Fact File: Tax Avoidance
Thursday 21 June 2012
As any first-year accountancy student will tell you, there’s a big difference between tax evasion and tax avoidance. While the former could land you in prison for seven years, the latter is the perfectly legal use of loopholes by celebrities, big business, and anyone else who can afford a financial advisor.
Or that was the pre-recession consensus, at least. With public coffers emptying faster than a leaky bucket and “benefit scrounger” rhetoric losing steam, tax avoidance has become moral outrage magnet for both left and right. In 2010 protest group UKUncut mounted a campaign against high street tax avoiders and by 2012 Conservative Chancellor George Osborne was also on board, promising to crackdown on "aggressive tax avoidance" in his Budget speech.
Since then, the press have outed high-profile tax avoiders at regular intervals including top level civil servants, mayoral candidate Ken Livingstone, musician-turned-activist Bob Geldof and comedian Jimmy Carr, whose K2 tax scheme David Cameron branded “morally wrong”. But if everyone agrees these schemes are wrong, why are they still legal?
1% - Income tax rate reportedly available to members of the legal K2 tax scheme used by Jimmy Carr. Source: The Independent
98 – Number of FTSE 100 companies operating out of tax havens. Source: ActionAid
£25bn – Estimated annual cost of tax avoidance, according to 2008 research. £13billion of this is lost to individuals and £12billion to the 700 largest corporations. Source: Tax Research UK and the TUC
10% - Average rate of tax paid by top earners, according to a confidential HMRC study seen by George Osborne. Source: The Telegraph
HMRC goes on £1bn retro warpath, David Jetuah, AccountancyAge, 2010
Your Money and How They Spend It: Tax Avoidance, BBC Two, 2011
Tax avoidance – it’s not what you earn that counts, it’s what you pay. Mary Dejevsky, The Independent, 2010
Let Jimmy Carr’s hypocrisy be a timely lesson to the Chancellor, Matthew Norman, The Independent, 2012
How Apple Sidesteps Billions in Taxes, Charles Duhigg, The New York Times, 2012
1696 – Windows are bricked up to avoid the window tax. It is eventually repealed in 1851.
March 2010 – The Government sets out plans to raise £1.6bn by allowing HMRC to crack down on tax avoidance retrospectively
Feb 2011 – Barclays reveals its UK corporation tax bill for 2009 was £113m, amounting to around 2.4 per cent of its £4.6bn annual profit.
May 2011 – Robert Field, the head of tax at Farrer & Co, the Queen’s lawyers, advocates tackling corporate tax avoidance by switching from a “legal certainty” approach to a principles-based approach.
Nov 2011 – HMRC officials are criticised over deals with Vodafone and investment bank Goldman Sachs, which allowed them to pay less tax than they'd otherwise be liable for.
Feb 2012 – Following the revelation that head of the Student Loans Company avoids tax by having his salary paid into a limited company, the practice is revealed to be common throughout Whitehall
June 2012 – Comedian Jimmy Carr and members of the pop group Take That are outed as beneficiaries of tax avoidance schemes.
- 1 Apple has installed security backdoors on 600m iPhones and iPads, claims security researcher
- 2 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 3 Louis van Gaal gets tough with Manchester United players, with Darren Fletcher and Luke Shaw berated in public and Phil Jones left looking bemused
- 4 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 5 Peaches Geldof inquest: Tragic final moments of socialite's life reveal she lied to husband about failed heroin tests
Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
Israel-Gaza conflict: Deadly flechette shells 'used by Israeli military in Gaza Strip’
Malaysia Airlines MH17 crash: Blogger captures footage ‘showing BUK missile launcher that shot down jet’ now back in Russia
Peaches Geldof inquest: Tragic final moments of socialite's life reveal she lied to husband about failed heroin tests
Israel-Gaza conflict: The myth of Hamas’s human shields
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
£40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...
£30000 - £40000 Per Annum + excellent benefits: Clearwater People Solutions Lt...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
Excellent Salary: Austen Lloyd: Senior Private Client Solicitor - We are makin...