Yes, this is the Chariot’s Law Week! And this time, Auntie Beeb is getting it in the neck! She’s paying some staff via their own private companies rather than direct, which means they can pay substantially less income tax. The Public Accounts Committee reckons that’s morally, if not legally wrong, having already forced a couple of thousand civil servants to give up a similar arrangement.
Now this strikes me a something of a conundrum. Either it is legal to employ people in this way (as I have been during one of my incarnations) or it isn’t. The Gordian Knot is the gubmint’s to cut, but what it cannot do, imho, is to play the morality card whenever they suffer PR problems. It would be like giving special tax breaks to, say, married couples and then implying that such couples were exploiting the system.
Of course the Dept. of Envy is quick to point out that some of the Beeb’s beneficiaries are famous names. So what? Does that somehow validate their gripe?
What do you think? http://www.telegraph.co.uk/culture/tvandradio/bbc/9587937/BBC-complicit-in-tax-avoidance-for-household-names-say-MPs.html
Boadicea's Chariot 
I don’t think anyone should escape tax. The more tax they dodge the more the rest of us have to pay. The BBC is a public service company funded through the licence fee and it is inappropriate to enable big names, many of whom I would be pleased to see the back of, escape paying their dues.
Envy doesn’t come into it.
Ludicrous to target this sort of arrangement by the BBC. As you say it’s either legal or it isn’t.
Where the Law is concerned nothing is ever cut and dried.
The main problem with taxes, especially income tax, is that they are so complicated. Just make them much simpler and there would be far less opportunity for crafty tax accountants to find ways round them. Of course, that is not likely to happen while most MPs who have ever done a real job are ex-lawyers and accountants!
We need a flat rate tax system, but as you point out an army of freeloaders benefit from the current mess.
Given that the tax system is exceedingly complicated, I see no reason why any legal means by an individual or company to maximise tax efficiency should not be employed. I see no moral imperative to pay any more tax than is legally necessary.
As has been rightly pointed out, if the system were simplified then it wouldn’t be possible or necessary to do so.
I regret to say that I do not think this is clearcut.
Both the UK and USA tax codes are literally thousands of pages long. The more money you have the more deductions and sideways legal steps you can take with the aid of very expensive accountants. All of which is legal.
However, the result of this is to ensure the rich to reduce the percentage of income they pay as tax, sometimes to the point of being below in percentage terms their own employees. This is where the immorality comes in. As most of you have probably heard Warren Buffet pays a less percentage than his secretary and bemoans the fact.
Thus the perception of the general public that the rich are not paying their ‘fair share’ and they are dead right! Hardly an acceptable facet of the ‘We are all in it together’ is it?
It surely is immoral that the middle section of the upper echelons of the PAYE system should bear the brunt for the two extremes of the rich and the poor but that is what is happening in both the UK and USA.
Of course the flat rate is what is needed but the only people who can implement such a change are those that are benefiting from the current system ie the lawmakers. How many turkeys do you know of voting for Christmas and Thanksgiving???
The fact that the establishment, and the BBC is part of the tax funded establishment, will not/do not reorder the tax system to make it more equitably distributed throughout the population is not only immoral but totally abhorrent.
The middle class must bear a part of the blame, complacency has played a large part in their quiescence.
Whilst they were doing fine they were content to allow morality to be subsumed in all parts of life. Now they have woken up to the fact that they are being shafted left right and centre they do not like it and are unwilling to make the level of objection to correct the situation.
I might point out that both the French and Russian revolutions were started by the professional middle classes before the hard left took over. It appears to be the European way of doing things. I suggest that very little will change until the middle classes get off their plump behinds and actually man the barricades at least in a metaphorical manner! I do not think that sitting at home safely in the Shires is an option that is going to survive much longer. How degraded must a lifestyle become before one stands up and is willing to be counted?
So, to answer the question, I believe that it is quite possible to be both legal and immoral but I don’t think that envy really is in the picture. It may be for the simple minded but the problem has become truly systemic in our purported democratic society.
I think we’ve been around this loop before? I go with Araminta’s No 6. I pay my taxes according to the law – not a penny more.
A question arises, however; if BBC employees are being paid as corporations, or however the tax-avoidance is done, then, surely, they are not full-time employees, so their contracts can be ended with little fuss…
PS… according to the law, and taking advantage of whatever benefits I may to cut my tax bill.
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Absolutely right. and what’s wrong with manning a real barricade?
I suspect it will come to that in due course.
Don’t see why ‘Springs’ should be confined to Arabs!
I reckon the graft, fiddling, evasion and nepotism of the ruling class is just as bad in the West as it was in the East, just marginally less obvious.
But it needs the middle class to join the lower for it to take effect.
The “degraded lifestyle” is rather more a result of economic downturn than the inequities of the tax system, though they do exist.
The French and Russian revolutions were rather more to do with overthrowing the “ancien régime”, certainly by the growing economic power of the middle classes, but hardly relevant to our current system.
The idea of taxing the super rich and corporations is a somewhat socialist doctrine and doomed to failure; they simply move to a rather more sympathetic tax regime and any benefit they bring to the economy, by way of employment and etc, is lost.
They are being given a very easy ride by the current tax regime but a simplified, fairer tax system would probably be the answer, given that all other requirement, such as a skilled labour force, etc be fulfilled.
Bravo.
Yes, most of the BBC employees who were advised to use this system are essentially on contracts and not PAYE. This was also the case, as Janus wrote above, for highly paid employees in the public sector!
According to what I have understood from various articles this is not a change in the law, merely a directive. Other contractors who don’t work in the public sector or the BBC seem to be exempt, at the moment.
I could be wrong of course, but it was accepted and perfectly legal until recently when the government made noises about the “immorality” of these legal means of maximising tax efficiency.
Araminta,
“Tax efficiency” well it’s sounds better than tax dodging or tax evasion.
It’s also legal, Jazz. 🙂
.. tax avoidance is another way of putting it, also legal.
Jazz and Arrers, tax evasion is illegal; avoidance ain’t. When I was employed via a private company (my own) it was because I was a consultant working for more than one employer. A ‘normal’ contract wouldn’t do because I would have had to work solely for one. It’s quite common, not immoral and not remotely ‘evasive’. I suspect the big names at the Beeb do the same for the same reasons. They are not exclusively tied to one contract.
Araminta, I think that we all understand that. But is not fair that some people can evade their fair share of the tax burden, and that is the problem that needs addressing although given our spineless politicians and corrupt and incompetent bureaucracy I’m not holding my breath.
Reblogged this on Jazz606's Weblog.
I would like to edit the above comments but there seems to be no edit function.
CO’s #7 says it all for me as a One Nation Tory libertarian (not necessarily always in that order and sometimes a difficult course to steer). It will probably never happen but flat rate is the best answer for me.
And I do believe that the barricades of the PAYE middle classes might start to be erected, subject to the necessary planning permissions and environmental considerations, if we do not make our taxation system less complex and open to loophole exploitation.
PS jazz606, hi.
Your link takes you to your blogsite but gives a ‘Page not Found’ message. I take it you might still be editing the blog in question?
No I’m not, I was just playing around with wordpress. The problem is that I don’t have editing privileges here.
No I’m not, I was just playing around with wordpress. The problem is that I don’t have editing privileges here.
Hi again jazz606.
Bear in mind that we can only edit our own posts in the Chariot. Only CO and the site moderators [whom God preserve! ( (c) Beachcomber )],, Boadicea and Soutie,, can edit this particular one and the comments thereanent.
Are you saying that you do not have author status here to allow you to write your own posts?
jazz606 No 18. ‘…s not fair that some people can evade…
The difference between tax avoidance and tax evasion was pointed out in a couple of comments. I avoid as much tax as I can. I evade none of my responsibilities.
There is a counterpoint to this discussion, of course, which concerns the responsibility of governments to be responsible stewards of the tax revenues which we agree to provide…
Yes, I wouldn’t mind getting them back again though.
We have a system where the better off can avoid tax and the less well off cannot. This not fair
Yes I think I understand that, no need to belabour the obvious.
Jazz. We also have a system where the better off are penalised for being better off. This is not fair either.
We also have a system where people are taxed twice of they are prudent and save and invest their money. This is not fair either.
A flat tax would avoid the first of these issues. Stopping taxing people when they stop working would go a long way to avoid the second – consumption would, of course, still be taxed through the pernicious workings of VAT.
Re avoidance/evasion…in which case you need to clarify which you are posting about. Tax evasion is not unfair, it is illegal.
Sorry to burst anyone’s bubble here but the whole idea of “Income Tax” is unreasonable,
why tax income? What should be taxed is consumption, it is a simple tax, requires no
administration (can be collected by the sellers and remitted to the treasury), no forms to
fill in every year, no audits, no tax accountants, no lawyering sharks and it’s easily
verified (if you sell $X then send the gov’t $X/6).
If income tax is a dumb idea then a flat tax compounds it.
Here’s the real data for the US (other countries probably have similar distributions but
different absolute earnings)
In a few words. To enter to the top 1% a wage earner must make at least $380,000 per
year, this group as a whole earn 17% of the total earnings but pay 36% of the total taxes.
Not fair.
It does not get any better, to qualify for the top 50% (which of course includes the top
1%) one must earn at least $33,000 p.a., this group pay 98% of all the taxes. The other
50% earning less than $33,000 pay just 2% if the total taxes (also not fair)
The estimable Mr. Buffet (like myself) owns the company for which he toils, like me he
is told by the tax authorities that he MUST pay himself, he chooses to pay himself
$30,000 per year (like about 50% of the population) consequently we pay little tax.
His secretary will not work for less than $75,000 p.a. so she pays more tax.
Do we live on $30,000 p.a.? No, our companies make profits and (after paying taxes on
them) have some cash left over to distribute (as dividends), as owners we get the
dividends, on which we are taxed a second time and if we are prudent we get to invest
the dividends (now Capital) and make a return, which is then taxed a third time.
Mr Buffet and I would welcome a flat tax, let’s make it 15%, I could then pay myself
$500,000 p.a. safe in the knowledge that my taxes ( $75,000) would be the identical
proportion of my earnings as all the other taxpayers, including the 50% freeloaders
earning less than $30,000 under the present system (each of them then tossing in $4,500 p.a.
instead of sod all).
for MORE?? information:
http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0
Click to access wp1.pdf