With all the talk about people and companies avoiding tax, how rich would I have to be to avoid paying tax?
How rich do I have to be to avoid tax
Started by
GodAtum
, Apr 14 2012 09:34 AM
22 replies to this topic
#2
Posted 14 April 2012 - 09:41 AM
You would have to be in the Tony Blair or David Cameron league of earners for starters!
#3
Posted 14 April 2012 - 11:08 AM
With all the talk about people and companies avoiding tax, how rich would I have to be to avoid paying tax?
You could avoid tax easily at any level of income...
#4
Posted 14 April 2012 - 11:12 AM
You would have to be in the Tony Blair or David Cameron league of earners for starters!
Don't think either of them even make that much in the grand scheme of things.
#5
Posted 14 April 2012 - 11:16 AM
In the grand scheme of things they are both multi-millionaires. Cameron was even before he became PM. Out of touch and untouchable the pair of them!Don't think either of them even make that much in the grand scheme of things.
#6
Posted 14 April 2012 - 12:06 PM
In the grand scheme of things they are both multi-millionaires. Cameron was even before he became PM. Out of touch and untouchable the pair of them!
There are plenty of people that earn more than the two of them though.
#7
Posted 14 April 2012 - 12:14 PM
There are plenty of people that earn more than the two of them though.
Certainly are...
Many just so happen to donate to the conservative party coffers aswell...
#8
Posted 14 April 2012 - 12:37 PM
Certainly are...
Many just so happen to donate to the conservative party coffers aswell...
It all makes sense now, tax the rich so the Conservatives get less donations! Nothing to do with the country, just a bit of jealousy eh?
#9
Posted 14 April 2012 - 12:55 PM
It all makes sense now, tax the rich so the Conservatives get less donations! Nothing to do with the country, just a bit of jealousy eh?
The rich pay relativley low levels of tax at the minute... Jealousy isnt part of it but it certainly isnt fair. Especially when they can avoid paying massive sums through charity donations ect.
But what do you consider rich? Households with an income of 45k+? Well thats me! Myself and my lady earn around that amount a year, we certainly arent rich but comfortable.
These people being the 'super rich' the type who donate masses to conservatice coffers.
Edited by Radman, 14 April 2012 - 01:01 PM.
#10
Posted 14 April 2012 - 12:59 PM
The rich pay relativley low levels of tax at the minute... Jealousy isnt part of it but it certainly isnt fair.
What is rich? Why isn't it fair? Why shouldn't people get to keep as much of the money they earned as possible (and that goes for everyone)?
#11
Posted 14 April 2012 - 01:11 PM
What is rich? Why isn't it fair? Why shouldn't people get to keep as much of the money they earned as possible (and that goes for everyone)?
"Because we're all in it together..." Arent we?
Why should the middle and working class get lumbered with paying the most tax?
Ah because the government knows we'll pay it and theres alot of us... Thats right.
#12
Posted 14 April 2012 - 01:20 PM
OP is this a serious question? There isn't some magic income figure beyond which people start avoiding tax.
#13
Posted 14 April 2012 - 01:21 PM
"Because we're all in it together..." Arent we?
Why should the middle and working class get lumbered with paying the most tax?
Ah because the government knows we'll pay it and theres alot of us... Thats right.
By what measure do the middle and working class pay the most tax? What is the cut off point for middle and working class? Again, what is rich? You are quick to offer soundbites but not answers to the questions asked of you. Have you considered a career in politics?
#14
Posted 14 April 2012 - 01:35 PM
Are those rhetorical questions? Surely you understand that people on lower tax rates pay a much larger proportion of their income in tax, which could definitely be described as "paying more", because that amount of money means more to them in terms of their standard of living.By what measure do the middle and working class pay the most tax? What is the cut off point for middle and working class? Again, what is rich? You are quick to offer soundbites but not answers to the questions asked of you. Have you considered a career in politics?
#15
Posted 14 April 2012 - 02:22 PM
Are those rhetorical questions? Surely you understand that people on lower tax rates pay a much larger proportion of their income in tax, which could definitely be described as "paying more", because that amount of money means more to them in terms of their standard of living.
No it isn't a rhetorical question, there are so many different ways of quantifying who pays the "most" tax. You could look at the amount pay, the proportion of income, the number of taxpayers in a certain band as a whole and so on. I was seeking clarification from Radman about what he meant by that because he failed to make clear which metric he was looking at.
#16
Posted 14 April 2012 - 02:25 PM
No it isn't a rhetorical question, there are so many different ways of quantifying who pays the "most" tax. You could look at the amount pay, the proportion of income, the number of taxpayers in a certain band as a whole and so on. I was seeking clarification from Radman about what he meant by that because he failed to make clear which metric he was looking at.
Well I think it's fairly obvious that he was refering to the proportion of income metric since that's the only one where lower rate taxpayers pay "more".
#17
KTC
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Posted 14 April 2012 - 02:27 PM
Depends on whether you're thinking of paying no tax at all or reduces the effective tax paid. If the latter, a classic approach a la Ken Livingstone and the head of the Student Loans Company is funnelling the income through a personal shell company and pays corporation tax and dividend tax instead of income tax via PAYE and NIC. This is especially effective if the earner has a partner who has no other income as the income from the one person can be spilt between the two for tax purpose.With all the talk about people and companies avoiding tax, how rich would I have to be to avoid paying tax?
The effective tax rate for higher rate tax payer through limited company dividend is ~25% compare to 32.5% income tax plus avoiding NIC. And that's before setting off expense such as if a full time house cleaner is employed via the shell company. Top rate tax player goes from 50% down to ~36% and the NIC avoidance.
All of that basically means maybe £50,000 annual before such a scheme would be effective. Of course, whoever pays you the income would have to agree to pay through such a shell company, and I think such a scheme would neede to be declared to HMRC. So erm, keep dreaming.
#18
Posted 14 April 2012 - 02:28 PM
Well I think it's fairly obvious that he was refering to the proportion of income metric since that's the only one where lower rate taxpayers pay "more".
As I said, I was seeking clarification so that we were both on the same page. PM me if you have an issue with that.
#19
Million
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Posted 14 April 2012 - 02:31 PM
Rich enough to pay a clever accountant who can take advantage of the system.
#20
Posted 17 April 2012 - 12:53 PM
I've been watching Rachel Khoo's Paris Kitchen and that got me thinking. The BBC pay her salary but does she pay income tax as she lives in france?
#21
Posted 17 April 2012 - 12:58 PM
The rich pay relativley low levels of tax at the minute... Jealousy isnt part of it but it certainly isnt fair. Especially when they can avoid paying massive sums through charity donations ect.
I really don't understand what people's problems are with the rich giving money to charity. Surely this is always a good thing to give away your money to a good cause?
#22
Posted 17 April 2012 - 01:23 PM
Depends on the charity - if you're funding a vanity wing of a portrait gallery (that is very snobby too) then why shouldn't the state collect its usual tax in order to fund things like the police first. Or at least if they do make all the Gift Aid go to the charity not be tax deductible for the bit over the 20% rate.
Then there are the tax charity abuse cases. Charities that make loans the business the donor owns. Charities that hold lavish "fund raising" parties that the donor and their guests go to. There are plenty of cases of dodgy abuse, especially as European law means we have to give Gift Aid rates to non-UK charities when foreign charity law is very different.
As for avoiding tax - if you have any long term savings you'll probably be avoiding tax. It's called an ISA. If you have a private pension you'll likely be avoiding tax, through tax relief, salary sacrifice etc.
The state gives tax breaks to incentivise good behaviour. Saving, planning for retirement and giving to charity are all useful things. But as always lots of lawyers and accountants earn lots to work out where the loopholes are, and then exploit them. Cancer Research UK should be allowed to take large donations from wealthy benefactors, but the case for the Sainsbury's getting to buy a vanity project and plaster their name across it stretches the boundary somewhat. There is a nice example in the bible about the Widow's mite. Charitable giving shouldn't be about your own personal gain.
As for "the rich Tories". Try looking at the Labour leadership too, they're mostly millionaires - except they weren't born that way usually they made it off public pay and benefits, house flipping etc. Or Ed Milliband who benefited massively from his socialist father's tax avoidance inheritance structure. Or Ken Livingstone and his tax avoidance. Boris earns lots but doesn't avoid tax - he's always had enough money so doesn't see a problem with paying tax, despite his presumed personal belief the rates should be lower.
I don't mind someone rich - especially someone who has made themselves rich(er) through private sector enterprise - being a politician. In fact I want the Chancellor to be someone rich, given we use money as relatively interchangeable measure of intellectual ability and management experience. I want successful business people to be able to enter politics, not put off by people attacking them for their wealth. I want lawyers to enter politics not people attacking them for "defending murderers".
The current culture of born and bred politicians who have done nothing offensive career wise, only working in politics, and not understanding how the real world works is incredibly damaging to democracy. We are in serious danger of ending up with the situation where the people who should be running the country don't want to go into politics, especially national politics, and those who do being pretty much useless.
Then there are the tax charity abuse cases. Charities that make loans the business the donor owns. Charities that hold lavish "fund raising" parties that the donor and their guests go to. There are plenty of cases of dodgy abuse, especially as European law means we have to give Gift Aid rates to non-UK charities when foreign charity law is very different.
As for avoiding tax - if you have any long term savings you'll probably be avoiding tax. It's called an ISA. If you have a private pension you'll likely be avoiding tax, through tax relief, salary sacrifice etc.
The state gives tax breaks to incentivise good behaviour. Saving, planning for retirement and giving to charity are all useful things. But as always lots of lawyers and accountants earn lots to work out where the loopholes are, and then exploit them. Cancer Research UK should be allowed to take large donations from wealthy benefactors, but the case for the Sainsbury's getting to buy a vanity project and plaster their name across it stretches the boundary somewhat. There is a nice example in the bible about the Widow's mite. Charitable giving shouldn't be about your own personal gain.
As for "the rich Tories". Try looking at the Labour leadership too, they're mostly millionaires - except they weren't born that way usually they made it off public pay and benefits, house flipping etc. Or Ed Milliband who benefited massively from his socialist father's tax avoidance inheritance structure. Or Ken Livingstone and his tax avoidance. Boris earns lots but doesn't avoid tax - he's always had enough money so doesn't see a problem with paying tax, despite his presumed personal belief the rates should be lower.
I don't mind someone rich - especially someone who has made themselves rich(er) through private sector enterprise - being a politician. In fact I want the Chancellor to be someone rich, given we use money as relatively interchangeable measure of intellectual ability and management experience. I want successful business people to be able to enter politics, not put off by people attacking them for their wealth. I want lawyers to enter politics not people attacking them for "defending murderers".
The current culture of born and bred politicians who have done nothing offensive career wise, only working in politics, and not understanding how the real world works is incredibly damaging to democracy. We are in serious danger of ending up with the situation where the people who should be running the country don't want to go into politics, especially national politics, and those who do being pretty much useless.
#23
Posted 17 April 2012 - 02:48 PM
I by no stretch of the imagination have ever been rich.
I still don't see the issue with taxes. When people say the 'working class' I find that ridiculous. The working class died a long time ago.
We have the benefits class, the normal class and the super rich.
Lots of GPs earn HUGE salaries but people aren't baying for their blood. However, a banker on the same money and people are seething, even though the banker is making more money for the company and economy than he earns. The GP purely costs money.
There probably is a better taxation system, but merely trying to attack the rich through jealousy isn't one of them.
I still don't see the issue with taxes. When people say the 'working class' I find that ridiculous. The working class died a long time ago.
We have the benefits class, the normal class and the super rich.
Lots of GPs earn HUGE salaries but people aren't baying for their blood. However, a banker on the same money and people are seething, even though the banker is making more money for the company and economy than he earns. The GP purely costs money.
There probably is a better taxation system, but merely trying to attack the rich through jealousy isn't one of them.
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