http://www.bbc.co.uk/news/business-30327717



What an absolute load of bollocks. He's justifying the further persecution of the poorest in society with a made-up threat! The economy isn't gonna go into crisis - it's in crisis and truthfully has been for at least a decade! The 'savings' numbers bandied about are absolute chicken feed (and laughably trumped up at that) compared to the overall deficit. The suggestion that they are in any way a tipping point when we owe tens of billions a year and the previous cuts made next next to no difference to that? Makes my blood boil.

But hey, the two Eds will save us. You know, the two Labour berks who look like the worst examples of debating society members?

The question is how do we fund things if we don't cut them? Even after all these unpopular cuts, we're still spending much more that we're getting in tax.
Some say we should borrow more to stimulate growth, but the economy is growing already. We've not had the lack of growth that Labour said we would.
The national dept has shot up in the last eight years. We can't let it keep going up and up and up. At some point there's going to have to be a balance between what we want and what we can afford.
I've no idea exactly where that ballance lies.

I'd lean towards getting companies to pay what they owe and shutting down every available tax loophole. But that'll never happen, much easier to cause untold UK-wide misery than to upset friends and potential friends. And anyway, it's quite clear this is a barely disguised political agenda over what's actually right or wrong, whether financial or moral.

Agreed. If you tax individuals too much, it means they have much less disposable income, which in turn causes economic issues.

Sad thing is, we've got very many more smart tax accountants than smart tax collectors. That's why the UK now has the most complicated tax regime in the world. Every time you close a loophole you make the system that bit more complicated which means there are suddenly new loopholes to be found. You can keep on playing whack-a-mole forever.

What our tax system needs is massively simplifying, the simpler the system is the harder it is to dodge it. However given there's an entire lucrative industry built around exploiting the complexity of our tax law and quite a lot of the bigger players in that industry donate to our major political parties, don't hold your breath for that to ever happen.

My dad spent pretty much his entire career chasing tax avoiders. I have heard more than a little about it all. It makes Kafka's 'The Trial' sound like a Noddy book.

So why can't we do what software companies did with hackers? Hire them, they get a cut of any tax collected, loops get closed. Tax avoidance schemes get shut. I'd start with companies first and then go for individuals after.

That's been tried. The likes of KPMG have been seconding staff to the government for years. Then they take what they learn in government back to their original employers and come with even more fiendish tac plans than they had before.

People tend to wildly oversimplify this sort of thing. Most of the loopholes exist for one of three reasons.
First, they are intended to do some sort of good, like promoting investments by allowing the offsetting of initial losses against future taxes on profits.
The second is to do with arbitrage, where two different countries tax something differently (and those countries compete against each other rather fiercely). Many of the first type can't easily be closed without negative consequences that outweigh the benefits; many of the second can't be closed at all without violating treaties.

The other one is exploitation of ambiguity. Banks for instance replaced expensive deposits with virtually free credit to fund their lending - the credit came at low cost because of the whole too-big-to-fail subsidy; and what little it did cost them was offset by all the taxes they didn't have to pay because you don't pay taxes on debts. The "carried interest" that private equity funds use to pay themselves is another notorious example of financial semantics.

That third lot are where all the real theft happens, but efforts to prevent it by writing tighter legislation never really work. Hiring expert thieves to write their own loopholes out of existence will just open doors for the next set of dodgy little scrotes. Some things that would help are getting all the different countries to tax the same stuff in the same way, even if it is at different levels. That is the current plan, it will take ages to sort out though.

Unfortunately, the absolute best thing would be to end secrecy, so that the beneficial owner of every asset is knowable (to somebody other than the NSA I suppose). A lot of the loopholes would be easy to challenge under existing law if a subpoena could be issued in the correct jurisdiction for the right financial record. Not telling the tax man where to look is the key to not paying him. Efforts in that sphere have really not been impressive. A couple of treaties for sharing tax records between larger countries have been kicked around, but you can still start a completely secret shell company in Delaware or Miami, let alone all the tinpot little tax havens that the UK kind of controls.

Unless the incentives were utterly ludicrous (which itself would be a stick some newspaper somewhere would beat the government with) there's simply no way they could earn as much as a gameskeeper as they do as a poacher. It's like the FCA; there's simply no way the government can pay people as much as they can earn as bankers to get them to police bankers instead. As as result the smartest people work for the banks, not the FCA.

Jon

who ever gets in to power at the next election will have to cut public spending
sadly the public sector are going to get a real pounding especially public sector pensions

as of tax
this is why i have been a great believer in a flat rate tax system based on the same rate as vat
its so simply and very hard to avoid ...