Tax avoidance and evasion

In the UK, tax avoidance is not illegal, but tax evasion is.
A mate of mine sponsors our town rugby club and because it is advertising it is a company expense which can be written off by Her Majesties Revenue and customs lol.
I'm going to do a job for him which won't cost much but I'll invoice much higher so we split the difference and share the love instead of paying tax to HMRC. Work will have been done but not counted in the same way.
Is that ethically wrong?

a reply to: CornishCeltGuy

people whine that they are being spied on - yet churn out an unending litany of thier own malfeaseance

a reply to: CornishCeltGuy

Sounds like ethically yes, but legally no.

And when I say ethically yes, I don't mean that I (and I would be willing to bet most others) wouldn't do it. I just mean that it is not 100% honest and transparent. As long as you can live with it - it sounds like your law can too

a reply to: CornishCeltGuy

Sounds like tax evasion to me.

Tax avoidance is me paying as many company bills as possible by December 31st in order to lower my taxable income to as close to 0 as possible.

originally posted by: CornishCeltGuy
In the UK, tax avoidance is not illegal, but tax evasion is.
A mate of mine sponsors our town rugby club and because it is advertising it is a company expense which can be written off by Her Majesties Revenue and customs lol.
I'm going to do a job for him which won't cost much but I'll invoice much higher so we split the difference and share the love instead of paying tax to HMRC. Work will have been done but not counted in the same way.
Is that ethically wrong?

Tax avoidance.... taking legal deductions and other maneuvers to minimize tax burden. Anyone, no matter their income, has engaged in tax avoidance if they claim any kind of deduction or credits. Only suckers pay more tax than legally necessary.

Tax evasion.... not paying taxed owed. For example, accepting cash so that tracking of income receipts is less certain.

The OP is engaging in fraud by invoicing a higher amount for the job than what it actually costs tax purposes...

Ah taxes...

Everyone hates paying taxes and goes above and beyond to avoid paying them but then get pissed when some rich guy avoid paying his.

originally posted by: CornishCeltGuy

I'm going to do a job for him which won't cost much but I'll invoice much higher so we split the difference and share the love instead of paying tax to HMRC. Work will have been done but not counted in the same way. Is that ethically wrong?

Nothing wrong with tax avoidance. But I'm not sure that's what you are describing. Let's do a little word substitution game and see if I have this right. I may be misunderstanding. Your friend (a government employee) is suggesting that you (a contractor) overbill the government, which will pay an inflated invoice to you. Then you kick back a part of the proceeds to the government employee. Is that what is happening here?

originally posted by: CornishCeltGuy
Is that ethically wrong?

Unethical? For me that would mean someone (an individual) was being screwed over or "food" being taken from someone else's mouth - so to speak, metaphorically as it were, so much depends what one's ethical stand is. It is though definately tax evasion, so not an ethical question so much as a legal one (and never the twain shall meet in my experience).

I am assuming that the fiddle involves over charging for materials and under for labour, otherwise it doesn't make much sense. Lots of cash in hand work still goes on, sadly I think though that it is very seldom those that need such work get it, which is where it becomes unethical. Helping out a mate in straits, is not the same as helping a mate line his pockets at the expense of those who need.

originally posted by: schuyler

originally posted by: CornishCeltGuy

I'm going to do a job for him which won't cost much but I'll invoice much higher so we split the difference and share the love instead of paying tax to HMRC. Work will have been done but not counted in the same way. Is that ethically wrong?

Nothing wrong with tax avoidance. But I'm not sure that's what you are describing. Let's do a little word substitution game and see if I have this right. I may be misunderstanding. Your friend (a government employee) is suggesting that you (a contractor) overbill the government, which will pay an inflated invoice to you. Then you kick back a part of the proceeds to the government employee. Is that what is happening here?

A hardware store owner in my community got in trouble for doing exactly what you are describing. He had a contract with city of Chicago. He'd invoice higher and split the difference... He lucked out and avoided jail time though.

I don't think it's wrong ethically or wrong morally, Though I don't live in a monarchy either. Its up to your personal conscious. Do you think you owe the queen anything? Imo, all personal income taxes should be voluntary through lotteries & only corporations should be taxed in a traditional manner. I haven't filled taxes for 10 years now and nothing bad has happened to me yet. In the U.S. taxes are constitutionally voluntary and there is no constitutional law requiring one to file taxes.

a reply to: CornishCeltGuy

What does your conscience tell you? LOL sorry

I doubt the difference in the tax on the actual cost of the job and the inflated cost for tax purposes would be enough to sponsor yet another royal baby so I wouldnt sweat it.

a reply to: CornishCeltGuy

I am not the brightest bulb when it comes to taxes, etc. But... I think it would be wrong because eventually you do end up paying in higher fees somewhere else. If there are no cameras and the cashier isn't looking you take two chocolate bars instead of the free one chocolate bar it is wrong. I guess that's the only comparison I can come up with seeing as how I just crawled out of bed and am still working on my first sip of tea this morning.

Really, I am not sure but this is what I would tell my child. Said with all respect.

a reply to: JBIZZ

You state is more likely to come after you before the feds.
Do you have taxes deducted from your pay?
If so you may have a small fortune socked away waiting for you to claim in the way of refunds.
Or if you are self employed then I guess your safe.
unless you have expenses you cant account for.
If you're avoiding paying taxes they will catch up with you eventually.
GOOD LUCK.

a reply to: CornishCeltGuy
Yes, it is totally unethical, completely wrong.
Can I have a cut?

a reply to: CornishCeltGuy

sure if there was some grand supreme ethics book this situation would be penciled in as a no no.

i would do the same though. so would most people so dont pay attention when the high and mighty's come in talking #.

like buying or selling a car. not sure how it is where you are but if i buy a car for 5 grand i have to pay taxes on 5 grand.
so when i buy a car i ask the seller to put $100 on the title or something so i only pay taxes on $100.

i do the same when i sell cars.


just one of those things.

why do it?

cause # them thats why

You're making up the figures. How could it possibly be ethical? You're skimming public funds.

To echo an above poster, the rich are scum when they do it. What makes it okay for you?

Ethically wrong? Well, I suppose the rich do it all the time and supposedly they are not Ethically wrong since it is legal. Remember, lawyers influence the making of laws and the legal system is controlled by people of money.

So, do you feel like a rich society person now that you are doing things like the rich society people?

Here in America you can claim a lot of deductions but it takes a lot of correct paper keeping, it also sometimes triggers an audit, so make sure everything everywhere is correct before taking some of the deductions since it can lead to discovery of something not correct and you get penalized because something else is not right. Having a business for many years, I utilized deductions and kept real good records in case I got audited. I also did not take some iffy deductions at the advice of my accountant even though I could because it increased audit risk. He told me that since I worked along with the workers that the money I could use in the two day audit was way more than I would save by taking the deduction, and the workers would also lose wages since they would be off. I decided not to take those little deductions that would only save me a few hundred bucks and required extra forms which also cost maybe five to ten bucks each for accountant charges to file with my taxes.

The biggest mistake we made was winning a thousand bucks in the lotto one year, that and our stock dividends and intrest went over a certain amount and we lost the child care deduction which was over three grand. Sucked, the win made us lose money.

a reply to: Sillyolme

My state has no income tax. I do pay federal income tax deducted from my paycheck & I pay property taxes. I just don't file federal personal income tax. Last time I tried to file I was unable to so I stopped filing. Even if I did file and recieved a return it would just go to the repayment of student loans which I was overcharged on. I could hire lawyers to help figure out my situtation but I'd be poor after paying the lawyers. I'd rather go to prison then give them a dime.

OP has not been back to explain, but I'm thinking this is not so much about tax avoidance or tax evasion, but about kickbacks on a project. The way OP explained it was that he would inflate an invoice and kick back part of the resulting funds to the originator.

That's not evasion. It's fraud. If a politician was caught doing that we'd all, every one of us, be decrying "corruption" and calling for their heads. But the little guy does it and that's OK. Double standard much?

originally posted by: Bluntone22
Ah taxes...

Everyone hates paying taxes and goes above and beyond to avoid paying them but then get pissed when some rich guy avoid paying his.

Everyone always votes for more of them too, and then calls anyone who whines evil and greedy while they do everything they can to not pay the tax they just voted for.