Thursday 25 October 2012

Tax

I get confused by tax fairly regularly. Head in the sand approach I think. Anyway, we have heard a lot recently about the tax big companies don't pay in the UK, which seemed to rise during the Blair years. One of the things we keep hearing (apart from the head of HMRC going out of his way to help Vodafone pay a fraction of their tax bill), is that tax avoidance is OK but tax evasion isn't.

The problem is that it seems this is actually a clever way of manipulating words (beloved of the Left) to make us believe one of these is something it isn't. See, to the ordinary Joe Public tax avoidance is when you use allowances that are within the rules to reduce your tax bill, but to those who have really large amount of cash it means so much more. Companies and people like Jimmy Carr use 'vehicles' and overseas companies to hide from their UK tax liabilities.

I gather Starbucks buy from other Starbucks entities to move cash around to tax friendly countries and avoid tax on healthy UK trading. Clearly this is not avoidance, it is evasion. You have created a route to hide your earnings, which whilst within 'the rules' is obviously only designed to evade taxation.

Now taxation in the UK may well be too high (in the same way that the Sun may come up tomorrow), but if you want to be here you pay your way and agitate to get the burden reduced. Remember, we do have a lot of hare-brained schemes, waste and expenses to pay for before you include the politicians club, the EU. Hence the tax.

So let us be clear here. It seems HMRC are deliberately not going after the big companies and celebrities leaving a very large tab for the rest of us to pick up, by the misuse of language. It's time for them to stop their evasions and address the issue of evasion rather than avoidance; they can't avoid evasion any more.

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