Quote:
Originally Posted by danielf
If they don't like it then put a stop to it. Why this half-arsed approach where something is perfectly legal, and then appeal to people's moral judgement to not take advantage of it? Legislate against it and stop moaning ffs.
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It's legal. However it's not an intention of the tax system and is an error that occurs because of an unforeseen circumstance. I think the tax system must be so complicated now that these problems occur.
From
HMRC (opens as PDF):
Quote:
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Tax avoidance represents a significant part of the UK tax gap. Unlike evasion, it is not in itself illegal, but it involves using the tax law to get a tax advantage that Parliament never intended. It frequently involves contrived, artificial transactions that serve little or no purpose other than to reduce tax liability.
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and, from
ITV, what Jimmy Carr was doing:
Quote:
- UK earners 'quit' their job
- They then sign new employment contracts with offshore shell companies
- The offshore companies 'rehire' their new employee to the UK but take their earnings
- The offshore company pays the employee a much lower salary each month, but 'loans' them several thousand pounds
- These loans can be written down as tax liabilities, thus substantially reducing tax payable to the Government
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This is clearly exploiting the tax system to pay as little tax as possible without going to jail.