Alexander's arguments

Richard of York

Thats all very well but 900m extra spending against 30% staffing cut backs in HMRC.
Very little chance of actually getting any mony back as the plan is to be more efficient at collection by 2015. Those who can will have found plan P or Q by then. Its just a game of shops with the money always in the next arcade.
Wealth tax now that would be an idea.
Death tax might even by better @ 130% for estates over 10m.

Cottage Pie

These cuts have only one man's name on them: GORDON BROWN. Without his disastrous policies there would be have been no need for cuts of this magnitude. Gordon Brown never learnt that money doesn't grow on trees and Father Chrismas doesn't exist

Marcher Baron

As a pensioner I try to avoid paying as much tax as I legally can. To hear from Danny Alexander that he's going to target me is far from helpful when I'm hardly filthy rich and I'm paying tax on both my sole income (my pension) and my savings.

Bluebottle

The man's an idiot. If I order my affairs so I avoid paying tax, that is legal. If I hide a source of income from HMRC, that is evasion and illegal.

As Chief Secretary to the Treasury you would think he should know the difference.

Another over promoted Lib-Dem.

Chuck Unsworth

Evasion and Fraud - fine, but Avoidance? Is he proposing to change the entire panoply of taxation?

Avoidance is a nebulous term, but I take it to mean that one is claiming (all) legal allowances for reductions in one's taxation. What on earth is wrong with that?

If Alexander is seeking such change he needs to come out with it rapidly. It'll be particularly interesting to see the effect on Lib Dem party membership. I'd guess that a fair number are self-employed. Alexander needs to tread very warily.

Simon Stephenson

This shouldn't reassure anyone unless in the fullness of time it becomes clear that it is something of substance, and not just wind. The Conservatives have a well-deserved reputation for taking the line on tax that it is a compulsory levy on all those not rich enough or smart enough to devise a way of avoiding it. Their closeness to the likes of Lord Ashcroft and Sir Philip Green doesn't do much to challenge this view, nor does the news from the latest Private Eye of the appointment to the coalition's "Efficiency and Reform Group" of Lucy Neville-Rolfe, Tesco's executive director for corporate and legal affairs, who will doubtless bring to the Group's task of tackling Britain's massive public deficit the experience she has had in ensuring Tesco's just and equitable contribution to the UK's tax take.

Rescomania

Tax avoidance is perfectly legitimate and to conflate it with the illegal practice of tax evasion is simply duplicitous and underhand.

Tax avoidance results in any practitioner paying their fair share - no one should be *forced* to pay more than they have to.

Edward McLaughlin

The avoidance/evasion distinction, as pointed out in comments above: is it Alexander's gaffe or has he been quoted inaccurately?

Well anyway, surely there is a case for making it more difficult to avoid tax legally, by changing the laws so that the area available in which to legally avoid, is made smaller?

Cassandra

Questions for Danny Alexander (Chief Secretary to
the Treasury):

*1.* Are there to be any legislative changes as part of the "major
clampdown"? For example, to close particular loopholes or to "tighten up"
appropriate parts of the system. Or is this clampdown simply the
announcement of additional expenditure?

*2.* Is there any ongoing policy work being undertaken by HMRC looking at
improvements in the efficiency and fairness of the tax system? If so, what
is the nature of this work and are there plans to release details to the
public? If not, why not?

*3.* How much is it estimated each of the new measures outlined today will
raise in each year of this parliament and the next parliament? How have
each of these figures been arrived at and have they (or will they) be
assessed by the Office for Government Responsibility.

*4.* How was the budget for the $900 million extra expenditure determined?
For example if the amount dedicated to collection of tax was doubled what
increase could be expected in recoveries?

Simon Stephenson

Rescomania : 3.48pm

"Tax avoidance results in any practitioner paying their fair share - no one should be *forced* to pay more than they have to."

Not true. The sort of tax avoidance that involves immediate pre-year end capital expenditure, or lumpsum pension contributions is not what is at issue. What is being attacked is the sophisticated manipulation of the limitations of words in order to divide the letter of the law from the spirit of the law. This leads to users paying less than their fair share.

As it happens, I think it's impossible to make much progress on this front as long as we continue to limit our focus to the recipients. What would narrow the mesh would be if we look as well at the tax-deductability of the payments, so that a payment is disqualified from being tax-deductable unless it can be shown that the receipt is tax-chargeable in a country with an approved tax-regime - i.e. not a tax haven.

But of course this would prove awkward for tax-avoiders, so it won't happen in any country where they're able to mount an effective lobby against it.

CityBoy

Simon Stephenson - It is for the authorities to publish a clear tax code which sets out what is and what is not permitted. Citizens should not be required to divine what is and what is not the "spirit" of the law. It is simply too uncertain a concept.

Short of banning foreign remittances, little progress can be made here, if "progress" is in any case thought desirable.

Holly ......

Question for all those who believe the rich are the only sector who avoid tax?
Who are the people up and down this country selling import tobacco/fake goods,so robbing
the treasury of taxes?
Probably NOT the lord Ashcrofts of the world.
ALL income brackets avoid/dodge paying tax in some form or another.
None of it being evil.
How will our poor,starving people get by without this benefit booster?
Clampdown on one sector with my blessing,
but don't forget the other whilst your at it.

AndyLeeds

CityBoy is quite right. We need a simple and clear tax code. All that idiot Gordon Brown did was double an already complicated code to one which is now so complex no one even understands it. And added to which he reformed the revenue so it no longer works properly. The Government needs to simplify the tax code and indeed the system of taxation in this country.

benji

I think the reason for so much tax avoidance and evasion boils down to incentives. These people are not just motivated by greed, but by a sense that their money is being wasted by politicians on expenditure they don't agree with. I propose a charity tax cashback scheme where tax payers earning over £100,000 would receive a 50% rebate paid to the charity of their choice at the end of the financial year. This, I believe, would not only provide a net gain, over time, to HMRC, but also help with the coalitions idea of a Big Society.

Rescomania

Simon Stephenson "Not true. The sort of tax avoidance that involves immediate pre-year end capital expenditure, or lump sum pension contributions is not what is at issue. What is being attacked is the sophisticated manipulation of the limitations of words in order to divide the letter of the law from the spirit of the law. This leads to users paying less than their fair share. "

You're assuming that that law in this regard is legitimate and 'fair' (whatever that means to whoever is reading it). One has no choice but to hand over money that one has earned to the state (i.e. it is taken through coercion if one refuses to pay). There are moral arguments for and against paying taxes but it remains that tax avoidance is the only way one can limit the state taking one's money without the threat of coercion.

Commentator

Simon Stephenson's comments strike me as naive. The UK now has a massively long and complex tax code which has grown enormously since 1997, along with the tax burden. Furthermore, its interpretation and administration by HMRC are often highly uncertain, not least because HMRC are quite ready to take aggressive positions at odds with the law which only the very well off can afford to defend through the courts. In a word, the UK's tax system is highly uncompetitive and this kind of development will only make it more so. That may be great news for tax advisers. However, it is not going to encourage people to invest in the UK if they are exposed to shakedowns of the kind proposed.

maddy1

We could make a good start by looking at all MP's affairs since 1985, the law as it applies to everybody else. I am convinced there are rich pickings to be had from the Westminster Tax Haven. The would not dare talk to the Greeks like this!

oldtimer

Mr Alexander continued to conflate tax evasion with tax avoidance in an interview on BBC Breakfast this morning. So we should conclude that this conflation is intentional, not accidental.

As others have already pointed out, there is a clear difference between the two, well tested in the law courts. The question then is this. Does he mean what he says? Or is it just words for his party faithful?

It is also obvious, as others have already pointed out, that the primary source of the problem is the high level and mind boggling complexity of the tax legislation that now burdens the UK. The solution is obvious - reduce the burden and complexity of taxation and the tax code. Now that it is clear that the LibDems can be relied on not to pursue this course, we await - without hope I must now confess - to hear if the Conservative party intends to do so. If not, then the UK truly is beyond redemption.

Jannie Geldenhuys

There is a grey area between tax evasion and tax avoidance.

There is no doubt that there are avoidance schemes being peddled that are thoroughly abusive. However it is also true that many of these schemes result from hyperactive but incompetent legislative drafting.

I don't believe for one moment that Alexander is talking about 'legitimate' tax avoidance (ISAs, pension contribs etc). He is talking about things like manufactured overseas dividends.

I have no particular qualms about Osborne and Alexander setting HRMC's dogs on non-dom leeches in Kensington and Chelsea and the like. That they don't pay their fair share hurts the rest of us because we have to make up the difference.

Commentator

Before they get anywhere near Kensington and Chelsea, they should cross the road and deal with the tax dodgers and fiddlers in SW1A 0AA whose well-rehearsed excuse is "I was acting within the rules....."

TigerDonald2000

I trust that Danny Alexander is making some attempt to reduce the deficit of £128BN in avoided and evaded taxes. These can be anything from undisclosed sales to the black economy through to VAT fiddles. If he is spending £900M to get £5BN by 2015, he just will not do it and it is a forelorn hope that he will do it. For a start he will need to completely restructure the Revenue again and make the tax officer the focus of assessing; he will need to make the allocations smaller and he will need to localise NOT centralise the service. Whether he has the understanding to do this, heaven only knows. They need to start asking those of us who have been in the Revenue and who are now qualified what they need to do. The announcement is a good start but it is a mere glimmer of light, not a full illumination of this subject. If I dont miss my guess I would say that he is clutching at soundbites rather than making any attempt to do the job that so badly requires doing.