I can’t imagine many have escaped the effects of the recession and even fewer, if any, will have by the time its packed its bags and cleared off. This is to say that no one is enjoying it and we’d all rather it went away.
However, I can’t help but wonder if this mini era that we are living through, which will no doubt be studied retrospectively and be agreed to be a defining moment in many ways, won’t also come to define an uglier than normal period in the life of our popular press.
There is something Orwellian about the daily Two Minutes of Hate that we must all join in with at the moment and I wonder how many that are currently happy to point their finger will deny doing so if and when we return to something that many think of as normality?
The general (and ironically, entirely understandable) misgivings that the public had about Bankers since what now seems like the heady days of ‘The Credit Crunch’ gave way to a more acute sense of being peeved about the more specific group of Investment Bankers. Whilst, since then, the compass needle has swung this way and that, pointing at everyone from Gordon Brown to Sir Philip Green to Philip Hampton, more recently the media has been keen to target firstly other groups based it seems on their (at best) potential earnings, to, even more recently, specific and non political celebrities such as Jimmy Carr. Suitable Guys for the fire are hardly in short supply at the moment.
Don’t get me wrong, I’m not particularly a Jimmy Carr fan, I’m basically neutral and spend zero amount of my time thinking about him. The point is that after getting all frothed up about Doctors a short while ago (I mean how dare someone earn a good wage after a minimum of 10 years training and a requirement to give themselves almost utterly to their vocation – the cheek of it!) we are now being encouraged to despise anyone who is reasonably well heeled, especially if they are seen to be avoiding tax.
Hang on a minute, how exactly do you do that? I find it staggering and quite alarming that our so say impartial press is using language like ‘legal tax avoidance’ in its reporting of these types of topical news stories. Surely that’s an oxymoron isn’t it?
Depending on the circumstances involved; tax is either due, or it isn’t due. If it’s due and you don’t pay it, that’s hardly legal. However, if it’s not due and you therefore don’t pay it, how can you been seen to be avoiding it? The very term makes no sense; you cannot legally avoid tax, you can only arrange your affairs in such a way as to mitigate your tax liabilities.
Therein I suspect lies the rub. It seems that as a society we are entirely comfortable with a Self Employed window cleaner (just to pick an example) taking the advice of their book keeper and off setting all possible business costs against tax. What is patently unacceptable if I am gauging the current temperature correctly though, is for the same approach to be adopted by someone that has the nerve to be relatively wealthy during a recession.
So who gets to draw the line and where does it get drawn?
We need to take a step back and try, amidst the emotive turmoil of this bone grinding recession to gain some objectivity here. No one wants to see people using their position to ensure they don’t pay their share of tax, but if it’s ok for one person to be prudent and not voluntarily surrender more of their hard earned money to the Treasury than they need to, then it’s ok for another to do so as well.
Whilst there might be increasing attention from the media and HMRC being paid to ‘tax avoidance schemes’, it’s reassuring to know that things have got quite bonkers enough to start looking at Pension Schemes which must surely, now more than ever, be the best place to manage your affairs ‘tax effectively’.
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Jon Tibbs, JT Associates
PSG Technical Consultancy
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