The British Income Tax System

In today’s Morning Ipswich Morning Star Captain Mainwaring in talking about Jimmy Carr’s tax arrangements.

I’m not going to comment on the soviet republic of Ipswich Politburo General Secretaries take on it because the media have confused the whole thing. Tax Avoidance is legal and Tax Evasion is illegal but the media has blurred the distinction by using the two terms interchangeably for both practices. As if the fact that the last Labour government made our tax system so complicated, people with PhD’s can’t make head or tail of it, wasn’t bad enough.

The tax system needs simplifying but if the present government simplified it Labour would claim that it was for the benefit of rich people like Ed Milliband, Harriet Harman, Ed Balls, Jack Dromy, Yvette Cooper etc.

I think that whatever any government does to stop excessive tax avoidance, a decent accountant would find a way around it. This does not mean the government shouldn’t try.

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9 Responses to The British Income Tax System

  1. Mo says:

    A good start would be to close down the several Britsh-owned tax havens, which make this kind of avoidance so easy at the moment. I can see no justification for allowing them to persist, annually sucking what must be billions of pounds out of our economy.

    (Not to mention that they are also widely used by crooked leaders of other countries to help rip off their own people, so we’d be doing the rest of the world a favour too.)

    • Yes Mo, the Swiss would love it. :)

      • Mo says:

        By that argument we would have to permit any profitable practice, however immoral, if it happens to be legal in another country. Not a very good basis for policy-making!

        International agreement is step 2. But we have to put our own house in order first.

  2. It’s not just British people who put their money in British owned tax havens. With Hollande’s planed 75% top rate of tax, Jersey ‘s going to have a roaring trade.

    • Stephen says:

      After Hollande, Cuisses de grenouilles will be on every pub menu in Britain. From that perspective, we are the tax haven.
      Of course, tax avoidance is actually legal but tax avoidance whilst criticising others for it (eg Livingstone) is hypocritical.

      • No one with the kind of money Jimmy Carr has should be getting away with paying 1% though.

      • Mo says:

        It is indeed legal. Which was what made me rather surprised when the Prime Minister decided to identify it as “morally wrong”. Is this an indicator of a policy direction, or just a gratuitous observation?

        (You’re quite right, of course, that Cameron is disgustingly hypocritical to condemn tax avoidance while having gained so greatly from it himself. But that wasn’t so surprising.)

      • The definition of hypocritical and morally wrong is this bloke.

  3. Stephen says:

    The income tax system must become simpler – with a higher basic allowance and fewer loopholes, there must be less avoidance (legal and varying in morality) and more classified as evasion (blatantly illegal and easier to deal with). Those who wish to trade in Britain and pay full tax under 45% (or 40% soon) top rate instead of Hollande’s 75% rate must be made welcome.
    This is already happening. Rates have been re-simplified towards two, Labour having introduced a 50% a month before their departure .The Saatchi-Warburton Report (“Poor people: Pay less tax”) is being implemented to raise the threshold and take low earners out completely. A General Anti-Avoidance Rule, to close loopholes, is already in the pipeline.

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