- Sun Nov 18, 2012 1:52 pm
#486062
Hmmm, not sure I understand what DimTim trying to say.
The basics are simple enough, there are many ways in which you can AVOID tax, which are fine and legal, what is not ok is EVASION of tax.
EVASION of tax uses loop holes, and this scheme is definitely one of those schemes. The whole substance of the scheme involves lending money and borrowing it back from some offshore trust, which as Chris points out is a loophole and wrong.
Putting your Savings in ISA's, contributing to a Pension, paying your stay at home wife half your salary, forming a company and paying yourself dividends instead of PAYE, all good.
They don't seem to mention the other end where layabouts are now claiming to be "self representing artists" so they can get the full whack of "working tax credit" as well as Child Tax credit, which includes free prescriptions/free school meals etc etc as additional benefits for "fiddling"
It's just as bad.
Having said all that I firmly believe that the problem is the Taxation System in general, too many times exceptions are made to the rules, which is what creates these little back doors tax accountants can use, if there was a much more simple system where all gains were treated equally at the time of receipt, tax rates were set on all income, and included the equivalent of National Insurance, and ALL benefits were assessed subject to status (say like council tax benefit) then we would have a much fairer system, a much simpler system, and a system which didn't pay millionaires Child Benefit and Winter Fuel Allowance.