8 out of 10 tax accountants

21/06/12 | Posted by Ian Black

I don't know what 8 out of 10 cats might think of Jimmy Carr's tax affairs, but he has clearly had a rethink. The comedian found himself 'named and shamed' by the Prime Minister for getting involved in an offshore tax scheme that aims to reduce liability to UK tax. The legal rights and wrongs are being looked at by HM Revenue and Customs, so we will see whether, as one person said earlier, it is ruled off-sde or not and they all get a big bill.

 HM Revenue & Customs

Governments set tax rules to match their policy objectives.  On the one hand they need cash, otherwise the doctor’s won’t get anything regardless of what action they take over any reduction in their pension benefits and there will be no schools for Michael Gove to replace GCSEs with old school O’Levels or whatever else emerges.  The simplest tax system is that all income is taxed at x% with no allowances.  But governments recognise that there is a basic level of income needed to live so they give everyone an allowance which ignores the first few thousand pounds.  Then they have to take account of payments in kind, which aren’t strictly speaking cash.  And from this moment on we enter the world of tax planning; how someone orders their affairs to make the tax bill as small as possible.  Add into that a global economy where if income has been taxed elsewhere to tax it here too would be to tax it twice and we get double taxation agreements between countries which gives credit for tax paid elsewhere.  Then there is the positive encouragement through the tax system.  Investing in the start up of certain enterprises is given an allowance and this oils the wheels of new businesses and trade.  These investments are inherently more risky so a bit of a tax boost to the funder helps it all along.

Before you know where you are tax law runs to several volumes and it becomes a specialist area of accountancy.  We have come a long way from Matthew sitting in the tax booth when Jesus approached him and invited him to join his gang.  What has not changed is that all of this has a moral dimension to it.  If it doesn’t, what is driving it?  David Cameron has implied that he thinks it should have, which is good to hear.  Jimmy Carr has decided the same.  Everyone has a moral duty to pay some tax according to their ability for the sake of the common good.  How much is a policy decision of our elected representatives balancing different needs - theirs for funding and recognising that some investments are also for the common good.  ‘Offshore hiding’ is basically selfishness and greed.

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But what a difference between the way Jimmy has taken the criticism compared with Mr Cameron.
Jimmy has taken it on the chin, said sorry and changed his way; David Cameron says he’s done nothing wrong.

#1. By HughB on June 23, 2012

Very good article, well written and very thought out..Just consult any of those <a >cpas in georgia</a> for adept info..

#2. By jean on May 16, 2013




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