Opinion  

Misled members pay for their own misfortune

Tony Hazell

Tony Hazell

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Don’t shoot the messenger

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Aggressive tax avoidance by large companies and extremely wealthy individuals is one of the less savoury aspects of capitalism. While ordinary householders must cough up their taxes, the super-rich and multinationals often seem to get away with it.

Charlie Elphicke, MP for Dover and a former tax lawyer, is arguing that it is time to crack down on advisers who devise and promote these tax avoidance schemes. He has tabled amendments to the Finance Bill that would make it illegal to help clients invest in such schemes.

These developments send shivers of fear down my spine. As Mr Elphicke well knows, tax avoidance is legal, tax evasion is illegal. We all seek to avoid tax to some degree, even if it is just contributing to a pension or Isa.

What would Mr Elphicke do next? Make it illegal for a solicitor to represent people in tax cases?

I do not approve of the super-rich making aggressive attempts to avoid tax, but I approve even less of attempts to create laws that could result in prosecutions of those undertaking what should be legal activities.

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Insurers on the give and take

You know that feeling when you see something and think: “Well, that’s a decent idea, but what’s the agenda here?”

This was my reaction to Friends Life’s suggestion for tax incentives to pay for long-term care.

The basic premise that people should be able to pay long-term care premiums out of pension funds directly and without tax being taken from that pension income is a sound one.

But the questions are how much bigger would the premiums be – and will such policies be viable or even necessary for most people?

I cannot help feeling that just as people are about to get their hands on their pension money, the insurance industry is already devising ways to take it back.