Attention: Please take a moment to consider our terms and conditions before posting.
Options

The Panama Papers: Information wants to be free

1789101113»

Comments

  • Options

    All the outrage about rich bastards avoiding tax and I'm wondering how many who are so outraged work for companies operating flex benefit schemes. If so they are probably participating in a National Insurance avoidance scheme.

    When you exchange salary for your personal pension contribution to be paid by the company the only benefit is a reduction in your recorded pay for calculating National Insurance contributions. The scheme exists for no other purpose.

    You don't even need an account in Panama or have your own company and no one complains about it, it's perfectly legal. If the avoidance is outlawed i can hear the screams of outrage from those affected already.

    It's legal because it's explicitly included in legislation introduced to and approved by the Parliament. There are specific things that can and can't be used as benefits, and these are things/behaviours that presumably Parliament has chosen to encourage.

    I'm not sure how that's equivalent to operating using shell entities or similar across various jurisdictions, shell companies whose sole purpose is to avoid UK legislation and exploit quirks of international laws so you can avoid paying tax.

    Looking forward to the explanation.
  • Options
    IAgree said:

    Emma Watson, Sarah Ferguson, Heather Mills, Simon Cowell and Paul Burrel all have accounts in Panama with this firm. Watson does this for privacy apparently - wonder why the others have accounts there?

    http://www.telegraph.co.uk/news/2016/05/10/panama-papers-emma-watson-named-in-latest-data-release/

    I never buy the "privacy" argument. What extra privacy is there? Unless someone spills the beans, I've no more chance of finding out if she's got an account at Barclays in Lewisham.

    Privacy always sounds like code for not having to tell anyone (tax man included) about my money.
  • Options

    IAgree said:

    Emma Watson, Sarah Ferguson, Heather Mills, Simon Cowell and Paul Burrel all have accounts in Panama with this firm. Watson does this for privacy apparently - wonder why the others have accounts there?

    http://www.telegraph.co.uk/news/2016/05/10/panama-papers-emma-watson-named-in-latest-data-release/

    I never buy the "privacy" argument. What extra privacy is there? Unless someone spills the beans, I've no more chance of finding out if she's got an account at Barclays in Lewisham.

    Privacy always sounds like code for not having to tell anyone (tax man included) about my money.
    I agree to an extent, but I'm guessing she was advised to work underneath the advantages afforded via a Ltd company - meaning some data would be available under the public domain, via the likes of Companies House and the numerous companies that now index it.

    I still don't buy the privacy line though.
  • Options
    IA said:

    All the outrage about rich bastards avoiding tax and I'm wondering how many who are so outraged work for companies operating flex benefit schemes. If so they are probably participating in a National Insurance avoidance scheme.

    When you exchange salary for your personal pension contribution to be paid by the company the only benefit is a reduction in your recorded pay for calculating National Insurance contributions. The scheme exists for no other purpose.

    You don't even need an account in Panama or have your own company and no one complains about it, it's perfectly legal. If the avoidance is outlawed i can hear the screams of outrage from those affected already.

    It's legal because it's explicitly included in legislation introduced to and approved by the Parliament. There are specific things that can and can't be used as benefits, and these are things/behaviours that presumably Parliament has chosen to encourage.

    I'm not sure how that's equivalent to operating using shell entities or similar across various jurisdictions, shell companies whose sole purpose is to avoid UK legislation and exploit quirks of international laws so you can avoid paying tax.

    Looking forward to the explanation.
    Its not explicitly included in any legislation. It's not approved by Parliament, it's an artificial device with no objective other than to avoid National insurance. It's no different to any other legal avoidance scheme.

    Any more you need explained?
  • Options

    IA said:

    All the outrage about rich bastards avoiding tax and I'm wondering how many who are so outraged work for companies operating flex benefit schemes. If so they are probably participating in a National Insurance avoidance scheme.

    When you exchange salary for your personal pension contribution to be paid by the company the only benefit is a reduction in your recorded pay for calculating National Insurance contributions. The scheme exists for no other purpose.

    You don't even need an account in Panama or have your own company and no one complains about it, it's perfectly legal. If the avoidance is outlawed i can hear the screams of outrage from those affected already.

    It's legal because it's explicitly included in legislation introduced to and approved by the Parliament. There are specific things that can and can't be used as benefits, and these are things/behaviours that presumably Parliament has chosen to encourage.

    I'm not sure how that's equivalent to operating using shell entities or similar across various jurisdictions, shell companies whose sole purpose is to avoid UK legislation and exploit quirks of international laws so you can avoid paying tax.

    Looking forward to the explanation.
    Its not explicitly included in any legislation. It's not approved by Parliament, it's an artificial device with no objective other than to avoid National insurance. It's no different to any other legal avoidance scheme.

    Any more you need explained?
    Does this make me an avoider or an evader?

  • Options

    IA said:

    All the outrage about rich bastards avoiding tax and I'm wondering how many who are so outraged work for companies operating flex benefit schemes. If so they are probably participating in a National Insurance avoidance scheme.

    When you exchange salary for your personal pension contribution to be paid by the company the only benefit is a reduction in your recorded pay for calculating National Insurance contributions. The scheme exists for no other purpose.

    You don't even need an account in Panama or have your own company and no one complains about it, it's perfectly legal. If the avoidance is outlawed i can hear the screams of outrage from those affected already.

    It's legal because it's explicitly included in legislation introduced to and approved by the Parliament. There are specific things that can and can't be used as benefits, and these are things/behaviours that presumably Parliament has chosen to encourage.

    I'm not sure how that's equivalent to operating using shell entities or similar across various jurisdictions, shell companies whose sole purpose is to avoid UK legislation and exploit quirks of international laws so you can avoid paying tax.

    Looking forward to the explanation.
    Its not explicitly included in any legislation. It's not approved by Parliament, it's an artificial device with no objective other than to avoid National insurance. It's no different to any other legal avoidance scheme.

    Any more you need explained?
    You're telling me that HMRC has provided this guide on tax relief for pension contributions without there being any legislative support?
  • Options
    If you read what I said its avoiding National Insurance. Nothing to do with legitimate tax relief.

    Tax on £100 with a £5 pension contribution is the same as £95 with zero pension contribution.

    NI on £95 is less than NI on £100 with a £5 pension contribution.

    So you reduce your salary by £5 and your employer pays the £5 Contribution on your behalf.

    Don't have a problem with it, just pointing out the hypocrisy of it only being unacceptable if you avoid tax and you're rich..

    You will not be surprised to know that the company also avoid NI and is why flex benefit arrangements are so widely employed and HR encourage you to participate.
  • Options
    My Company gives you half of what they avoid as well.

    I feel really guilty now.
  • Options
    Addickted said:

    My Company gives you half of what they avoid as well.

    I feel really guilty now.

    You're lucky, some companies just keep it.

    Have no idea why it's implicitly condoned by government. My theory is that it's no different to a non contributory pension and you can't distinguish between the two so it can't be addressed without merging NI and income tax.

    Following extract from Accounting article:

    The Treasury is very coy about publishing figures showing how much national insurance is being lost as a result of pension salary sacrifice. Part of this may be because national insurance is income hypothecated to pay for the benefits offered by the DWP and the two departments are supposed to be at arms length. National Insurance is officially not a tax. But the Treasury has long regarded national insurance as the "tax that dare not speak its name"and they are quite happy to stealthily adjust (e.g. increase) national insurance in lieu of increasing income tax. We might regard national insurance as a stealth tax.

    Avoiding paying national insurance through salary sacrifice/exchange is not complicated - but it requires employers to be careful on a number of fronts;
  • Options
    I get the suspicions about the "privacy" argument, after all what have they got to hide and why?
    Nonetheless, there are all sorts of ways in which information can be disclosed in the UK. Some might prefer it isn't. My old job gave me the rights to harvest anything I wanted if I deemed it necessary or appropriate. Someone's bank account? No problem, I'd just require a UK bank to provide everything I wanted. No need for a warrant or anything time consuming like that, I'd just send them a notice.
    Similarly, many large transactions would pretty much automatically trigger a money laundering suspicious activity report.
    In addition, while data reporting is supposed to be aggregated and therefore not personally identifiable, it is not beyond the realms of possibility that, say, an author's receipt of royalty/film right payments would be sufficiently large to look unusual and trigger a plausibility check on a bank's regular data reporting.
    Some people just don't like others knowing about their affairs. Personally I don't care who knows what really but I suppose the more you have ....
  • Sponsored links:


  • Options
    So, news today, "Foreign companies will be forced to disclose ownership before buying English property". This in an effort to crackdown on laundered money being used to fund property purchases. It seems 100k offshore companies own mainly London properties.

    First is that just English or English & Welsh? Presumably, as ever, NI and Scotland will have their own laws?

    Second is that ALL foreign companies, like Staprix NV and all properties, like football grounds?

    Third, It's going to help right? I'm reminded of those confirmation pages that pop up on the BBC's iplayer and porn sites asking you to confirm you are over 18 or whatever. Of course, 15 year old boys always answer this question truthfully don't they? Presumably the same will go for the likes of the Russian mafia and they really will use their real names when disclosing beneficial ownership..... won't they?
  • Options
    Addickted said:

    IA said:

    All the outrage about rich bastards avoiding tax and I'm wondering how many who are so outraged work for companies operating flex benefit schemes. If so they are probably participating in a National Insurance avoidance scheme.

    When you exchange salary for your personal pension contribution to be paid by the company the only benefit is a reduction in your recorded pay for calculating National Insurance contributions. The scheme exists for no other purpose.

    You don't even need an account in Panama or have your own company and no one complains about it, it's perfectly legal. If the avoidance is outlawed i can hear the screams of outrage from those affected already.

    It's legal because it's explicitly included in legislation introduced to and approved by the Parliament. There are specific things that can and can't be used as benefits, and these are things/behaviours that presumably Parliament has chosen to encourage.

    I'm not sure how that's equivalent to operating using shell entities or similar across various jurisdictions, shell companies whose sole purpose is to avoid UK legislation and exploit quirks of international laws so you can avoid paying tax.

    Looking forward to the explanation.
    Its not explicitly included in any legislation. It's not approved by Parliament, it's an artificial device with no objective other than to avoid National insurance. It's no different to any other legal avoidance scheme.

    Any more you need explained?
    Does this make me an avoider or an evader?

    It's actually avoision.
  • Options
    edited May 2016
    Where did all this rubbish about avoiding NI come from? People don't get their GROSS earnings paid into a tax haven to avoid paying national insurance. Corporation tax and dividend tax equivalent to paying PAYE? Crap. The clue is in the phrase "tax avoidance". These countries don't do PAYE or CT or Div Tax or Inheritance tax (or NI), they have rich friendly admin charges. That's why thousands of UK residents con HMRC into allowing their earnings to be paid gross into offshore accounts, with the connivance of honest Dave.
  • Options

    Addickted said:

    My Company gives you half of what they avoid as well.

    I feel really guilty now.

    You're lucky, some companies just keep it.

    Have no idea why it's implicitly condoned by government. My theory is that it's no different to a non contributory pension and you can't distinguish between the two so it can't be addressed without merging NI and income tax.

    Following extract from Accounting article:

    The Treasury is very coy about publishing figures showing how much national insurance is being lost as a result of pension salary sacrifice. Part of this may be because national insurance is income hypothecated to pay for the benefits offered by the DWP and the two departments are supposed to be at arms length. National Insurance is officially not a tax. But the Treasury has long regarded national insurance as the "tax that dare not speak its name"and they are quite happy to stealthily adjust (e.g. increase) national insurance in lieu of increasing income tax. We might regard national insurance as a stealth tax.

    Avoiding paying national insurance through salary sacrifice/exchange is not complicated - but it requires employers to be careful on a number of fronts;
    Isn't it encouraged because they are trying to move us to private provision of pensions, like they have with further education, NHS and now trying with the rest of education?

    The rest of us who aren't using either method, paying our tax in full, can we continue to feel outraged?
Sign In or Register to comment.

Roland Out Forever!