Champagne socialist Joey named in tax avoidance scheme.

bfcjg · Post by **bfcjg** » Mon Jun 05, 2017 1:06 pm

Looks like Joey Barton's finances will take another hit following the government winning a case against the hundred or so investors who were part of a tax avoidance scheme. Didn't he constantly go on about being a socialist and we are all equal ? Hopefully some of his tax can now be used to pay doctors, nurses teachers pensioners etc.

"JOEY Barton, the Clarets midfielder, has been named among a raft of sporting and TV stars to be involved in a £700million tax relief scheme.

The Burnley FC and Rangers star’s name appears alongside the likes of David and Victoria Beckham, TV presenters Declan Donnelly and Anthony McPartlin in Companies House files relating to finance firm Ingenious.

Under the tax relief scheme, investments were made in a number of movies, including James Cameron’s Avatar.

Sir Alex Ferguson, fellow Spice Girls Geri Halliwell and Melanie Chisholm and ex-footballers Steven Gerrard, Jamie Carragher and Emile Heskey are also said to have been on the books of Ingenious. "
"Lawyers representing HM Revenues and Customs have argued before tax tribunals that the scheme was not a legitimate investment opportunity but rather a means of avoiding tax.

A ruling on the tax relief scheme was upheld this week that the incentives were not 'allowable deductions'.

This could mean that investors, thought to number more than 100, will now be facing higher tax bills, though Ingenious itself is said to be appealing the ruling.

It has not been claimed the scheme, which was also used by This Morning presenter Philip Schofield, pop star Robbie Williams and ex-Celtic and Bolton boss Neil Lennon, was doing anything illegal. "

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claretandy · Post by **claretandy** » Mon Jun 05, 2017 1:32 pm

That other champagne socialist garry Lineker is also upto his neck as well, that's the thing with champagne socialists , they want everyone but them to pay extra tax.

dsr · Post by **dsr** » Mon Jun 05, 2017 1:39 pm

The government offered tax breaks on investment in the UK film industry, most of it invested between 2004 and 2007. Unfortunately the rules were so unclear that 13+ years later, no-one actually knows what they are. That's what the series of tribunals, still ongoing, is trying to find out. Quote from the current tribunal judge: "After declining to overturn last summer's original ruling, tribunal judge Charles Hellier admitted it was a tough call. 'We have not found this an easy decision, and are comforted by the fact that others have had similar difficulties with the concept of capital.' "

http://citywire.co.uk/wealth-manager/ne ... th-manager" onclick="window.open(this.href);return false;

nil_desperandum · Post by **nil_desperandum** » Mon Jun 05, 2017 1:44 pm

I'll bet there's nobody on this board who doesn't do as much as possible to pay as little tax as possible, and many people on here probably pay into schemes that offer tax relief.
Now, I'm not defending the scheme, and I do actually believe that the rules on these things should be tightened up, and where possible abolished.
However, I don't think there's anything here to suggest that they've done anything illegal or dishonest. It's just that a ruling has been made that says that these are not "allowable deductions".
I don't think someone's personal politics come into this. If your tax adviser recommends in investing in something that offers tax relief, (and in this case is supporting the film industry), then I don't think we should be too judgmental. It seems quite clear that they won't be getting their tax relief, but that they've done nothing wrong.
Edit:
DSR goes further in explaining this in post 3.

Rowls · Post by **Rowls** » Mon Jun 05, 2017 2:09 pm

I don't actually recall Joey spouting much about politics tbh.

The real hypocrites from those listed above would be Alex Ferguson and Gary Lineker however the OP quoting whatever article only states "also said to have been on the books" of the accountancy firm and the only mention of Lineker comes from a poster here.

Shore claret · Post by **Shore claret** » Mon Jun 05, 2017 2:21 pm

I know very little about tax but I know there are a few financial experts who post on here.
would it not be easier to have a very simple tax system, and then this would render these complex systems obsolete.
also what do they mean when they say tax avoidance, is this just a white collar crime that people at the higher end earning bracket are using.

dsr · Post by **dsr** » Mon Jun 05, 2017 2:33 pm

Tax avoidance isn't a crime at all. Tax avoidance is using the laws to minimize the amount of tax you pay. It can be as simple as paying your (otherwise unemployed) spouse a smallish sum to act as your receptionist/telephonist/bookkeeper/secretary, or as complicated as systems of overseas trusts and companies to keep your money offshore. There have been numerous government schemes to encourage various types of investment, eg. forestry, AIM companies, and this film one, in the past; the idea of this one was to encourage people to invest in the UK film industry by giving them generous tax breaks.

Tax evasion is where you illegally avoid tax. Eg. Lester Piggott's undeclared income, or a builder who takes cash and doesn't declare it, or another of these complicated offshore schemes that oversteps the line and becomes illegal. There have been quite a lot of mostly successful deals of late, where people can hold their hands up to having money overseas that they should have paid tax on, pay all the tax they ought to have paid in the first place, and get a fine of perhaps 10% of the tax. (As opposed to 100% if they hadn't owned up but had been caught anyway.)

This scheme was nothing like that. The investors thought they had a more-or-less no loss scheme, claimed their tax relief on their tax returns in the normal way, and found out years after the event that what they and their advisers thought was the law, was not. You could perhaps argue that they were greedy and shouldn't have been trying to save tax in this way; but there's no suggestion that they were criminal.

nil_desperandum · Post by **nil_desperandum** » Mon Jun 05, 2017 2:34 pm

Shore claret wrote: also what do they mean when they say tax avoidance, is this just a white collar crime that people at the higher end earning bracket are using.

There are many on here far better qualified than me to go into details, but at its simplest you can avoid tax by (e,g,) paying into a pension scheme which offers tax relief.
Throughout my career (e.g.) substantial pension contributions were deducted before the remainder of my salary was taxed. No one really questions this, but then there are other things which are potentially tax deductible, and often the tax office have to make a judgement on this. (e.g. the business use proportion of your car for a self-employed person).
Then of course there are all the other rather more "creative" schemes that have been set up to try to avoid paying tax. It would appear that investing in the British Film Industry is no longer permissible.
However, be aware that avoiding tax, or trying to do so, is very different to tax evasion or fraud.

Imploding Turtle · Post by **Imploding Turtle** » Mon Jun 05, 2017 2:37 pm

So how about we get rid of tax avoidance schemes altogether?

Of are you only interested in criticising them when people whose political views you dislike use them?

Rowls · Post by **Rowls** » Mon Jun 05, 2017 2:38 pm

Well said dsr and the people to blame for this are whoever worked for Gordon Brown drafting the legislation.

The only thing I would add to your excellent precis of tax avoidance is that a number of people now talk about paying tax as being a moral obligation (rather than a legal duty) and when they are discovered to be lowering their tax bills it highlights the dangers and many hypocrisies in that way of thinking.

nil_desperandum · Post by **nil_desperandum** » Mon Jun 05, 2017 2:42 pm

Imploding Turtle wrote:So how about we get rid of tax avoidance schemes altogether?

Surely that depends on your definition of tax avoidance.?
If you are self-employed and your job requires you to travel to various places in the world, is it tax avoidance to set your flight costs and accommodation against tax? And as I mentioned before, what about paying into pensions?
Should this not be encouraged by offering tax relief?

Imploding Turtle · Post by **Imploding Turtle** » Mon Jun 05, 2017 3:09 pm

nil_desperandum wrote:Surely that depends on your definition of tax avoidance.?
If you are self-employed and your job requires you to travel to various places in the world, is it tax avoidance to set your flight costs and accommodation against tax? And as I mentioned before, what about paying into pensions?
Should this not be encouraged by offering tax relief?

Yes. I was being inexact in favour of brevity to make a point.

Rowls · Post by **Rowls** » Mon Jun 05, 2017 3:17 pm

This is the problem with those who get evangelical about tax avoidance.

It only works as a vague idea. Once you get into the detail you find it a whole lot harder to define what you meant and what the consequences are.

This whole sorry mess (created by a 'tax break' for the entertainment industry) should be a lesson for all those.

And it should serve as a warning to those who imagine a man as incompetent as Jeremy Corbyn will wheedle a whopping £48 billion EXTRA in tax receipts for us all to enjoy in a Marxist Utopia.

aggi · Post by **aggi** » Mon Jun 05, 2017 3:32 pm

Tax avoidance in many areas is pretty reasonable. It's nice to have a straightforward tax policy with no loopholes, but then someone finds a loophole so you have to bring in some specific wording to close the loophole (for instance, should clothing be tax allowable? There's certainly a case that hi-vis and similar protective gear should be for builders, and probably nurses' uniforms {they're not going to be used for much other than work}, but then what about a suit for a lawyer, it is the uniform but should a £500 suit be tax deductible).

Or you want to promote investment in a particular area, encourage people to save (ISAs, pensions, premium bonds), etc etc

That being said, I seem to remember we have the longest tax legislation of any nation, Hong Kong for instance is much, much simpler. However, attempting to re-write our hodge-podge of tax laws would be a huge effort that no politician is going to take on.

claretandy · Post by **claretandy** » Mon Jun 05, 2017 3:35 pm

Rowls wrote:I don't actually recall Joey spouting much about politics tbh.

The real hypocrites from those listed above would be Alex Ferguson and Gary Lineker however the OP quoting whatever article only states "also said to have been on the books" of the accountancy firm and the only mention of Lineker comes from a poster here.

Joey came out for Corbyn yesterday on twitter, i'd say champagne socialist describes him pretty well.

Rowls · Post by **Rowls** » Mon Jun 05, 2017 3:40 pm

Fair enough then.

TVC15 · Post by **TVC15** » Mon Jun 05, 2017 3:54 pm

Unlike tax evasion it is not criminal - that`s correct.

However - (and this is nothing to do with being "evangelical" Rowls !)....this is not a scheme I would compare to somebody setting up a limited company and putting things like working from home expenses through his books.

The purpose of this scheme was not altruistic - its not like these people wanted to invest in the film industry. It was a loophole and interpretation of vague tax laws lawyers, accountants and financial advisor decided to try and exploit. People then get greedy when they hear others who move in the same circles have managed to limit their tax and before you know it their is a lot of tax getting "avoided" by some very wealthy people.

Sir Alex Ferguson - the great union labour man....I`m not surprised with this at all as I know from personal experience that he was not the greatest lover of tax 25 years ago when he took cash for after dinner speaking (allegedly !)

The tax authorities are not blameless here as I`m assuming that someone / somewhere said (or at least intimated) that the scheme was ok. If that was not the case then situations like this could be avoided at the outset by the authorities having to approve these schemes before anybody can use them - thus also protecting any future claw back.

The people who involved are certainly not blameless - they can say they took the advice of their accountant or whoever but they know full well that what they were doing was reducing their tax through what at best was a loophole.

It`s ok coming out with all the cr-ap that anyone of us would do it if we were in the same position....well the simple fact is that most of us are not and we just pay our taxes as we are obliged to.

Pure greed from people who would still earn a fortune if they paid tax at the levels rest of us have to.

claretblue · Post by **claretblue** » Mon Jun 05, 2017 4:01 pm

'...I don't actually recall Joey spouting much about politics tbh...'

I think he once implied that Zlatan had his nose in the trough!

Rowls · Post by **Rowls** » Mon Jun 05, 2017 4:03 pm

Hi TVC15!

That's a considered response.

However, a few points:

TVC15 wrote:this is nothing to do with being "evangelical" Rowls !)....this is not a scheme I would compare to somebody setting up a limited company and putting things like working from home expenses through his books.
The purpose of this scheme was not altruistic - its not like these people wanted to invest in the film industry.

This is the point I was trying to make when I described the movement against tax avoidance as "evangelical" - they are not attempting to make clinical judgements on matters of whether tax is due or not; they are attempting to make moral judgements.

Certainly, you are not one of those whose tone is "screeching". You've written a considered and sensible post in response. But you are still making a moral point here. Tax is not about "altruism". It is about whether tax is due or tax is not due.

TVC15 wrote:The tax authorities are not blameless here as I`m assuming that someone / somewhere said (or at least intimated) that the scheme was ok.

That person would ultimately be Gordon Brown.

They wanted to encourage blockbuster movies and Hollywood to be produced in the UK. To an extent they have achieved that (many productions take place here) but the way it was drawn up was evidently flawed hence this farce going on years after the legislation.

Whilst it is annoying that many of the celebs who are caught in this trap have preached tax "holiness" to us mere plebs only to have been caught trying to minimize their own payments I do feel a tad sorry for them.

What would you do if your financial adviser told you that the Chancellor (Gordon Brown) had opened up a new scheme whereby if you invested in the entertainment industry you would have to pay less tax and it was all perfectly legal (as they believed it to be)?

Who in their right mind would say 'no thanks, I'm going to voluntarily pay more money to the government than I need to' ??

Charlotte Church, perhaps?

Paul Waine · Post by **Paul Waine** » Mon Jun 05, 2017 4:16 pm

nil_desperandum wrote:I'll bet there's nobody on this board who doesn't do as much as possible to pay as little tax as possible, and many people on here probably pay into schemes that offer tax relief.
Now, I'm not defending the scheme, and I do actually believe that the rules on these things should be tightened up, and where possible abolished.
However, I don't think there's anything here to suggest that they've done anything illegal or dishonest. It's just that a ruling has been made that says that these are not "allowable deductions".
I don't think someone's personal politics come into this. If your tax adviser recommends in investing in something that offers tax relief, (and in this case is supporting the film industry), then I don't think we should be too judgmental. It seems quite clear that they won't be getting their tax relief, but that they've done nothing wrong.
Edit:
DSR goes further in explaining this in post 3.

Hi nil_d, I'm one on this board (and I doubt I'm the only one) who was "cold called" by a "financial advisor" and offered "tax saving opportunity" in one of these "film schemes" - I said "no thanks" for two very good reasons: (1) they didn't appear to be legitimate ways to avoid tax - seemed much more to be tax evasion schemes and (2) I was not at that time - and never have been - earning the amounts that professional footballers can earn.

The citywire, wealth management link (post 3) is not an accurate report of these events (perhaps "wealth managers" were keen on these schemes). Gordon Brown was the Chancellor who set up these schemes - we might argue that he did it to benefit the UK film industry, or we might argue that he was persuaded by some of the "film sector lovies" who would save money by reducing their tax bills. Gordon Brown was still Chancellor in 2004-07 (and not PM as City Wire reports). Many of the films that investors dodged their taxes on were not "blockbusters" - in fact, I don't even think the films needed to be filmed to qualify for the tax dodge. For some reason the film schemes enabled the "investor" to save/avoid/evade (take your pick) more tax than they had paid into the scheme. This scheme wasn't like the tax saving that exists when someone pays into their pension.

For the record, I also said "no" to setting up "employee benefit trust" schemes that avoided/evaded tax. I think "employee benefit trusts" were involved in Glasgow Rangers going into admin/bankruptcy when HMRC contested these rules. And, I've said "no" to the "non-repayable loan" schemes that some have used to dodge tax obligations.

I'm all for writing good tax law. I'm all for "full and accurate" disclosure of the intentions, and follow-up reporting of the achievement of these intentions, when Chancellors "write" tax laws. If this was the case there would be a lot better understanding of what is taxable income and what is not taxable income - and a lot fewer opportunities for problems such as the "tax saving film schemes" to arise. I don't blame the footballers, it's to be expected that they will employ financial advisors/accountants/lawyers to assist with all the money they earn.

And, if we had better tax laws and clarity about when tax is payable and when it's not payable we might avoid some of the politics that makes a mess of many "fancy" tax proposals.

Paul Waine · Post by **Paul Waine** » Mon Jun 05, 2017 4:24 pm

Imploding Turtle wrote:So how about we get rid of tax avoidance schemes altogether?

Of are you only interested in criticising them when people whose political views you dislike use them?

Hi IT, I'm sure your skills at searching this board can find some of my posts making this exact point.

And, I will, and have, criticised Gordon Brown and George Osborne on many occasions for their bad/dishonest/mistaken tax laws.

And, in the current period, I have also criticised Jeremy Corbyn/John McDonnell for their tax plans - and Theresa May for making a mess of her attempt to tackle social care funding.

Top Claret · Post by **Top Claret** » Mon Jun 05, 2017 4:24 pm

It is common knowledge that socialist are the biggest capitalists.
In the main socialist are all for themselves and are a bunch of money grabbing, Jealous ba--tards, who would sell their granny to make a few bob

Down_Rover · Post by **Down_Rover** » Mon Jun 05, 2017 4:30 pm

Well I was offered one of these 'film schemes, back in 2004. I took advice from a friend who was a high level tax adviser.

He told me it was legal but that if something is too good to be true it probably is. He also said that the government were quite capable of passing retrospective legislation to make them illegal. Anyone who took advice in those days would have been warned about the likelihood of a change in the rules.

I did not invest for two reasons. Firstly I was concerned the rules could be changed, and secondly, and most importantly I thought such schemes were immoral. I had earned the money (much more in those days than I do now) and I thought I should pay the tax. Tax is not a cost of living, it is a contribution to everyone's welfare. If everyone avoided their tax then there would be no schools, no NHS, no army, no police .... and the list goes on

I don't vote Labour by the way

TVC15 · Post by **TVC15** » Mon Jun 05, 2017 4:47 pm

Top Claret wrote:It is common knowledge that socialist are the biggest capitalists.
In the main socialist are all for themselves and are a bunch of money grabbing, Jealous ba--tards, who would sell their granny to make a few bob

mmmm ?....think i`ll leave it at that !

Hi Rowls

I was not saying that paying tax is about altruism - I was suggesting that the people who were in this scheme were fully aware that they were not doing this for altruistic reasons to help the film industry....and that if you believe that suggestion then it naturally follows that they knew what they were doing was probably a "bit smelly" !

You asked what I would do...well I would smell a rat immediately. The scheme is similar to the old "invest in wine" tax avoidance scheme and others. If there are supposed benefits from a scheme which you know are not aligned to the original purpose of the scheme then my principle is that "if it looks too good to be true it usually is".

As I said this could be very easily fixed by the tax authorities agreeing any "non-standard" tax arrangements at the outset. I agree that rewriting the tax laws in our country would be a nightmare but I do not think coming up with a list of non-standard tax arrangements and some governance around this would be.

Putting the boot on the other foot and giving these greedy people (!!) a tiny benefit of the doubt they may think that they did everything correctly (or the accountants did) so why should they have to pay back tax retrospectively ?

But this comes back to grey areas and interpretation so if you walk that fine line and end up falling foul years later when somebody decides to rule on this in a different way to a previous regime its tough ti-tties and you will get zero sympathy from me or most of the general public as you don`t need to walk that tightrope when your pockets are already laden down with bags of cash...!!

aggi · Post by **aggi** » Mon Jun 05, 2017 4:52 pm

One thing to bear in mind, without such financing schemes we wouldn't have had cinematic masterpieces such as Dead Man Running, starring 50 Cent and Danny Dyer (Exec producers Ashley Cole and Rio Ferdinand). https://www.youtube.com/watch?v=QwQMs7D4WoU" onclick="window.open(this.href);return false; It scored a solid 10% on Rotten Tomatoes

nil_desperandum · Post by **nil_desperandum** » Mon Jun 05, 2017 5:03 pm

Rowls wrote:
They wanted to encourage blockbuster movies and Hollywood to be produced in the UK. To an extent they have achieved that (many productions take place here) but the way it was drawn up was evidently flawed hence this farce going on years after the legislation.

Whilst it is annoying that many of the celebs who are caught in this trap have preached tax "holiness" to us mere plebs only to have been caught trying to minimize their own payments I do feel a tad sorry for them.

What would you do if your financial adviser told you that the Chancellor (Gordon Brown) had opened up a new scheme whereby if you invested in the entertainment industry you would have to pay less tax and it was all perfectly legal (as they believed it to be)?

Whilst there are a variety of views on tax "avoidance", I think this post just about sums up this particular scheme perfectly.
The government decided to stimulate the British Film industry by offering tax incentives to those who invested money in them. (Nothing wrong with encouraging people to invest in the Arts in my opinion, but that's an entirely different debate).
People were therefore encouraged to invest in this scheme. It was and is perfectly legal. The problem is that despite it being a govt. initiative, it was challenged as a scheme by the tax office. (Now I'm not exactly sure how that works, but basically it appears that the courts have agreed with the tax authorities).
As I see it anyone of us could have put money into this in good faith, and then discovered a decade later that it's not "tax allowable".
It's most likely of course that many of these celebs were not being altruistic when they invested in the Film Industry, and did indeed see it as a good way to get some tax relief, but I'm not convinced that anyone should be morally indignant about them signing up for a scheme that was promoted by the government.

1968claret · Post by **1968claret** » Mon Jun 05, 2017 5:18 pm

DSR has it more or less right.
As stated, evasion is where there is a clear attempt to not pay tax by either hiding income (cash jobs, off record sales or inflated expenses)
Where I would elaborate further on DSRs note is the difference between avoidance or legal interpretation. Much of what he describes falls into the latter. This is where the finer points of the tax laws are challenged.
Tax Avoidance is very similar but tends to be more where business processes, structures or accounting is artificially manipulated to take advantage of these legal loopholes. There are a number of advisers and individuals who make a living out of dreaming up and actively marketing these avoidance schemes. It is these aggressive schemes that are being challenged by HMRC as well as the day to day arguments and challenges around tax law.
I do have some sympathy with those caught up in the film schemes though. It is possible that they did not realise what they were getting involved in

Acting Claret · Post by **Acting Claret** » Mon Jun 05, 2017 5:29 pm

Then there's the Maxine Peake type who pay their earnings into a company and take dividends instead of paying the appropriate rate of tax, all perfectly legal.
Not great morally though when you spout out about companies not paying more corporation tax.

aggi · Post by **aggi** » Mon Jun 05, 2017 5:41 pm

Acting Claret wrote:Then there's the Maxine Peake type who pay their earnings into a company and take dividends instead of paying the appropriate rate of tax, all perfectly legal.
Not great morally though when you spout out about companies not paying more corporation tax.

That does remind me of one of Guido Fawke's most desperate headlines https://order-order.com/2017/05/16/labo ... ccountant/" onclick="window.open(this.href);return false; She really should have used one of those accountants who declare on their website "We don't know how tax works", there are loads of those around.

Mondsley · Post by **Mondsley** » Mon Jun 05, 2017 5:46 pm

Having worked in HMRC for many years (now retired) I have read this with interest. I think the best definition I have seen for the difference between tax avoidance and evasion was given by Dennis Healey who described it as "the width of a prison wall".

TVC15 · Post by **TVC15** » Mon Jun 05, 2017 5:53 pm

Acting Claret wrote:Then there's the Maxine Peake type who pay their earnings into a company and take dividends instead of paying the appropriate rate of tax, all perfectly legal.
Not great morally though when you spout out about companies not paying more corporation tax.

Most actors and broadcasters set themselves up as limited companies.

They can only take £2k as a tax free dividend from next year. They do pay less tax than an "employee" or sole trader because corporation tax is lower than income tax. So increasing corporation tax will help increase revenue from the many people who do this (contractors, consultants etc)

Not sure I get the point here - if Maxine Peake is spouting about companies not paying more corporation tax then I guess this relates to the more complex tax avoidance schemes that the bigger companies get up to or registering your company in a lower tax regime country etc.

Taking a £2k dividend and paying yourself a salary to use up your personal allowance is hardly the stuff of Amazon and Google !

Caballo · Post by **Caballo** » Mon Jun 05, 2017 6:20 pm

TVC15 wrote:
Taking a £2k dividend and paying yourself a salary to use up your personal allowance is hardly the stuff of Amazon and Google !

It's exactly the same!

There's one pot, if you avoid putting in to it, deceitfully take from it or spend from it recklessly then you're all the same in my book!

TVC15 · Post by **TVC15** » Mon Jun 05, 2017 6:33 pm

Caballo wrote:It's exactly the same!

There's one pot, if you avoid putting in to it, deceitfully take from it or spend from it recklessly then you're all the same in my book!

Its not exactly the same at all - if you are self employed you can set yourself up as a limited company and have been able to for many years. A big proportion of the population do it and there`s all kinds of other reasons for setting yourself up in this way.

The issue is that corporation tax has been reduced and means that the limited companies with one director / employee (i.e. themselves) receive benefits which were probably intended for companies who employ staff - and encourage them to employ more staff.

All that said, I would not be adverse to the rules being changed on limited companies who only employ one person. The government were kind of recognising this by introduction of IR35 but its looking like the only people who will lose out here are contractors / consultants who have contracts with the public sector who will have to pay their tax as employee income tax rather than limited company corp tax.

And there lies one of the issues - tax laws far too complex and too many vulture accountancy / legal firms waiting to find a loophole. Might be easier to just go back to bartering and groats !

bfcjg · Post by **bfcjg** » Mon Jun 05, 2017 8:30 pm

People in glass houses.
http://www.independent.co.uk/news/peopl ... 25747.html" onclick="window.open(this.href);return false;

Imploding Turtle · Post by **Imploding Turtle** » Mon Jun 05, 2017 8:38 pm

bfcjg wrote:People in glass houses.
http://www.independent.co.uk/news/peopl ... 25747.html" onclick="window.open(this.href);return false;

I hate hypocrites just as much as i hate terrorists.

possible hyperbole, but i really despise them

barba · Post by **barba** » Mon Jun 05, 2017 9:42 pm

The difficulty in closing these loopholes is that they take advantage of genuine tax planning.

Take Jimmy Carr who used director loans to circumvent paying 'appropriate' tax and film partnerships who effectively use losses in one partnerships to offset income from other sources.

I had the opportunity to 'sell' film partnerships and other supposed esoteric investments a decade or so and chose not to.

The basis that you invest £100k, borrow £900k and then claim 40% tax relief on it all was as absurd as it was deliberate.

keith1879 · Post by **keith1879** » Mon Jun 05, 2017 9:55 pm

Imploding Turtle wrote:So how about we get rid of tax avoidance schemes altogether?

Of are you only interested in criticising them when people whose political views you dislike use them?

By simplifying the tax system. Get rid of National Insurance and have a single tax on income that is more progressive than the current rate - and is roughly equivalent to corporation tax. But of course that would prevent chancellors from shouting I HAVE REDUCED INCOME TAX (and adding sotto voce ....and increased national insurance).

Imploding Turtle · Post by **Imploding Turtle** » Mon Jun 05, 2017 10:09 pm

keith1879 wrote:By simplifying the tax system. Get rid of National Insurance and have a single tax on income that is more progressive than the current rate - and is roughly equivalent to corporation tax. But of course that would prevent chancellors from shouting I HAVE REDUCED INCOME TAX (and adding sotto voce ....and increased national insurance).

I'm with you on a more progressive income tax but not at Corporation tax levels. I actually think we should have a progressive corporation tax than we do right now. LVT as a replacement for council tax would be another great move forward and VAT should come back down at some point. Or at least allow people who are on benefits to claim some of it back each year in the same way that the self-employed can. Even if it's only 10-15% of total VAT paid, it would really help the poorest. VAT is such a horrible tax since it impacts you more the poorer you are. There's got to be something better available than that.

Rowls · Post by **Rowls** » Tue Jun 06, 2017 1:00 am

nil_desperandum wrote:The problem is that despite it being a govt. initiative, it was challenged as a scheme by the tax office. (Now I'm not exactly sure how that works, but basically it appears that the courts have agreed with the tax authorities).

It's the law of unintended consequences. The government intend the tax break to work for existing behaviours but people alter their behaviour to take advantage of the tax break.

Here's a basic rundown of how I *believe* this scheme worked on a very basic level:

If you made a film which made a massive loss you could right off that loss against your tax bill.

Celebrities and other millionaires were encouraged to invest in an investment fund for the film industry. The fund would invest in films likely to make a big profit and films that were "likely" to make a big loss.

The films that made a profit made a profit, the films that made a loss had at least a large proportion of that loss written off from the tax that would have been payable on the profit from the successful film.

The government intent was to encourage film-makers to come here and take a bit of a gamble because losses would not be quite so damaging if they could be off-set by a big profit.

Here's what actually happened - we've had a thriving "student" film industry whereby chancers, wannabes, students and even proper scammers have been going round asking for funding for films which nobody in their right minds believes has a cat's chance in hell of making a single penny. These films (some with genuine artistic merit or intent, some just crap deliberately produced to help the tax avoidance scheme) are funded to the max by the investment fund run for the tax avoiders (ie. rich people and celebrities) so that they can "bank" a big loss in order to right off a shed load of tax somewhere else.

It's very similar to the plot to 'The Producers' except with tax instead of insurance.

The legal rulings against the funds are -to my knowledge- based upon whether the "investments" in shoddy films had any realistic chance of making a proper return. Ie. Were they done for the merit of the film or simply to avoid tax.

I've only heard this on the grapevine and I'm not sure if I've entirely grasped how this works or whether it's worthwhile so if I'm a million miles wide of the mark then anybody feel free to correct me.

The real lesson here is that you cannot avoid the law of unintended consequences and that people always alter their behaviour to avoid paying tax if they can do so legally.

nil_desperandum · Post by **nil_desperandum** » Tue Jun 06, 2017 1:16 am

Rowls wrote:
The real lesson here is that you cannot avoid the law of unintended consequences and that people always alter their behaviour to avoid paying tax if they can do so legally.

Spot on, and with that I'm off to bed!
Why are you still posting?. It's 2.15 a.m. in the South of France for goodness sake!

Rowls · Post by **Rowls** » Tue Jun 06, 2017 1:37 am

I just finished my shift. It takes a while to settle down. Goodnight!

edit - it's also 25 degrees celsius and living in Montpellier centre I can hear two separate parties going on...

HunterST_BFC · Post by **HunterST_BFC** » Tue Jun 06, 2017 2:09 am

It's wrong.
WRONG!

but this will still go on and on as it always has done for decades.
People with money will pay people to keep more of their money and use whatever dubious method (with the service vendor scalping a hefty share).

A Lab Vote is worth it - ..... This Avoidance will happen less.

Corby is the only Vote to "maybe" sort these things out.

I fear some career politicians of all colours will make it hard for him whatever his intent.

Rowls · Post by **Rowls** » Tue Jun 06, 2017 3:18 am

HunterST_BFC wrote:I fear some career politicians of all colours will make it hard for him whatever his intent.

I'd wager it will be the electorate who have the bigger say about career politician Jeremy Corbyn.

nil_desperandum · Post by **nil_desperandum** » Tue Jun 06, 2017 8:34 am

HunterST_BFC wrote:It's wrong.
WRONG!
.

Well maybe it is, but you have to accept that this was a scheme announced and promoted by a Labour Govt. - probably one that you and I supported at the time.
As Rowls summed it up, (and I don't think there was any party bias in his account), it was the politics of "unintended consequences".
I'm personally very much in favour of supporting the Arts and charities via tax concessions, but the problem is: how do you do this without accountants etc. exploiting loopholes to set up tax "avoidance" / "evasion" schemes.
This was not legally "evasion". No one is being prosecuted, but people did "play the system".

dsr · Post by **dsr** » Tue Jun 06, 2017 9:05 am

Rowls wrote:It's the law of unintended consequences. The government intend the tax break to work for existing behaviours but people alter their behaviour to take advantage of the tax break.

Here's a basic rundown of how I *believe* this scheme worked on a very basic level:

If you made a film which made a massive loss you could right off that loss against your tax bill.

Celebrities and other millionaires were encouraged to invest in an investment fund for the film industry. The fund would invest in films likely to make a big profit and films that were "likely" to make a big loss.

The films that made a profit made a profit, the films that made a loss had at least a large proportion of that loss written off from the tax that would have been payable on the profit from the successful film.

The government intent was to encourage film-makers to come here and take a bit of a gamble because losses would not be quite so damaging if they could be off-set by a big profit.

Here's what actually happened - we've had a thriving "student" film industry whereby chancers, wannabes, students and even proper scammers have been going round asking for funding for films which nobody in their right minds believes has a cat's chance in hell of making a single penny. These films (some with genuine artistic merit or intent, some just crap deliberately produced to help the tax avoidance scheme) are funded to the max by the investment fund run for the tax avoiders (ie. rich people and celebrities) so that they can "bank" a big loss in order to right off a shed load of tax somewhere else.

It's very similar to the plot to 'The Producers' except with tax instead of insurance.

The legal rulings against the funds are -to my knowledge- based upon whether the "investments" in shoddy films had any realistic chance of making a proper return. Ie. Were they done for the merit of the film or simply to avoid tax.

I've only heard this on the grapevine and I'm not sure if I've entirely grasped how this works or whether it's worthwhile so if I'm a million miles wide of the mark then anybody feel free to correct me.

The real lesson here is that you cannot avoid the law of unintended consequences and that people always alter their behaviour to avoid paying tax if they can do so legally.

There must have been more to it that that. Your version has people deliberately losing money. There's no benefit in deliberately putting £100k into a loss making film to save £50k tax, and under existing law you can offset losses against profits of the same trade anyway.

Burnley Ace · Post by **Burnley Ace** » Tue Jun 06, 2017 9:30 am

The "treasure hunting" scheme seemed to be the most ridiculous! Perhaps more importantly to many on here, what will Labour do to those investors using ISAs to avoid tax?