[Moosey]

Originally Posted by Jeffrey Shaw

Res ipsa loquitur, as we say in the biz. The thing speaks for itself!

Res ipsa only applies if there is no other explanation though. There is here.

Res ipsa cases are cases such as a guy walking along a walkway in a factory when the crane overhead releases its load onto his head. There's no other explanation other than someone was negligent, be it they'd failed to inspect, maintain, or were vicariously liable for the crane driver.

Here, there's an alternative. The tradesman could have said "I accept cash, cheque or BACS", and the householder, having £50 in the house says "I'll give you £50 for cash?". Proving intent there beyond reasonable doubt will be impossible, unless you try to make this a strict liability offence.

This is too serious an offence, with too much stigma, for it to be strict liability.

[Cyclone]

It makes no sense at all for it be any kind of offence.

Payment is required, cash in it's various forms is the legal tender of this country. To make it illegal to pay for goods or services with cash would be ludicrous.

[iansheff]

Thats rich ministers talking about morals when only the other day I read about the speaker of the house having a £1300+ shower screen, council tax and tv licence paid for by the taxpayer.

[Ousetunes]

If the government managed to close every tax loop-hole, evasion and avoidance method/scheme two things would happen over night:

1 - every accountant in the land would cease trading (taking businesses with him or at least putting enormous strain on their already suffering cash-flows and current state);

2 - every politician would quit as they are reduced to paying the proper rate of tax and being forced to live in one place and travel like the rest of us.

[Cyclone]

Originally Posted by Ousetunes

If the government managed to close every tax loop-hole, evasion and avoidance method/scheme two things would happen over night:

1 - every accountant in the land would cease trading (taking businesses with him or at least putting enormous strain on their already suffering cash-flows and current state);

2 - every politician would quit as they are reduced to paying the proper rate of tax and being forced to live in one place and travel like the rest of us.

Most accountants have nothing to do with any tax evasion, and do much more mundane things like keeping the books and filling in the myriad forms that the government requires (and indeed working out how much a business owes to HMRC for the various things).

[WeX]

who cares? do people really think our MP's are bastions of purity and follow every rule to the letter?

So what if these people are given cash. Its a win/win for everyone. You get a service at a cheaper rate, the tradesman gets a little more money which he/she can spend on goods, keeping more people in jobs.

The money is eventually hoovered up by the government anyways in the form of VAT.

[Cyclone]

Tax avoidance is a way of reducing your tax bill legally. If you put money in a regular savings account then tax is due on the interest. Using an ISA avoids that tax.
In just the same way that paying into a pension avoids paying (income) tax on that portion of your income.

Gauke saying otherwise doesn't change it.
Maybe he personally is confused about what avoidance and what evasion are, as he seems to be suggesting that avoidance is a bad thing, when clearly it is just good tax planning (which he does mention).

[mossdog]

Originally Posted by MrSmith

Just heard him on TV and he is saying, its morally wrong to accept a discount for cash, or offering cash for a discount, because both these imply there is an intent to avoid paying tax, he’s probably got a point. But then I can still understand why someone would want to avoid giving their money to a government that acts immorally most of the time, and will only waste the money anyway.

Presume you mean a Labour government!

[HeadingNorth]

Originally Posted by Cyclone

You might say that, but I doubt that it somehow achieves the standard of "beyond reasonable doubt".

Don't Customs and Excise operate the other way around, though? If they think you've avoided VAT, they take it off you, whether they have proof or not.

Or has that changed...

[chem1st]

Originally Posted by Cyclone

The government needs that money in order to spend it. Otherwise you could argue for zero taxation and we'd all have to do without roads, schools, the NHS, etc...

Taxing income derived from work isn't a bright idea. Especially small incomes.

It would make more sense to tax Land values, consumption, income from rent seeking behaviour. We already have effective marginal taxes that exceed 100% making work an irrational financial behaviour for the little guy.

That is quite frankly morally repugnant. The state sets minimum income (and thus minimum prices of common goods, in particular housing), stops work from paying and forces people to work in a manner akin to corvee.

Consider the tax on a packet of fags. Many people on small incomes already spend the majority of their income on tax due to highly regressive taxes on consumer goods.

[HeadingNorth]

Originally Posted by Cyclone

Tax avoidance is a way of reducing your tax bill legally.

It always was so; but of late, people have been using the term "tax avoidance" specifically to mean the finding of loopholes which are not intended to be legal.

That would be better referred to as "aggressive tax avoidance," a phrase I've heard recently. Avoiding tax that you are not supposed to be paying is a no-brainer act.

[Jeffrey Shaw]

Other than the 'reduced price if cash' argument, the focus is on artificial transactions which abuse tax relief so as to hide taxable income. If the transaction has no other object, it should be deemed evasion: hence the GAAR proposal (General Anti Abuse Rule).

See http://www.hm-treasury.gov.uk/tax_avoidance_gaar.htm

[green]

Guido is exposed Gauke as a fraud today... http://order-order.com/2012/07/

Exchequer Secretary David Gauke has some nerve doing the rounds on tax morality this week. Yesterday Guido brought you news of Gauke’s past avoidance of stamp duty and his wife’s job at a firm advising tax lawyers, while today the Telegraph and Mail both splash on his claim that paying tradesmen cash in hand is “morally wrong“:

“Getting a discount with your plumber by paying cash in hand is something that is a big cost to the Revenue and means others have to pay more in tax. I think it is morally wrong.”

Guido can now reveal that Gauke himself worked for a company that specialises in helping the wealthy avoid tax. According to Debretts between 1999 and 2005 – when he became an MP – Gauke was a solicitor at Macfarlanes, a top city law firm with expertise on tax efficiency. They boast on their website:

“The tax efficient structuring of employee incentive arrangements is often a key requirement for our clients to achieve their commercial objectives. We have particular expertise in the structuring of tax efficient equity based incentive plans. We are able to develop innovative solutions to the most complex tax issues when necessary.”

Tax efficient equity-based plans, eh? Like those used by investment bankers perchance? Gauke must have made a success of finding “innovative solutions” to reducing his clients’ tax bills as he appears to be held in high regard by his former colleagues:

Gauke has more neck than a friggin giraffe.

[Cyclone]

Originally Posted by chem1st

Taxing income derived from work isn't a bright idea. Especially small incomes.

It would make more sense to tax Land values, consumption, income from rent seeking behaviour. We already have effective marginal taxes that exceed 100% making work an irrational financial behaviour for the little guy.

That is quite frankly morally repugnant. The state sets minimum income (and thus minimum prices of common goods, in particular housing), stops work from paying and forces people to work in a manner akin to corvee.

Consider the tax on a packet of fags. Many people on small incomes already spend the majority of their income on tax due to highly regressive taxes on consumer goods.

We were talking about VAT, that's taxing spending not income.

Cigarettes are taxed due to public health policies, the idea being that the high price will reduce consumption.

[esme]

Mod Note

Posts attacking other users have been removed, along with any that quote deleted posts.

Keep it civil please.

[MrSmith]

Originally Posted by mossdog

Presume you mean a Labour government!

No I think most governments do a reasonable job of wasting money.

[fake]

Originally Posted by green

Guido is exposed Gauke as a fraud today... http://order-order.com/2012/07/

“Getting a discount with your plumber by paying cash in hand is something that is a big cost to the Revenue and means others have to pay more in tax. I think it is morally wrong.”

Why do others then have to pay more in tax? sorry I don't understand that bit.

[Cyclone]

Originally Posted by fake

Why do others then have to pay more in tax? sorry I don't understand that bit.

If you assume that the government needs a certain level of income, and you avoid paying some tax that is due, then tax must be raised elsewhere and everyone will have to contribute more to cover what you evaded.

[Maxster]

Originally Posted by taxman

As far as I'm concerned it is not the business of the person paying the money for the job to worry about how that payment is then recorded in the traders' records.

I agree; why should I be concerned about the financial affairs of a builder or cleaner, it is their responsibility.

[Jeffrey Shaw]

Originally Posted by Maxster

I agree; why should I be concerned about the financial affairs of a builder or cleaner, it is their responsibility.

True, UNLESS he/she offers a price reduction for cash (which might suggest tax evasion).