Another Tax Avoidance scam uncovered

http://www.thetimes.co.uk/tto/money/...cle3673519.ece (paywall)

One of Britain’s biggest charities is a front for tax avoidance, The Times can reveal.

Wealthy donors used the Cup Trust to avoid £46 million in tax in an extensive abuse of Gift Aid incentives designed to encourage charitable donations.
The registered charity raised £176 million between 2010 and 2011. In 2010 it attracted more donations than the Royal Society for the Protection of Birds, the British Heart Foundation or the Salvation Army.

But instead of using the money for its stated objective, to “improve the lives of young children and adults�, it carried out trades that artificially generated Gift Aid for donors to reduce their tax bills. Investors who “donated� £1 million to the Cup Trust, for example, would receive most of their money back — but still be entitled to claim Gift Aid worth between £250,000 and £375,000.

Unbelievable. The people who took advantage of this scam should be prosecuted.

[Derek]

Not surprising. A whole host of charities are nothing more than a scam of one form or another.

[Gary L]

It's a pity their website wasn't so bland. it just looks like a cover.

http://thecuptrust.com/

But yeh. prosecute them all.
I don't care even if Cameron was one of them. prosecute him too.
cheating **** they all are.

[thenry]

charity scam?! ****!

[Gary L]

I reckon there's going to be one big massive scandal to hit the headlines soon. it just needs one squealer and the baccy man gets shut down.

just needs one toff to upset another toff. and the way people are with money just lately. I can say we won't have a long wait.

[TheDaddy]

What do we expect when one of the heads of revenue is a tax.dodger with multiple current conflicts of interest, it's a miracle anyone other than the little people pay anything at all.

The other thing I don't understand is the term 'avoidance' and that the people taking advantage aren't breaking the law. Surely using giftaid to reduce your tax bill whilst getting the money back is simply fraud.

[Itshim]

Originally Posted by Damien

The other thing I don't understand is the term 'avoidance' and that the people taking advantage aren't breaking the law. Surely using giftaid to reduce your tax bill whilst getting the money back is simply fraud.

See no argument with your point, it sure looks like fraud to me. Interesting to see how it pans out

[Osem]

I think we need a much simpler, clearer tax system. It seems to me that it's the complexity of the system which creates the opportunity for so many scams etc.

[chris9991]

Avoidance would be where you do something to avoid something else. Hence tax avoidance is where you arrange your finances so that the tax you pay is less but it is still within the rules. Tax evasion is where you don't pay tax that the rules say you are to pay.

If the Government want to reduce tax avoidance I think the best way would be to simplify the process, rather than closing loopholes in a piecemeal fashion.

I am a great advocate of a single tax rate for everyone .Once a preset limit is reached everyone pays the same tax ,no obscure allowances no nothing just the same tax rate as everyone else

Originally Posted by martyh

I am a great advocate of a single tax rate for everyone .Once a preset limit is reached everyone pays the same tax ,no obscure allowances no nothing just the same tax rate as everyone else

I don't see how that would raise enough money without massively hitting the less wealth off.

[Gary L]

Originally Posted by martyh

I am a great advocate of a single tax rate for everyone .Once a preset limit is reached everyone pays the same tax ,no obscure allowances no nothing just the same tax rate as everyone else

Needs a rethink.

[Osem]

Originally Posted by Damien

I don't see how that would raise enough money without massively hitting the less wealth off.

I think the argument goes that taxes on the rich minority, popular though they are with everyone else, don't actually raise that much and can be avoided in all manner of ways - legal and not so legal. Administering all this and trying to crack down on avoidance, evasion etc. costs a whole lot of time and money. I suppose it's similar to the argument which was always used for universal benefit like child benefit - even though some money goes to people who don't need it, a great deal more is saved because administering it is so much simpler.

Originally Posted by Osem

I think the argument goes that taxes on the rich minority, popular though they are with everyone else, don't actually raise that much and can be avoided in all manner of ways - legal and not so legal. Administering all this and trying to crack down on avoidance, evasion etc. costs a whole lot of time and money. I suppose it's similar to the argument which was always used for universal benefit like child benefit - even though some money goes to people who don't need it, a great deal more is saved because administering it is so much simpler.

The rich could still avoid the tax though. Presumably it would have to be an income tax and thus the rich will use similar loop holes.