You'll be telling us next that Tesco are taking these actions in the interests of their customers.
er right - so say the Government had calculated that they would get say 100 million in tax from Tescos for a particular part of tax legislation.
Tesco say to themselves - lets see if we can find any loop holes here and then Tesco spend 1 million on measures purely to avoid this tax.
I wonder what the Government will do re the 99 million short-fall: either just say oh sod it - or perhaps try and raise it in a different way - which will most likely cost Joe Public more in the long run.
So following your logic, "tax avoidance" is bad if I have to pay a fee to an adviser to reduce my tax bill. That's quite amusing - since Large Co plc can't calculate its tax bill without paying a fee (or salary) to a tax expert.
As for the consequences of Corp Tax being less then the treasury anticipated, it is almost certainly far smaller than the variations in CT resulting from future profit fluctuations and so is trivial in comparison. Of course, the shortfall in tax take could be made up either by increasing taxes on others (e.g. you and me), or by closing the loop-hole and thereby reducing shareholder value. Which would you prefer - more tax now, or watching your pension fund (aka Large Coy's shareholders) being diluted?
The tax laws change regularly - sometimes quite drastically. How is a person supposed to know what Parliament intended?
It is for the government to decide how to raise the money they need and to draft the appropriate rules to ensure that that is how it is raised.
How do you know what is and is not against the intent of Parliament? we *must* assume that Parliament intended to collect taxes in strict accordance with the rules they set out. No more and no less.
If you earn less than the minimum taxable income, but are able to live comfortably because your partner provides for all your needs so your wages are entirely disposable income, would you send some of your income to the government? After all, it could be that the government only intended the tax exemption to apply to people who are struggling to make ends meet, and so it is wrong of you to take advantage of the "loophole" by failing to pay tax on money that you only need for luxuries.
Or maybe Parliament calculated its income from VAT based on a certain average spend per person. If a recession lowers that spend from what was predicted, should the supermarkets take it upon themselves to raise the percentage of VAT they collect in order to give the government the amount they intended to collect?
Sorry, but if the government made a c*ck-up by failing to draft rules that reflected their intentions, then tough tittie. They'll have to correct it next year.
That is not at all what I said - you probably didn't read the bit where I said that some "tax avoidance" was quite reasonable. There is a significant difference to someone going to see a tax adviser on how to manage their finances effectively with-in the established law, and a large corporation spending millions on looking for loop-holes.
I assume that you would rather the Government spent extra millions (perhaps similar amounts to those which companies spend on avoiding taxes) on making every tax law absolutely water-tight and then passed the costs on to you would you?
They would not need to pass the cost on to me, because it would be recouped many times over from the gain in taxes that would otherwise have been avoided.
It is therefore logical to assume that the so-called "loop hoiles" are not mistakes at all, but exactly what the government actually intended.
My challenge to you is how do you distinguish between reasonable and unreasonable. You now seem to be saying loop-holes are unreasonable, but paying for advice to minimise tax is reasonable. Since when is exploiting "loop-holes" illegal?
Tesco's spend on tax advice is a much smaller % of their t/o or profits than it is for the average small s/e trader, seeking advice "on how to manage their finances effectively within the established law".
No; I'm sure that Tesco are simply obeying the law which instructs them to maximise shareholder value rather than having any altruistic motive. However, since they make their money from the likes of me, it is in their interests to persuade me to keep shopping at their establishments, and one way of doing that is to use the money they save in taxes to keep prices down.
Well, ideally the government will realise that their tax policies aren't working and change them so that it's no longer cost-effective for Tesco et al to move their tax liability outside the UK. I appreciate that's probably something of a forlorn hope, though.
How, other than reading the relevant legislation, can you know what the wishes and intentions of parliament are? If the laws on tax are written in such a way as to make one course of action more cost-effective than another, it's not unreasonable to assume that the more cost-effective choice is actually the one the government wants you to take. That's why, for example, LPG is a lot cheaper than petrol or diesel - it's because the government wants to encourage people to switch to using it. If Tesco paid millions to convert all its vehicles to LPG, do you think that would be an immoral or improper use of money spent in order to reduce tax?
The fact is that the government has created a tax regime which makes it financially worthwhile for large corporations to switch their accounting base to other countries - just like it has created a tax regime which makes it financially worthwhile for people to switch to using LPG instead of petrol. Whatever you may think about the morality of the government for making that choice possible, it's unreasonable to blame anyone who is able to take advantage of it for doing so.
No, I'm not happy that the government has created a tax regime which actually encourages large corporations to take their tax liability out of the country. But I don't blame the corporations for that, any more than I blame people with LPG cars for the fact that they get their fuel a lot cheaper than me.
If something really is against the intent of parliament then the law can be changed. I suspect, actually, that the current system is in fact what the government wants, even though it may well not be willing to admit to it publicly.
Now can you explain just what the difference is between "managing finances effectively within the existing legislation", and "looking for loop-holes".
I can't see any real difference, and I don't imagine most people can either,.
By definition, if it is a legally exploitable loophole, then it falls "within the existing legislation".
And if it is available to you, and cost effective, and you *don't* take advantage, then you are hardly "managing your finances effectively".
how, exactly, do you distinguish between something which is a "loophole" but legal, and any other way of managing your finances effectively within the existing legislation.
I have never said anything which would lead a reasonable person to draw that conclusion.
It is true to say that I support libertarian rather than authoritarian principles, but it would take a huge leap in the dark to infer from that, that I am "anti-authority" - & a far greater second one - to conclude I would ever remotely support the proposition that Taxation is evil.
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