EU takes action against Malta, Greece and Cyprus on VAT

[BruceK]

:encouragement: We are then in complete accordance. You cannot discuss a political debate and have a clear winner. At best you can exchange viewpoints

 

[sorabain]

:encouragement: We are then in complete accordance. You cannot discuss a political debate and have a clear winner. At best you can exchange viewpoints

To be pedantical i'd say merely "unlikely" to have a clear winner, and then only if it's a debate around fairly mainstream politics from multiple viewpoints. You can still have a "clear winner" (taking clear winner to mean a significant majority agree with one side) even mainstream, and much easier if you're debating mainstream vs some extreme. It's more than "exchanging viewpoints" when you're discussing the politics of North Korea.

 

[petem]

I must say that I disagree with Deleted User's post above. Yep, building boats provides jobs, etc but it's for governments to decide the industries that they want to give tax breaks for, not individuals. Imagine if VAT was reduced for luxury cars, there would be outrage!

Do I think it's morally correct to use these Maltese or whatever leasing schemes to avoid VAT? No! But there again, do I think it's morally correct to fill my boat with 60/40 despite knowing that little or no fuel will be used for heating? Of course I do! Is there much difference, apart from scale between the two? No.

But at the end of the day, it's down to the authorities to give direction and to legislate on what is proper. HMRC / RYA have certainly given the impression that it's acceptable for people to declare 60/40 in all cases and HMRC of the Govt have made this possible.

So if the EU or whoever else doesn't like these leasing schemes then they should prohibit them. They can't and shouldn't expect people to rely on their moral compasses alone.

 

[Deleted User YDKXO]

I wish people would stop wriggling out of paying their tax what ever form it takes. This just increases the Burden on others. It is usually the rich that try not to pay and the poor that pick up the bill. People need a better moral compass in my view

I know this is straying into Lounge territory but I just can't let that one go. The top 1% of earners in the UK currently pay nearly 30% of the total income tax take, nearly 50% of the population pay no income tax at all and over 50% of households do not pay enough tax in total to cover the benefits and services they receive from the state. The idea that the poor are picking up the bill for the rich who do not pay their fair share of tax is just bullshit. And there is no such thing as a moral compass when it comes to paying tax or for that matter, any concept of fair share of tax. The only concept that matters is paying the tax that is due under the law and if you have an issue with how some people use the tax law to mitigate their tax liability, then you should take that up with the politicians who make the law.

 

[Blue Sunray]

I know this is straying into Lounge territory but I just can't let that one go. The top 1% of earners in the UK currently pay nearly 30% of the total income tax take, nearly 50% of the population pay no income tax at all and over 50% of households do not pay enough tax in total to cover the benefits and services they receive from the state. The idea that the poor are picking up the bill for the rich who do not pay their fair share of tax is just bullshit. And there is no such thing as a moral compass when it comes to paying tax or for that matter, any concept of fair share of tax. The only concept that matters is paying the tax that is due under the law and if you have an issue with how some people use the tax law to mitigate their tax liability, then you should take that up with the politicians who make the law.

+1

 

[sorabain]

I know this is straying into Lounge territory but I just can't let that one go. The top 1% of earners in the UK currently pay nearly 30% of the total income tax take, nearly 50% of the population pay no income tax at all and over 50% of households do not pay enough tax in total to cover the benefits and services they receive from the state. The idea that the poor are picking up the bill for the rich who do not pay their fair share of tax is just bullshit. And there is no such thing as a moral compass when it comes to paying tax or for that matter, any concept of fair share of tax. The only concept that matters is paying the tax that is due under the law and if you have an issue with how some people use the tax law to mitigate their tax liability, then you should take that up with the politicians who make the law.

To be fair this started off about VAT rather than income tax. Govt receipts from VAT are comparable to that of income tax and "poor people" do end up paying that when they consume. Personally i prefer tax on consumption to tax on income, as long as there are exemptions to avoid it being regressive. I think avoiding VAT on luxury items isn't in the right spirit of things.

I don't agree that the poorest pick up the (whole) tab for any tax games played by the very rich, but would say that the "less well off" (which includes the moderately rich) do end up in the government's sights: those people who are doing well, but unable to leave the country due to dependence on well-paid employment not necessarily available elsewhere are more easily milked than those who have "foreign incomes" that can shop around. I can see the motivation for a country to try and attract the latter (it's an increment in gains compared to them being somewhere else and getting 0), but it doesn't seem fair, and in the cases where we're talking about corporations rather than individuals I feel particularly sorry for the "small company" who pays more tax than the "global" one and gets priced out.

 

[Zing]

I know this is straying into Lounge territory but I just can't let that one go. The top 1% of earners in the UK currently pay nearly 30% of the total income tax take, nearly 50% of the population pay no income tax at all and over 50% of households do not pay enough tax in total to cover the benefits and services they receive from the state. The idea that the poor are picking up the bill for the rich who do not pay their fair share of tax is just bullshit. And there is no such thing as a moral compass when it comes to paying tax or for that matter, any concept of fair share of tax. The only concept that matters is paying the tax that is due under the law and if you have an issue with how some people use the tax law to mitigate their tax liability, then you should take that up with the politicians who make the law.

It's actually worse than this for the beleaguered high rate tax payers. You need to look at what the state does for him too. By way of example, my pal is very successful and earns around 20 times the national average income. For his pleasure he pays about 40 times the taxes that the average guy pays. What does he get for this? The state pays for education and for health and for income insurance in the form of the welfare system. He has not benefited from any of this. Kids educated privately, private health and no prospect of getting any welfare payments ever, nor anything but a few crumbs of state pension in his old age. Those state benefits represent 75% roughly of the state's expenditure. He gets nothing out of it.

The bottom line is he pays 40 times more than the average guy, and gets back from the state a quarter of what the average guy gets, so his tax to benefits ratio is four times worse than the average guy, that's 160 times the tax cost for every pound he gets back from the state. It's of course off the scale compared to the low income earner. I hope he takes every tax break he can. He is being screwed and predated on by the blood sucking masses and deserves every penny he can legally save.

 

[sorabain]

It's actually worse than this for the beleaguered high rate tax payers. You need to look at what the state does for him too. By way of example, my pal is very successful and earns around 20 times the national average income. For his pleasure he pays about 40 times the taxes that the average guy pays. What does he get for this? The state pays for education and for health and for income insurance in the form of the welfare system. He has not benefited from any of this. Kids educated privately, private health and no prospect of getting any welfare payments ever, nor anything but a few crumbs of state pension in his old age. Those state benefits represent 75% roughly of the state's expenditure. He gets nothing out of it.

The bottom line is he pays 40 times more than the average guy, and gets back from the state a quarter of what the average guy gets, so his tax to benefits ratio is four times worse than the average guy, that's 160 times the tax cost for every pound he gets back from the state. It's of course off the scale compared to the low income earner. I hope he takes every tax break he can. He is being screwed and predated on by the blood sucking masses and deserves every penny he can legally save.

sounds like the "my friend..." often used when talking to psychologists, but I can relate to the above. I feel stiffed by private pension clampdown where I now cannot (sensibly) put in more than 10k a year, but i spent a long time in education so lag behind far what I should have put in at this point. I felt like they'd already dealt with this problem with the lifetime allowance of £1m, but now there's now way i can get anywhere near that lifetime allowance without being somewhat irrational (there are better more liquid places to put the money rather than locking it into a pension if i get no tax benefit from it)

 

[Portofino]

I know this is straying into Lounge territory but I just can't let that one go. The top 1% of earners in the UK currently pay nearly 30% of the total income tax take, nearly 50% of the population pay no income tax at all and over 50% of households do not pay enough tax in total to cover the benefits and services they receive from the state. The idea that the poor are picking up the bill for the rich who do not pay their fair share of tax is just bullshit. And there is no such thing as a moral compass when it comes to paying tax or for that matter, any concept of fair share of tax. The only concept that matters is paying the tax that is due under the law and if you have an issue with how some people use the tax law to mitigate their tax liability, then you should take that up with the politicians who make the law.

We'll said Deleted User and JFM in post # 12 which I thought covered the issue .

You don t have to be a Hitler fan to discuss the Holocaust.

Just thought when we are fully out of the EU regarding "tax" - for those that don't know the EU re boats that's VAT in UK speak -what changes of the landscape may happen to increase any scope if any ? For VAT mitigation

@Bigplums -remember if you buy a new EU boat say a Ferretti group product -any none payment of Italian VAT is not gonna effect anybody in the UK .
How does that increase the "tax bourdon on the UK lefty or any version , of these poor " back home ?

Do tell ps

Can't see me part ex ing my moral compass anytime soon .

 

[julians]

Sorabain - what pension clampdown are you referring to that effectively limits you to 10k per year contribs?

 

[sorabain]

Sorabain - what pension clampdown are you referring to that effectively limits you to 10k per year contribs?

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm057100

General
From 6 April 2016, individuals with income for a tax year above £150,000 have their annual allowance for that tax year reduced on a tapered basis (a ‘reduced annual allowance’).

The annual allowance is reduced by £1 for every £2 of income above £150,000, subject to a minimum reduced annual allowance of £10,000.

Where the reduction would otherwise take an individual’s tapered annual allowance below £10,000 for the tax year, their reduced annual allowance for that year is set at £10,000.

 

[n.herring]

I wish people would stop wriggling out of paying their tax what ever form it takes. This just increases the Burden on others. It is usually the rich that try not to pay and the poor that pick up the bill. People need a better moral compass in my view

I don't think it's only the rich that don't like to pay, there is a massive cash economy out there, no vat no income tax and probably no bank account, all totally hidden from HMRC, the wealthy can't hide.

 

[Nigelpickin]

I must say that I disagree with Deleted User's post above. Yep, building boats provides jobs, etc but it's for governments to decide the industries that they want to give tax breaks for, not individuals. Imagine if VAT was reduced for luxury cars, there would be outrage!

Do I think it's morally correct to use these Maltese or whatever leasing schemes to avoid VAT? No! But there again, do I think it's morally correct to fill my boat with 60/40 despite knowing that little or no fuel will be used for heating? Of course I do! Is there much difference, apart from scale between the two? No.

But at the end of the day, it's down to the authorities to give direction and to legislate on what is proper. HMRC / RYA have certainly given the impression that it's acceptable for people to declare 60/40 in all cases and HMRC of the Govt have made this possible.

So if the EU or whoever else doesn't like these leasing schemes then they should prohibit them. They can't and shouldn't expect people to rely on their moral compasses alone.

+ 1 - pretty much how I feel. I’ve always felt conflicted when buying new boats; avoiding VAT by means of business tx or geography are always brought up, but we’ve always decided against.

With our most recent boat, and bearing in mind it’s not even going to be in the EU for most of its first 5 years; we could have had it delivered to Giralta, (around the corner from us), sailed it to Las Palmas in the early summer and avoided VAT until we re patriared in the EU in 5 or 6 years from now. Trouble with that was that the minute we take the boat for a quick spin in the med we’d be breaking the rules and it would be wrong, regardless of how many other people do it. So we paid Portuguese IVA at 23% - we could have paid French or Spanish or even U.K. at a push, but we live in Portugal now and enjoy using the roads, hospitals and being welcomed by the many friends that we have made. It would feel wrong to try and dodge a bit of tax even if the system allows it for our situation.

When we return in 5 years the boat will be sold inc VAT and we will be easier to sell because of that, but that’s a side bar.

Re Portifinos comment, it’s such a small minded view if you can’t see how wealthy folk avoiding tax in one EU nation does not affect another then fine, you’re probably never going to see things my way but the burden on the less wealthy / less fortunate is not just financial, it’s a hammer blow for someone on minimum wage to learn that these kinds of things go on, it creates resent, causes disillusionment and undermines our democracy by creating a meritocracy - it’s Big governments responsibility to make sure this does not happen and I hope that they achieve it by making it impossible to avoid VAT on luxury items regardless of how they are owned or whether they do a couple of days charter a year.

 

[Zing]

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm057100

General
From 6 April 2016, individuals with income for a tax year above £150,000 have their annual allowance for that tax year reduced on a tapered basis (a ‘reduced annual allowance’).

The annual allowance is reduced by £1 for every £2 of income above £150,000, subject to a minimum reduced annual allowance of £10,000.

Where the reduction would otherwise take an individual’s tapered annual allowance below £10,000 for the tax year, their reduced annual allowance for that year is set at £10,000.

More stealth taxes. Pension funds have been pecked away at relentlessly. I thought it was just Gordon Brown who invented stealth taxes, but the current lot are at it too. A dishonest way to raise tax and by moving the goal posts all the time they continually wreck long established plans. Very frustrating.

You can mitigate this a little bit with the new ISA limits of £20k each pa. It is taxed income going in unfortunately. But you need to save somehow unless you want to live of state benefits and it is tax efficient once it's in.

 

[Portofino]

Retires are not taxed on pensionable income -in Portugual
Is that correct Nigel ?

Otherwise why live there ?

You could have retained a Uk base - and helped our " poor " but choose not to
People in glass houses ----/

Nice one Nigelpicken
I lwill think about you when I walk past the next homeless person in Britain

https://www.telegraph.co.uk/finance/personalfinance/special-reports/11519095/The-ultimate-pension-freedom-Retire-in-Portugal-and-reduce-your-tax.html

 

[Nigelpickin]

Retires are not taxed on pensionable income -in Portugual
Is that correct Nigel ?

Otherwise why live there ?
.
You could have retained a Uk base - and helped our " poor " but choose not to

I’m trying to think of a way to deal with your comment politely - count to ten, take a deep breath, don’t upset the mods.


All of my income is U.K. based Portifino, last year we paid over £500k to HMRC and we will continue to pay our tax in the U.K.

We chose to leave the U.K. because of the climate and because we are very much at odds with not living in the EU. We also find the people here to be charming and welcoming.

Most of our expenditure is in Portugal so we feel that we are behaving in a decent way and we create no financial burden on the Portuguese health system as we pay privately.

We take no part in the golden Visa program, that’s a conciensious decision and an expensive one - of course none of your business but you seem to have lept pretty high and with your eyes wide shut!

I have enjoyed living in the U.K. for 50 years, I’ve served for my country and I continue to feel a duty of care toward the system that allowed for our good fortune and success, I hope that all makes sense.

 

[Portofino]

Re Portifinos comment, it’s such a small minded view if you can’t see how wealthy folk avoiding tax in one EU nation does not affect another then fine, .

That's not my Q
You missed the point

We will be out of the EU eventually
Like say an American citizen .

So run it by be
How will not paying Italian VAT in the EU effect UK " poor " ?

Think of a background of " punishment " and that type of language currently banded about in Brussels

 

[Deleted User YDKXO]

I'm beginning to wish I hadnt started this thread

 

[MapisM]

The only concept that matters is paying the tax that is due under the law and if you have an issue with how some people use the tax law to mitigate their tax liability, then you should take that up with the politicians who make the law.

Can't argue with that from a legal standpoint, M.
But I can't help noticing that what you are saying is precisely my previous point, just with different wording...:

there are almost always ways for FB and the likes (I mean, legal-ish ways, not the straight evasion of old) to avoid paying the boat VAT, or just about any other tax. It's just a matter of cost comparison between the tax potentially avoided and the cost of putting in place whatever it takes to do it legally enough.
Now, if this doesn't qualify as a sick distortion, I don't know what else does.

Mind, I don't disagree that the politicians are to blame - nobody would, I guess.
But at the end of the day, the politicians we have are the ones we deserve, I reckon.

Back to the initial point of this thread, a system that allows big boat owners to get away with VAT payment (and use tax free fuel, etc.), while folks who can only afford a 20 footer have no practical way to avoid paying the lot, is an OBJECTIVELY unfair system, and you don't need to be Mother Teresa of Calcutta to recognize that. Saying that the issue should be taken up with the politicians who make the law reminds me of the old expression "Excusatio non petita, accusatio manifesta"...

 

[sorabain]

This is all getting a bit "tu quoque"