There has been a high profile campaign recently in the Press and Media about tax avoidance schemes. A well known comedian was exposed as using a scheme called K2, which I thought was a mountain in the Himalayas, and other schemes have been described as “morally repugnant”.
Surely this campaign is wide of the mark. Nobody likes paying more tax than they have to, it’s a fact of life, and if there are perfectly legal ways to reduce the tax bill, for the life of me I cannot understand how this can be “morally repugnant”.
Tax laws are not black and white, but several filthy shades of grey, to coin a phrase. A distinction must be drawn between tax avoidance and tax evasion, and this is for the Treasury to address, but to accuse celebrities and other high earners of morally repugnant behaviour in legally avoiding tax is disingenuous, and is attacking the problem from the wrong direction.
If “morally repugnant” equates to illegal, then the avoiders become evaders and should be prosecuted. There are reports of “cowboy tax advisers” peddling crude tax avoidance schemes that are unlikely to be successful once scrutinised by the Inland Revenue. If this is true, then surely these schemes are illegal.
Yesterday there was a rant about paying traders in cash, presumably to help them avoid tax, but to suggest that those of us who pay cash are somehow complicit is absurd.
Greater transparency by the taxpayer is to be encouraged, but K2 wouldn’t have attracted law abiding high earners if it had been illegal, so don’t shoot the messenger if you don’t like the message. Change it!
With transparency in mind, I claim the cost of The Times against tax, because it is the authorised publisher of current law reports, and has been for 150 years. To satisfy the taxman that my claim is bona fide, you may wish to know that according to the Supreme Court, in their judgment handed down on the 18th July 2012, a local planning authority (Wolverhampton City Council) is entitled to have regard to the compensation that it might have to pay to the developer should it decide to revoke a planning permission it had previously granted. Pretty obvious really! It’s all to do with section 70 of the Town and Country Planning Act 1990, as qualified by section 97. In making a decision under either section of the Act, the authority was, by section 70 (2) and section 97 (2) respectively, to have regard to the development plan and “other material considerations”. Finally, you ignore the impact of section 107 of the Act at your peril.