Tax Avoidance. Not What It Used To Be. Apparently.
I don’t suppose you need me to tell you that there are anomalies in the Tax laws of this Country. There’s one at the end of this blog.
As I have mentioned before it used to be quite simple to understand what a Tax payer should do.
A Tax payer should pay Tax on his earnings/gains in accordance with the Law. That used to be all there was to it.
A person could consider the Law and always work entirely within it but was allowed do so in such a way as to minimise his Tax liability. That sensible concern for one’s affairs is called “Tax Avoidance” and is still perfectly legal.
A person should not cheat the Revenue by misrepresenting his income and gains so as to reduce the amount of Tax which he should pay – that is the crime of Tax evasion!
In recent years the Government [and the Press] has deliberately muddied the water.
The Government now has produced a pamphlet writing about the “Problem” [their word] of Tax Avoidance. Which even in the pamphlet itself is stated to be “not in itself illegal”. Whatever the meaning if any of the usage “in itself” in that sentence, the Treasury has deliberately linked the word “Avoidance” with the word “Illegal”.
Just as Orwell’s Big Brother might refer to the Taj Mahal as “Not in itself Ugly”.
I suppose the “in itself” has been added so that the clearer usage “Not Illegal” is Avoided. Because, the truth is that Avoidance is not illegal. And why on earth would the Treasury want to be clear about that?
The definition of the “problem” of Tax Avoidance given by the Government is:
“Using the Tax laws of the Country to get a Tax advantage that Parliament never intended”.
The Government is thereby admitting that it is not capable of writing down the laws which it actually intends and, also, views it as very naughty indeed that people should
1. Fail to guess what Parliament really meant and then after that
2. Fail to behave in accordance with their [subjective] interpretation of the intention behind the Law, as opposed to obeying the Laws which were actually written down but not intended.
3. Is that all clear?
The pamphlet is saying that if the Farmer [the Treasury] unintentionally leaves the Abattoir gate open then we the sheep [the Citizens of UK] should not run away to freedom from certain death but rather take the view that leaving the gate open is not what the Farmer intended and therefore choose to hang around to be slaughtered.
Are you aware of the joke of the irregular English verb? An example,
I am firm,
You are obstinate,
He is a pig headed fool.
It seems to me that the problem with the current bad press on Tax Avoidance is an example of such an irregular verb – it goes –
I put my affairs in order,
You sail somewhat close the wind,
He should definitely go straight to jail.
In a Country where the Government is telling us that doing what is perfectly legal as a result of its inability to frame Laws which mean what was intended is to be considered a problem– and yet the same Government comes up with Tax Avoidance schemes such as EIS and SEIS and ISAs in every budget and gives Tax relief on some pension contributions and encourages us to take advantage of these Tax Avoidance methods [Tax Avoidance being a problem remember] the temptation is to abandon trying to understand any of this and simply laugh at it instead!
The anomaly? How about a recent piece of news – here- that the Tax authorities have charged a Student a Tax penalty of £1,300.00 for failing to make a Tax return which would likely have shown that no Tax was payable.
Because of a quirk of partnership Tax law the particular student is not allowed to appeal. This presumably is an anomaly and an example of not being “what Parliament was intending”.
Remember how the Government pamphlet [link here] wishes to rap our knuckles for taking financial gain from Laws which do not reflect what Parliament intended? Nobody should benefit from doing that apparently. Except in this case of course the Treasury, which has taken the fine, can benefit. Thank you very much.
Of course you can laugh or cry, your choice
Anyway, from consideration of a world of Double Standards, Newspeak and the Taxman and things you can’t do much about, back to work.
Do please get in touch whenever I can assist and whenever you have a legal issue which has any foreign element. As ever, email@example.com or phone me or Louise +44 (0) 1138160116