Tax dodging celebrities

[Skeptisk]

It seems that Rupert Grint has lost another court case against HMRC and will have to cough up £1.8 million in unpaid tax. I am not sure if that is before interest and penalties or whether it includes HMRC’s costs.

Probably not a good look for celebrities, to be caught tax dodging, although in Grint’s case it would take a Time Machine to impact his career as I don’t think he currently has one!

Still, I expect his lawyers aren’t too upset as they no doubt gouged him for fees for following their advice and ending up in court. Will they be telling him to appeal to keep the funds flowing? (I’ve not checked whether an appeal is possible).

[sugerbear]

Was his tax advisor Nadhim Zahawi?

[Gordon Hill]

sugerbear said:

Was his tax advisor Nadhim Zahawi?

No Rachel from accounts

[Dracoro]

Are the Accountants/Tax advisors liable in these situations? What regulations are in place?

I don’t know the ins and outs of this particular case, however the actor at the time was young (I’ll grant him some naivety) and would not necessarily know what’s the correct thing to do is, hence would pay tax advisor/account as they are supposes to know the best (and legal) way to do things.

How’s does one know if they are advising well or poorly? After all, isn’t that why you pay advisors!

Do they have to publish what options are available (and pros/cons of each, both financially and legally) to the client and then which one the client chose. I.e. why even present and option that is tax evasion to even give that as an option.

[Gecko1978]

If his career is done then he could simply leave the UK keep all his money etc.

I kind of don't care because we only hear about it because of his media profile but let's be honest 1000s if not 10,000s other will do the same because you work hard an give away millions to see it wasted and then are told you have broad shoulders an should pay more.

[Billy_Rosewood]

Was is a clear cut case of evasion? The HMRC have increasingly conflated the lines between avoidance and evasion in recent years and gone after people for avoidance.

[Mr Pointy]

Gordon Hill said:

sugerbear said:

Was his tax advisor Nadhim Zahawi?

No Rachel from accounts

Actaually it seems it was his father & another accountant. Seems like he might want to invest in better advisors. He lost a previous case where the tribunal agreed that he could have legitimately moved his accounting end-year date but had failed to actually do so, which sounds a bit like a procedural error.

[Newc]

It was down to utterly terrible advice from his financial managers, who tried to use an avoidance method that had already been identified and banned by HMRC in the 1970's.

While I have no time for him as an individual with his nonsense comments on transgender, and throwing JK Rowling under the bus, it does seem that he was young and 100% reliant on his advisors, so it's all down to them not him. But they of course won't be paying the bill.

[Mrr T]

Newc said:

It was down to utterly terrible advice from his financial managers, who tried to use an avoidance method that had already been identified and banned by HMRC in the 1970's.

While I have no time for him as an individual with his nonsense comments on transgender, and throwing JK Rowling under the bus, it does seem that he was young and 100% reliant on his advisors, so it's all down to them not him. But they of course won't be paying the bill.

Was it? The media suggests he declared residual income from movies, DVD sales etc, as a capital gains rather than income.

[98elise]

Mrr T said:

Newc said:

It was down to utterly terrible advice from his financial managers, who tried to use an avoidance method that had already been identified and banned by HMRC in the 1970's.

While I have no time for him as an individual with his nonsense comments on transgender, and throwing JK Rowling under the bus, it does seem that he was young and 100% reliant on his advisors, so it's all down to them not him. But they of course won't be paying the bill.

Was it? The media suggests he declared residual income from movies, DVD sales etc, as a capital gains rather than income.

I thought it was selling a bunch of rights? Either way it's highly unlikely he knew how it should be taxed, that's why you pay professionals when your finances get complicated.

I've owned a couple of fairly small Ltd companies and still paid accountants to do my accounts and advise me, because I simply don't know tax law.

Same with closing them, I needed a specialist to close them and make sure I pay the appropriate taxes, but minimise it where possible.

[macron]

When your earlier ruse was to move your tax year specifically to elongate the period where you paid 40%, not 50% income tax, and you fked that up, surely you learn not to take the piss again..?

[Newc]

Mrr T said:

Newc said:

It was down to utterly terrible advice from his financial managers, who tried to use an avoidance method that had already been identified and banned by HMRC in the 1970's.

While I have no time for him as an individual with his nonsense comments on transgender, and throwing JK Rowling under the bus, it does seem that he was young and 100% reliant on his advisors, so it's all down to them not him. But they of course won't be paying the bill.

Was it? The media suggests he declared residual income from movies, DVD sales etc, as a capital gains rather than income.

Yes, exactly that. He sold his future Potter residual payments (income at 50% tax) to a company, and that company's value increased as the residuals arrived (capital gains at 28% or less).

HMRC have a long standing view that converting income to CG that way is a no-no.

[ChocolateFrog]

Absolutely zero sympathy.

If someone tells you can pay 10% tax on millions when someone who earns minimum wage will pay more even accounting for their personal allowance you as a person have to think something is wrong.

If that sits well with him (and all the others) then they've got no conscience and should just move to Dubai with all their like minded mates.

[Diderot]

ChocolateFrog said:

Absolutely zero sympathy.

If someone tells you can pay 10% tax on millions when someone who earns minimum wage will pay more even accounting for their personal allowance you as a person have to think something is wrong.

If that sits well with him (and all the others) then they've got no conscience and should just move to Dubai with all their like minded mates.

Please show your workings.

[Billy_Rosewood]

Newc said:

It was down to utterly terrible advice from his financial managers, who tried to use an avoidance method that had already been identified and banned by HMRC in the 1970's.

While I have no time for him as an individual with his nonsense comments on transgender, and throwing JK Rowling under the bus, it does seem that he was young and 100% reliant on his advisors, so it's all down to them not him. But they of course won't be paying the bill.

It does feel unfair to take the advice of an expert/professional for the HMRC to take the view that ultimately the individual is liable.

The whole reason for consulting an expert is because you do not understand your liability! Accountants/financial advisors/tax consultants seem to be wholly off the hook. I can't imagine that being the case, for example, with a solicitor giving incorrect legal advice?

The fact that "The office of tax simplification" even existed shows that it's not possible for a lay individual to confidently navigate the world of tax without professional help.

Edited by Billy_Rosewood on Sunday 1st December 11:19

[Dingu]

ChocolateFrog said:

Absolutely zero sympathy.

If someone tells you can pay 10% tax on millions when someone who earns minimum wage will pay more even accounting for their personal allowance you as a person have to think something is wrong.

If that sits well with him (and all the others) then they've got no conscience and should just move to Dubai with all their like minded mates.

Of course you go out of your way to pay maximum tax you can I’m sure.

[OMITN]

Billy_Rosewood said:

It does feel unfair to take the advice of an expert/professional for the HMRC to take the view that ultimately the individual is liable.

The whole reason for consulting an expert is because you do not understand your liability! Accountants/financial advisors/tax consultants seem to be wholly off the hook. I can't imagine that being the case, for example, with a solicitor giving incorrect legal advice?

The fact that "The office of tax simplification" even existed shows that it's not possible for a lay individual to confidently navigate the world of tax without professional help.

Edited by Billy_Rosewood on Sunday 1st December 11:19

No, you’re always liable for your own liabilities.

If you received negligent advice, then sue the advisor afterwards.

[98elise]

OMITN said:

Billy_Rosewood said:

It does feel unfair to take the advice of an expert/professional for the HMRC to take the view that ultimately the individual is liable.

The whole reason for consulting an expert is because you do not understand your liability! Accountants/financial advisors/tax consultants seem to be wholly off the hook. I can't imagine that being the case, for example, with a solicitor giving incorrect legal advice?

The fact that "The office of tax simplification" even existed shows that it's not possible for a lay individual to confidently navigate the world of tax without professional help.

Edited by Billy_Rosewood on Sunday 1st December 11:19

No, you’re always liable for your own liabilities.

If you received negligent advice, then sue the advisor afterwards.

Agreed. You're paying people to advise you, but it's still your taxes and your decisions.

[Lotusgone]

Billy_Rosewood said:

Newc said:

It was down to utterly terrible advice from his financial managers, who tried to use an avoidance method that had already been identified and banned by HMRC in the 1970's.

While I have no time for him as an individual with his nonsense comments on transgender, and throwing JK Rowling under the bus, it does seem that he was young and 100% reliant on his advisors, so it's all down to them not him. But they of course won't be paying the bill.

It does feel unfair to take the advice of an expert/professional for the HMRC to take the view that ultimately the individual is liable.

The whole reason for consulting an expert is because you do not understand your liability! Accountants/financial advisors/tax consultants seem to be wholly off the hook. I can't imagine that being the case, for example, with a solicitor giving incorrect legal advice?

The fact that "The office of tax simplification" even existed shows that it's not possible for a lay individual to confidently navigate the world of tax without professional help.

Edited by Billy_Rosewood on Sunday 1st December 11:19

I don't know how Grint chose his advisors, but something brought him to this point. Either someone he knew recommended this bunch or he heard about a way to save loads of tax. The advisors may have said, there's a risk but it means paying £2M less tax if it comes off. Whichever, it was his decision.

[Skeptisk]

Lotusgone said:

I don't know how Grint chose his advisors, but something brought him to this point. Either someone he knew recommended this bunch or he heard about a way to save loads of tax. The advisors may have said, there's a risk but it means paying £2M less tax if it comes off. Whichever, it was his decision.

Unless they were completely incompetent they would have highlighted at the time the risk of it not being accepted by HMRC and pointed out it was his decision whether to follow their suggested approach.

Frankly as he had already tried and failed to use a tax dodge there was a probability of 1 that HMRC would be auditing his tax returns and also a probability of 1 they would be challenging anything even vaguely dodgy. I would have demanded a very strong opinion from council that the proposed scheme would very likely succeed in court before submitting a tax return with a questionable approach.