Poll on attitudes to tax

[king_pellinor]

"Taxation" magazine is doing a survey to see if the public's attitude to tax avoidance/evasion/planning is what the Government thinks it is.  Can I ask people to have a quick go at it, to inform the debate a bit?  It's all anonymous.

http://bit.ly/TaxHowFar

Comments

[pellegrina.livejournal.com]

I am not having a go at it, because the questions are all unrealistic and seem rather leading. Apart from the fact that I am not and never will be a higher rate taxpayer, there's a lot of "if you're sure you would never be found out" and a general background atmosphere of "everyone else is doing these dodges you've never even heard of, you're a mug if you don't".

[pellegrina.livejournal.com]

I should explain that my objection to "if you're sure you would never be found out" is that this is not a realistic hypothesis, at least for a worrywart. I would never be sure. Maybe it's just paranoia keeping me honest, but the awareness of people way richer than me happily arranging their affairs because they can afford the accountants really does make me feel stupid for not wanting to take the risk of being caught, or the time to work out what I could get away with if I had the bottle. This may be the legacy of growing up in Italy!

[king-pellinor.livejournal.com]

It won't let me back in to review the questions, now that I've done it.

Are things like "20% off for cash", or "someone gives you a £50 tip" all that unrealistic?

I agree about the "never being found out" side of things, but then that's because I have professional distate for that approach and knowledge of how it probably won't be the case. But I think many people are more optimistically black and white in their thinking about this sort of thing.

[pellegrina.livejournal.com]

Well, I've never been in a position to purchase something where a cash discount would even be offered, and given the antigravity afflicting house prices in the southeast and the difficulty for both of us of finding lasting employment elsewhere, the prospects of ever having any involvement with paying builders or similar seem remote. The few times I've been offered tips for doing my job I've declined, or insisted on payment in chocolate to share with colleagues if the tipper was insistent, as per council regulations. I admit I accepted the half-kilo of cheese from Italy, though, with gratitude and greed, but it would have been hard to declare as income and in that job there was no rule on gratuities.

[king-pellinor.livejournal.com]

Strictly, chocolate and cheese may well be taxable.

Hard to declare, as you say, and determining the market value of a lump of second-hand cheese is tricky, but still taxable.

[bunn.livejournal.com]

I wouldn't call myself a worrywart, but I agree, you never would be sure, and therefore all those questions have to be 'No' for me.

I also wanted to quibble with the questions - In particular the 'would you run a small business as a company' - surely the answer to that is not just about tax! And I do wonder about the small business where the owner's spouse is 100% trustworthy, but does no work at all in the business. Doesn't sound like any of the small businesses that I work with, and I wondered how exactly 'work' is being defined...

[philmophlegm.livejournal.com]

Can't you role-play the part of a slightly richer person...?

[pellegrina.livejournal.com]

Not with any conviction!

[philmophlegm.livejournal.com]

Never done the whole "Let's play this campaign as a bunch of evil PCs!" thing...?

[pellegrina.livejournal.com]

Er, no... I'm not a very good role-player, really, for the same reasons I am an appalling salesperson.

[bunn.livejournal.com]

Surely that's not about income or wealth, so much as position in the economy? I suspect there are a lot of people who earn very little indeed, who pay cash for things in order to make the best of small and casually earned incomes. (Actually, I *know* there are...)

[philmophlegm.livejournal.com]

And who use that system of cash payments to get around having to pay VAT...?


HMRC has a name for people like that. (Of course it's not a problem if neither party is big enough to be VAT-registered, which in that scenario is possible.)

[king-pellinor.livejournal.com]

I believe the name for that in Customs is "everyone".

[philmophlegm.livejournal.com]

Done.

Do you want to accept comments on this, or would you rather avoid that so as not to bias people taking the survey?

[king-pellinor.livejournal.com]

I don't mind, it's not my survey :-)

[philmophlegm.livejournal.com]

Well ok then, I'll admit to being an evil tax avoider.

I have an ISA.
I have an occupational pension scheme.
One of my employers pays me dividends out of post-tax profits rather than salary out of pre-tax profits.
My other employer lets me have more holiday (which isn't taxed or NIed) instead of more salary (which is).
I include professional subscriptions on my tax return.
I tick the Gift Aid box.

I'm intrigued that now it's somehow morally reprehensible to not pay tax that you aren't actually obliged to. I note however, that it is perfectly acceptable (encouraged even) to obtain state benefits that you don't need. If tax avoidance like the measures I mentioned above is now appalling, then so should (in my own case) free medicines when I could afford to pay for them. (I don't even have to pay prescription charges.)

Other forms of tax avoidance seem to be acceptable. Cycling instead of driving for example. This avoids road fund licence, fuel duty and VAT - three whole taxes! So shouldn't cyclists come in for lots of tax avoidance criticism? People like me with high-performance, super-unleaded-guzzling sports cars should be praised by the anti-avoidance crowd. We're really doing our bit, unlike those immoral cyclists or walkers.

How about not flying? Or not watching television? Or not buying stuff? All activities which actively avoid tax far more efficiently and effectively than any Jersey-based trust.

I don't get it.

Unless the difference between acceptable tax planning and morally repugnant and aggressive tax avoidance is simply "Stuff that I do: acceptable tax planning; stuff that people that I'm jealous of or just don't like do: morally repugnant and agressive tax avoidance."

[king-pellinor.livejournal.com]

It's an irregular verb:

I take acceptable steps to mitigate my liability
You use legal planning of questionable morality
He's a filthy cheat

[wellinghall.livejournal.com]

Yep.

[bunn.livejournal.com]

I don't think that's what the survey is asking about though is it? Or, most of the questions aren't. Most of the questions (2,3,4,7,9, 10) seem to be about not paying tax that is supposed to be paid but you haven't actually had a demand for, and hoping you won't get found out.

Not getting found out is not 'avoidance' surely, or am I missing something?

[philmophlegm.livejournal.com]

Some of the questions seem to be asking about illegal tax evasion that you think you can get away with (perhaps because it would be hard for HMRC to spot or because "everyone does it") while others seem to be asking about legal tax avoidance that some people would think was somehow morally wrong. So I suspect the survey is actually trying to determine if people think that the first is ok while the second is bad or vice versa or both are fine or both are bad or if people are just inconsistent hypocrites.

[wellinghall.livejournal.com]

Don't eat out. If you want a take-away, get a pasty instead of fish'n'chips. Have chocolate chip cookies instead of chocolate coated biscuits. Drink bitters. Put money into a pension.

[beckyc.livejournal.com]

then so should (in my own case) free medicines when I could afford to pay for them. (I don't even have to pay prescription charges.)

I have similarly wondered what circumstances it was morally sound to get OTC meds on prescription and thus not have to pay extra for them given that I have enough prescription-only medicines that I have a prepayment certificate anyway.

Usually pragmatism wins out over morals (e.g. not wasting GP time with trivia = buy OTC vs going abroad = get a GP letter and prescription for everything that might be controlled in the countries I'm visiting or cause serious health problems if confiscated/lost)

[wellinghall.livejournal.com]

In my spring and summer part-time job through upper school and university, my working pattern varied considerably from week to week, and so did my wages. This often meant that I earned more than the Lower Earnings Limit one week (and so paid National Insurance), and less than the LEL the next (and did not get a rebate).

No, I know it's not really relevant.

[kargicq.livejournal.com]

If it's any comfort, personally I would have been happy for you to smooth that out by being paid monthly, and would not have accused you of Jimmy Carr-style tax dodging!
Which also makes me realise that my attitude is also influenced by the wealth of the taxpayer in question. If you are a wealthy comedian, I think it's a bit sad to go to great lengths to wriggle out of tax, even legally. Just pay your sodding income tax like the rest of us do on our PAYE! If you are a low-paid worker for whom that extra £20 will really make a difference, I'm much more sympathetic. It's a bit like that in restaurants isn't it, splitting the bill after a communal meal. I wouldn't mind a student being picky about only paying for exactly what they had (and would try and ensure they were subsidised anyway), but I would raise my eyebrows if someone I knew to be a higher-rate taxpayer was arguing that they should have £3.50 knocked off their bill because they only had the pasta or whatever :-)
N

[king-pellinor.livejournal.com]

PAYE smooths it out for income tax, it's just that NI works on a more archaic basis that assumes weekly pay packets. Eliminating that sort of lumpiness is on the agenda, at last (rather than just being vaguely mentioned).

I recently put together a template spreadsheet for working out someone's NI liability, assuming they might have a combination of employment income and self-employment income. I basically gave up and just approximated it to annual amounts spread evenly through the year: it is simply not possible to work out the exact liability for either set of income without knowing the exact dates and amount of every payment - never mind the interaction of the two.

If you can routinely change the liability by changing payment dates, the tax isn't well thought out (obviously changes in rate are a different matter). And if you can't predict your liability as a result, ditto.

I try to ensure that student types are subsidised when splitting bills - buy them a drink, for example, knowing that there won't be rounds so they only have tp pay for the food; or grab the bill, pay on my card, and take a tenner in cash when strictly it should perhaps have been £11.50 before the tip, or something.