upper rate tax threshold is £42,385 so anything over that you should be paying as near as possible to 40%, or is it that the law allows deductions to be made which may be quite significant and as these deductions are legal paying a lower amount would be within “the spirit of the law” (and perhaps I would not be in “spirit of the law” if I did not choose to lower my tax payments as much as the law allowed?)
I am sorry – but this discussion has been had so many times there is now no one serious really doubting that there is a spirit of the law
Nothing here says you may not lower your tax bill
It does say you must not do so artificially
The distinction is clear – and the law provides very clear guidance to those who want to find it. If something ois clearly permitted you may do it. If not, you can’t.
So purely following the law is what is required?
No, clearly not
“If something ois clearly permitted you may do it. If not, you can’t”
So why do you say that the CFC reforms (which allow UK companies to set up overseas finance companies which pay tax at 5%) enable tax avoidance? The law clearly provides that companies which meet the conditions pay tax at 5%. So how is that tax avoidance?
One can disagree with the law which allows them to do so, but you can’t call it tax avoidance.
We have now very clearly established UK tax law that says something apparently legal can still be abusive and so not permitted
I helped write the official guidance on that law
I do wonder why people like you Chris seem so unaware of this duality that does very clearly allow activity that is legal to be called tax avoidance