I wonder what percentage of people on here have benefited from tax evasion. Most cash based trades people I know fiddle it.
Can't argue with that.
I use 'salary sacrifice' to put gross salary into my pension, saves on both tax and NI and is totally legal.
It's still evasion.
Salary sacrifice is not tax evasion, the scheme is legal and endorsed by the government and HMRC so that make it tax avoidance which is legal.
There are lots of schemes out there which benefit from salary sacrifice such as child care vouchers for working parents, the ride to work scheme that helps you buy a bike and so on. All perfectly legal and the assistance you get helps you to "avoid" paying tax.
It's not just the authorities turning a blind eye to tax evasion/aggressive avoidance versus benefit fraud though. I can't link to the original piece due to the paywall in The Times but they recently did a piece on the prevalence of insider trading, the effects on the wider economy and the disparity in resouces thrown at the two types of crime.
The FCA prosecuted just 8(?) cases of insider trading in the last 5 years. The DWP prosecuted 10,000(?) cases of benefit fraud last year. Yes, they're different crimes and yes one's more complicated than the other but it's also a political reflection of the attitude to fraud and the resources thrown at it. From memory again I think there were 4000 investigators looking at benefit fraud and just 65 looking at insider trading. Yet the Times piece found unusual price movements in around 2/3rds of cases where a profit warning was issued the following day. That ain't any coincidence is it!
Was an interesting article, maybe someone could confirm the figures as mine are from memory?
There is a (sort of triage) unit at the FCA that looks specifically at not just price movements but more specifically at actual trades. They have ready access to these data. And can see anything suspicious.
But, as you suggest, it's really tricky. I once investigated what looked on the surface to be a cast iron case of insider trading. The individual concerned used to work for the firm, lived locally, had friends at the business and sold shares a few days before a (marginally) adverse RNS. The snag, it was a mere coincidence. He had no insider knowledge, hadn't contacted anyone who might have had access to the info, and could demonstrate that the shares had been sold to finance a deposit on a house he had bought thus giving a legitimate reason for the sale. (He had also sold shares in other companies on the same day it transpired.) But it takes enormous effort to test all these data, phones' records, emails, meetings, etc, etc. Easy it ain't. But it seems that some more resources are going into it these days, according to this article. https://bloomberg.com/news/articles/2017-12-21/u-k-insider-trading-investigations-set-record-as-fca-cleans-up The article also says 30 convictions since 2009. Still not huge I agree but I'd say there are less incidents than people assume. The sensible professionals know there's a strong chance they'll get investigated (if not convicted) and wouldn't take the risk of losing their very lucrative jobs.
It's not just the authorities turning a blind eye to tax evasion/aggressive avoidance versus benefit fraud though. I can't link to the original piece due to the paywall in The Times but they recently did a piece on the prevalence of insider trading, the effects on the wider economy and the disparity in resouces thrown at the two types of crime.
The FCA prosecuted just 8(?) cases of insider trading in the last 5 years. The DWP prosecuted 10,000(?) cases of benefit fraud last year. Yes, they're different crimes and yes one's more complicated than the other but it's also a political reflection of the attitude to fraud and the resources thrown at it. From memory again I think there were 4000 investigators looking at benefit fraud and just 65 looking at insider trading. Yet the Times piece found unusual price movements in around 2/3rds of cases where a profit warning was issued the following day. That ain't any coincidence is it!
Was an interesting article, maybe someone could confirm the figures as mine are from memory?
There is a (sort of triage) unit at the FCA that looks specifically at not just price movements but more specifically at actual trades. They have ready access to these data. And can see anything suspicious.
But, as you suggest, it's really tricky. I once investigated what looked on the surface to be a cast iron case of insider trading. The individual concerned used to work for the firm, lived locally, had friends at the business and sold shares a few days before a (marginally) adverse RNS. The snag, it was a mere coincidence. He had no insider knowledge, hadn't contacted anyone who might have had access to the info, and could demonstrate that the shares had been sold to finance a deposit on a house he had bought thus giving a legitimate reason for the sale. (He had also sold shares in other companies on the same day it transpired.) But it takes enormous effort to test all these data, phones' records, emails, meetings, etc, etc. Easy it ain't. But it seems that some more resources are going into it these days, according to this article. https://bloomberg.com/news/articles/2017-12-21/u-k-insider-trading-investigations-set-record-as-fca-cleans-up The article also says 30 convictions since 2009. Still not huge I agree but I'd say there are less incidents than people assume. The sensible professionals know there's a strong chance they'll get investigated (if not convicted) and wouldn't take the risk of losing their very lucrative jobs.
For the record I'm not suggesting it's the fault of the FCA per se and certainly not individual officers, although like all crime I'm sure some instances are easier to prove than others.
More that there's a lack of political will to properly resource high level financial fraud cases of all types* and that includes not only funding the investigation but the legal fees afterwards, which is where a lot of cases fall by the wayside and end up getting pleaded out or dropped. I was shocked at the levels of insider trading still appearing to happen from the Times piece.
Found the front page to clarity some of the figures I'd remembered...
*see also zero prosecutions for the wholesale fraud going on in the run up to the banking crisis of 07/08...
It's not just the authorities turning a blind eye to tax evasion/aggressive avoidance versus benefit fraud though. I can't link to the original piece due to the paywall in The Times but they recently did a piece on the prevalence of insider trading, the effects on the wider economy and the disparity in resouces thrown at the two types of crime.
The FCA prosecuted just 8(?) cases of insider trading in the last 5 years. The DWP prosecuted 10,000(?) cases of benefit fraud last year. Yes, they're different crimes and yes one's more complicated than the other but it's also a political reflection of the attitude to fraud and the resources thrown at it. From memory again I think there were 4000 investigators looking at benefit fraud and just 65 looking at insider trading. Yet the Times piece found unusual price movements in around 2/3rds of cases where a profit warning was issued the following day. That ain't any coincidence is it!
Was an interesting article, maybe someone could confirm the figures as mine are from memory?
There is a (sort of triage) unit at the FCA that looks specifically at not just price movements but more specifically at actual trades. They have ready access to these data. And can see anything suspicious.
But, as you suggest, it's really tricky. I once investigated what looked on the surface to be a cast iron case of insider trading. The individual concerned used to work for the firm, lived locally, had friends at the business and sold shares a few days before a (marginally) adverse RNS. The snag, it was a mere coincidence. He had no insider knowledge, hadn't contacted anyone who might have had access to the info, and could demonstrate that the shares had been sold to finance a deposit on a house he had bought thus giving a legitimate reason for the sale. (He had also sold shares in other companies on the same day it transpired.) But it takes enormous effort to test all these data, phones' records, emails, meetings, etc, etc. Easy it ain't. But it seems that some more resources are going into it these days, according to this article. https://bloomberg.com/news/articles/2017-12-21/u-k-insider-trading-investigations-set-record-as-fca-cleans-up The article also says 30 convictions since 2009. Still not huge I agree but I'd say there are less incidents than people assume. The sensible professionals know there's a strong chance they'll get investigated (if not convicted) and wouldn't take the risk of losing their very lucrative jobs.
For the record I'm not suggesting it's the fault of the FCA per se and certainly not individual officers, although like all crime I'm sure some instances are easier to prove than others.
More that there's a lack of political will to properly resource high level financial fraud cases of all types* and that includes not only funding the investigation but the legal fees afterwards, which is where a lot of cases fall by the wayside and end up getting pleaded out or dropped. I was shocked at the levels of insider trading still appearing to happen from the Times piece.
Found the front page to clarity some of the figures I'd remembered...
*see also zero prosecutions for the wholesale fraud going on in the run up to the banking crisis of 07/08...
Thanks for taking the trouble to find the article. And I do know where you are coming from. Coincidently, I was doing an (entirely different type of) investigation in Campbeltown Scotland. Apart from me and a colleague, the whole hotel was full of DHSS (as it then was) investigators who were there working in tandem with the local council fraud unit. They were hitting the town big time for benefit cheats and suggested it was like shooting fish in a barrel in terms of getting prosecutions but that's only for the more serious cases: the vast majority were dealt with by way of caution. They told us that in the main it was young women with children who claimed they were living alone but actually had a partner in the home too. (I think their blokes were mainly working trawlers.) To be fair, I had some sympathy; they were sad individuals with no option but to run a production line of offspring if they wanted to have their own home. Jobs were pretty much non-existent there at the time and conning the council/DHSS was probably the only viable option for the uneducated.
BTW, there has to be a deterrent. Otherwise there'd be nothing to stop us all screwing the system and that estimated loss figure would be far, far higher.
@Bournemouth Addick I do wonder though whether The Times investigation (sic) is seriously flawed. My guess is that most takeovers happen when markets are thriving and on the up. It would be interesting to know what happened to every other share price on the same day. Similarly, profit warnings tend to flood out when the economy is in the doldrums, so again, were all share prices heading down at the same time anyway? Did The Times test this at all? In my experience, the sort of trading levels that are likely to be involved are usually relatively low key and unlikely to have an impact on share prices one way or another. (Things might be different for contracts for differences though).
It's quite rare for insiders to gain huge sums. It's much more likely to be the tens of thousands maximum. Even so, the cost of running an investigation team consisting of a lawyer, accountant, a couple of investigators plus a paralegal becomes very hefty indeed. These types of forensic investigators don't come cheap.
This example is extreme but gives a clue. The Operation Tabernula investigation, which was a joint operation launched by the Financial Services Authority (the FCA's predecessor) and the Serious Organised Crime Agency (the predecessor of the National Crime Agency, or NCA) lasted eight and half years, and resulted in five convictions. It cost just shy of £14m in internal and external costs and required 10.5tb of data storage.
The case involved 140 people on dawn raids at 16 different locations and the analysis of over 100 trading accounts, 500,000 entries of telecom data, 500 hours of telephone conversations and 600 different digital devices.
Then you've got to put it to a jury in terms they'll understand. The Tabernula trial was 12 weeks.
I wonder what percentage of people on here have benefited from tax evasion. Most cash based trades people I know fiddle it.
Can't argue with that.
I use 'salary sacrifice' to put gross salary into my pension, saves on both tax and NI and is totally legal.
It's still evasion.
Salary sacrifice is not tax evasion, the scheme is legal and endorsed by the government and HMRC so that make it tax avoidance which is legal.
There are lots of schemes out there which benefit from salary sacrifice such as child care vouchers for working parents, the ride to work scheme that helps you buy a bike and so on. All perfectly legal and the assistance you get helps you to "avoid" paying tax.
Salary sacrifice doesn't affect your tax where it's funding a pension contribution. Tax on £100 where £10 is paid into a pension yields the same tax as £90 salary and £10 sacrificed and paid by the company as a contribution. What it does is to reduce your own and the company's NI contributions. Out of interest did the company share its savings with you, or does it trouser the lot.
I’ve created the above petition as I’m getting so fed up of saying to those on benefits who are more than capable of working but they’d be far worse off if they do that.
I call on the Goverment to review this so it’s more easier for those people to get a job. Why is the Goverment paying so much welfare but not encouraging to get a job?
The link takes you straight to the sign page. Don you have a link that takes you to the actual petition itself?
I wonder what percentage of people on here have benefited from tax evasion. Most cash based trades people I know fiddle it.
Can't argue with that.
I use 'salary sacrifice' to put gross salary into my pension, saves on both tax and NI and is totally legal.
It's still evasion.
Salary sacrifice is not tax evasion, the scheme is legal and endorsed by the government and HMRC so that make it tax avoidance which is legal.
There are lots of schemes out there which benefit from salary sacrifice such as child care vouchers for working parents, the ride to work scheme that helps you buy a bike and so on. All perfectly legal and the assistance you get helps you to "avoid" paying tax.
Salary sacrifice doesn't affect your tax where it's funding a pension contribution. Tax on £100 where £10 is paid into a pension yields the same tax as £90 salary and £10 sacrificed and paid by the company as a contribution. What it does is to reduce your own and the company's NI contributions. Out of interest did the company share its savings with you, or does it trouser the lot.
They split their NI savings 50/50 and add it into my pot.
I wonder what percentage of people on here have benefited from tax evasion. Most cash based trades people I know fiddle it.
Can't argue with that.
I use 'salary sacrifice' to put gross salary into my pension, saves on both tax and NI and is totally legal.
It's still evasion.
Salary sacrifice is not tax evasion, the scheme is legal and endorsed by the government and HMRC so that make it tax avoidance which is legal.
There are lots of schemes out there which benefit from salary sacrifice such as child care vouchers for working parents, the ride to work scheme that helps you buy a bike and so on. All perfectly legal and the assistance you get helps you to "avoid" paying tax.
Salary sacrifice doesn't affect your tax where it's funding a pension contribution. Tax on £100 where £10 is paid into a pension yields the same tax as £90 salary and £10 sacrificed and paid by the company as a contribution. What it does is to reduce your own and the company's NI contributions. Out of interest did the company share its savings with you, or does it trouser the lot.
The salary sacrifice was not connected to any pension I have, I was answering a previous poster. I have been on the other side of the fence for the last 27 years that being a company director who puts his profits into a private pension fund to avoid paying tax.
Comments
I use 'salary sacrifice' to put gross salary into my pension, saves on both tax and NI and is totally legal.
It's still
evasionavoidance.EDIT: Know the difference yet still got it the wrong way round!
There are lots of schemes out there which benefit from salary sacrifice such as child care vouchers for working parents, the ride to work scheme that helps you buy a bike and so on. All perfectly legal and the assistance you get helps you to "avoid" paying tax.
But, as you suggest, it's really tricky. I once investigated what looked on the surface to be a cast iron case of insider trading. The individual concerned used to work for the firm, lived locally, had friends at the business and sold shares a few days before a (marginally) adverse RNS. The snag, it was a mere coincidence. He had no insider knowledge, hadn't contacted anyone who might have had access to the info, and could demonstrate that the shares had been sold to finance a deposit on a house he had bought thus giving a legitimate reason for the sale. (He had also sold shares in other companies on the same day it transpired.) But it takes enormous effort to test all these data, phones' records, emails, meetings, etc, etc. Easy it ain't. But it seems that some more resources are going into it these days, according to this article. https://bloomberg.com/news/articles/2017-12-21/u-k-insider-trading-investigations-set-record-as-fca-cleans-up The article also says 30 convictions since 2009. Still not huge I agree but I'd say there are less incidents than people assume. The sensible professionals know there's a strong chance they'll get investigated (if not convicted) and wouldn't take the risk of losing their very lucrative jobs.
More that there's a lack of political will to properly resource high level financial fraud cases of all types* and that includes not only funding the investigation but the legal fees afterwards, which is where a lot of cases fall by the wayside and end up getting pleaded out or dropped. I was shocked at the levels of insider trading still appearing to happen from the Times piece.
Found the front page to clarity some of the figures I'd remembered...
*see also zero prosecutions for the wholesale fraud going on in the run up to the banking crisis of 07/08...
BTW, there has to be a deterrent. Otherwise there'd be nothing to stop us all screwing the system and that estimated loss figure would be far, far higher.
It's quite rare for insiders to gain huge sums. It's much more likely to be the tens of thousands maximum. Even so, the cost of running an investigation team consisting of a lawyer, accountant, a couple of investigators plus a paralegal becomes very hefty indeed. These types of forensic investigators don't come cheap.
This example is extreme but gives a clue. The Operation Tabernula investigation, which was a joint operation launched by the Financial Services Authority (the FCA's predecessor) and the Serious Organised Crime Agency (the predecessor of the National Crime Agency, or NCA) lasted eight and half years, and resulted in five convictions. It cost just shy of £14m in internal and external costs and required 10.5tb of data storage.
The case involved 140 people on dawn raids at 16 different locations and the analysis of over 100 trading accounts, 500,000 entries of telecom data, 500 hours of telephone conversations and 600 different digital devices.
Then you've got to put it to a jury in terms they'll understand. The Tabernula trial was 12 weeks.
All legal and not tax evasion.