Sunday, 19 May 2013

Tax avoidance and tax evasion - who's the villain?

Much is talked these days about Google, Amazon, Starbucks and many other corporations because they aren;t paying as much tax as we'd like them to. Because they legally avoid taxes. Whose the villain?

The UK government, supported by the media, are blaming the corporations. But the corporations are following the rules that the governments have made. If they weren't, they could be prosecuted, fined, thrown into jail, whatever. So whose fault is it that the law isn't what we want it to be?

Parliament makes the law. So parliament is to blame if the laws aren't what we want. Margaret Hodges accuses Google of using smoke and mirrors to avoid paying tax.

The true culprit, is Hodges and her ilk, the other MPs, who are using smoke and mirrors to deflect the blame from those who have made tax laws that we don't think are right, onto the innocent victims, the corporations, who are complying with those tax laws, and paying as little tax as they legally can.

I too, legally avoid paying some of the taxes that I might otherwise be paying. I have Premium Bonds, issued by the government, and the revenue that those generate for me is tax free. Similarly, the ISA - here's a quote from the HMRC web site.

"An ISA is a type of savings account. Basically, if you save in an ISA you are entitled to keep all that you receive from that investment and not pay any tax on it."

Am I evil for taking advantage of the schemes that the government offers and promotes? Of course not. So why should anyone else be evil for paying as little tax as they legally must?

If we don't like the way this works, we should change the law. Not blame people and corporations who are complying with the law.

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