Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
GaryC wrote:Paul.
If BarryW is spot on, then you both have to start defending those that avoid working by finding loopholes in the benefits system.
If they are both legal and you have no morals about one, then you must defend the other.
Yes?
On one hand you have people protecting their own assets, earned by them, protecting those assets from the greedy insatiable grasp of the state. On the other hand you have people who sit on their backsides taking benefits handed out by politicians trying to buy favour. I will add, knowing the sensitivity of some, that I am not against genuine claimants but, nevertheless the State is far too generous and people need to be made to make their own provision for anything beyond a safety net.
DT1- Location: Dover
- Registered: 15 Apr 2008
- Posts: 1,116
Hear, hear Barry.
An excellent synopsis of post #2989
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
you're on form tonight daz - made me laugh out loud.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Keith Sansum1
- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
2,998 your spot on
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Guest 716- Registered: 9 Jun 2011
- Posts: 4,010
Hope Charlie continues his hunt for Tax Avoiders and their Finance Johnnies through the whole system....
Charlie Elphicke (Dover, Conservative)
It is a pleasure to speak in the debate, and I congratulate my hon. Friend Chris White on securing it.
Hard-working families want a better life for themselves and their children. They go out each day, work hard, strive, and pay their taxes. They face increasing costs in some areas of their lives, particularly in rising household bills for gas, electricity and water. The average family have seen their annual household bills rise by £384 since 2010.
I am concerned about whether utility companies are paying the appropriate amount of tax. I have done a study of nine water companies, which, collectively, have
a turnover of £28 billion and operating profits of £10 billion a year, yet they paid just £541 million in tax, an effective tax rate of 5%, which goes down to about 3% if we take into account those who have been declaring tax losses.
I have looked at two electricity companies, EDF and RWE npower, which have a collective total turnover of £25.6 billion and operating profits of £1.7 billion, yet they paid no tax whatever. It cannot all be explained by capital allowances. Foreign-owned utilities, particularly in the water industry, have been engaging in schemes using debt interest to avoid tax, which, on my calculations, have resulted in a loss to the Exchequer of about £1 billion over the last three years.
Let us take the example of Southern Water, which covers the area I represent. Over the three most recent years for which figures are available, it generated more than £2 billion in turnover, operating profits of £767 million and paid a net tax charge of £45.9 million. That is an effective tax rate of 6%. Yorkshire Water, over the last three years, generated £2.6 billion in turnover, operating profits of £990 million, and yet received a net tax credit of £46.2 million. Anglian Water, over the last three available years, generated £3.3 billion in turnover, operating profits of £1.4 billion and paid a net tax charge of just £124.7 million. That is an effective tax rate of 8.9%.
What concerns me particularly is that those companies have been abusing the interest deduction system. Over the last three years, Southern Water made some £481.6 million of net interest and interest-related payments to the multinational owners of group companies overseas. According to my calculations, the tax forgone is a potential £125 million for the Exchequer. Yorkshire Water, which is especially egregious in this respect, made £548.5 of net interest and interest-related payments to group companies. According to my calculations, the tax forgone is £142 million. Anglian Water made £365 million of net interest and interest-related payments to group companies over the three most recent years for which figures are available. According to my calculations, the tax forgone is some £95 million.
Over the three most recent years for which figures are available, EDF, which is owned by the French Government, made £268.4 million of interest payments to group companies. According to my calculations, the tax forgone is potentially £70 million, if we assume a corporation tax rate of about the average, 26%. Npower made £58 million of interest payments to group companies. According to my calculations, the tax forgone is £93 million.
I am calling on the regulators to examine the position and to say that if the water companies, in particular, are receiving too high a return in total, they should either be subject to a windfall tax or reduce customers' bills. Tax-avoiding water companies, and other utility companies, should be made to give a rebate to hard-pressed customers who have faced increased bills in recent years. I hope that Ministers will consider the options available to them. In any event, tax law should be changed so that interest is no longer favoured over equity. Specifically, interest payments from one group company to another should not be tax-deductible.
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
well will be interesting to see how Charlie gets on
maybe he could join the concerns over Wonga
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Guest 716- Registered: 9 Jun 2011
- Posts: 4,010
He should ....his government is.........................
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
His govt isn't reg that's the problem
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Guest 716- Registered: 9 Jun 2011
- Posts: 4,010
Wonga's Henry Raine And The Public Accounts Committee Can't Do Maths
Henry Raine, head of regulatory and public affairs at the payday loans company, defended
his business to the House of Commons Public Accounts committee, where he was grilled by
chair and Labour MP Margaret Hodge on the effectiveness of consumer credit regulation.
Raine said the company had handed out around six million loans, and 85% of people pay
back on time.
The MPs also struggled to work out how many late loans that would add up to, with Hodge
suggesting one milllion, before the commitee settled on the correct number - 900,000.
Wonga's representative insisted that the process was transparent, even for those with poor maths skills.
"We want to show people what they will owe in pounds and pence, not APR. People can't calculate
APR. I can't calculate APR."
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
Reg
he may not be able to calculate APR
but he knows how to rip people off
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Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Lets step back a bit.
I do not want to defend pay-day loans, I hate the concept and ultimately they are best avoided.
But think on this. We see these massive APRs banded around, indeed they have to quote them. But these loans are designed to be repaid within days, not a year or years so the APR is not an issue if used correctly. The problem occurs when people do not repay them and/or keep using them on a regular basis.
If someone borrows £100 on Friday to tied them over with a view to repay to Monday and have to repay £5 as a fee. That seems fine, some might think 5% interest and it is certainly not a high cost. but we have to remember the money is borrowed for, say 3 days and the APR is an annualisation of that fee meant to cover a 3 day loan and that is how x0000% comes from. regardless of how many thousand % it is still just a fiver if repaid 3 days later.
Is that £5 an unreasonable fee? I don't think so - there are fixed costs and overheads to administer the fee after all. A more reasonable APR of say 100% (!!!!) would work out at pennies for a 3 day loan and no-where near enough to cover those costs.
As I say these loans are awful and are best avoided, even with just a £5 fee for a few days, but let us not exaggerate the problem and it certainly would not be ripping people off to charge a fiver to borrow £100 for 3 days.
PS - I have never used one of these, will never use one and will never suggest to a client to do so. Hence I do not know the actual cost of borrowing £100 for 3 days and used the figure only to illustrate how the massive APRs can come about fro what really is a small fee.
Guest 671- Registered: 4 May 2008
- Posts: 2,095
Paul.
I do not defend the illegal and I have said many times that I agree with BarryW that the benefits system is flawed,with and without loopholes.
Why he continues to accuse me of wanting people to pay more tax than they owe, is laughable.
But what makes me sick is the way he defends his ilk with praises for using legal loopholes but trashes others for using other legal loopholes.
He needs to consider that one is a consequence of the other and both should stopped and with the state this country is in now, the sooner the better.
"My New Year's Resolution, is to try and emulate Marek's level of chilled out, thoughtfulness and humour towards other forumites and not lose my decorum"
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
There is a difference GaryC between protecting your property from theft which is what every reasonable person does and seeking to sponge of other people. That is not to suggest that genuine claimants are spongers though, as they cannot help their situation and I agree with a safety net for people being provided (I have to get that in to stop some people getting all hysterical).
What you earn is yours. Full stop. How you spend it is up to you. Tax is just a necessary evil that we have to pay but only what the state by law says we have to pay and no more. The State is an inefficient and wasteful custodian of our money as well that also heaps more and more costs on all of us and it is not only tax I am talking about in that respect.
Guest 671- Registered: 4 May 2008
- Posts: 2,095
BarryW.
Benefit fraud = cost's to tax payers?
A. Last year, 0.7% of total benefit expenditure was overpaid due to fraud, according to the DWP's official estimates. This totalled £1.2bn over the year.
Tax avoidance = cost to tax payers?
A. HMRC consistently estimates the UK's tax gap - the gap between what HMRC thinks it should receive versus what it actually gets - at more than £30bn per year. Others estimate this is far, far higher.
I totally agree with your last sentence #3014
"My New Year's Resolution, is to try and emulate Marek's level of chilled out, thoughtfulness and humour towards other forumites and not lose my decorum"
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
GaryC - I would be rather more worried if a HMRC estimate was actually right for a change..... Just because they think they might get this or that does not mean they have the legal powers approved by parliament to get it.
Tax avoidance is not a cost to taxpayers at all, it is taxpayers exercising their rights to protect their property often in small ways but also in many much larger ways.
What about those people who, through lack of knowledge or because they have not obtained advice are actually paying too much tax?
It works both ways. not a week goes by when I do not save people tax and I am not an accountant and no, this is not rich people either, people just like most who read this forum. Some examples of what I find daily of people paying too much tax because they do not know better....
Former Labour Chancellor (Mr make the rich pips squeek) Denis Healey once said that inheritance tax is a voluntary tax and he was right. Far too many people do not arrange their affairs is well tried and tested, legal ways, to mitigate and reduce these liabilities.
Far too many couple have their savings in the name of the taxpaying husband (usually) when the interest could be tax free in the name of the non-earning spouse. Then there are ISAs - again far too many are not taking advantage of the tax benefits. Pensions, we have a whole generation of people who have missed out of tax relief on contributions.
What about a family with all the pension saving in the earning husband's name. At retirement he could be a taxpayer while his wife will have tax allowance to spare - I had a case like that last week.
HMRC are getting much more than that £30bn more than they think they should because of all this, I can assure you. A double edged sword that argument of yours.
This is why the tax system needs simplifying as much as it is needed to eliminate complex and sophisticated tax avoidance methods. Flat and low simple taxes are fairer and will increase revenue to HMRC while also boosting growth eliminating many anomalies that often discourage investment.
Guest 671- Registered: 4 May 2008
- Posts: 2,095
BarryW.
"Tax avoidance is not a cost to taxpayers at all"
Margaret Hodge, the chair of the Public Accounts Committee, told ITV News: "I understand why they are tempted to go down this route but they are wrong. They should not be engaging in aggressive tax avoidance.
"I have to say the people who benefit from this are the accountants who have set up this system and they are taking money out of the NHS, out of direct services...and pocketing it and that is tax payers' money."
One agency said that contracts start and stop so often so often that "a lot of their doctors have 200 P45s".
It might be legal but it is not ethical.
"My New Year's Resolution, is to try and emulate Marek's level of chilled out, thoughtfulness and humour towards other forumites and not lose my decorum"
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
What to you is a cost is the rights of an individual to me.
No comment about people who pay too much tax then because they don't know better?
Guest 671- Registered: 4 May 2008
- Posts: 2,095
BarryW.
I moaned every week when I looked at my payslip and saw the amount of tax I paid and of course I would much rather have paid nothing at all, like many of those that you support.
But what would happen if no one paid their Tax's?
"My New Year's Resolution, is to try and emulate Marek's level of chilled out, thoughtfulness and humour towards other forumites and not lose my decorum"
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
Wonga's lending prices are on the pay lenders thread
ALL POSTS ARE MY OWN PERSONAL VIEWS
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson