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I have an ISA.
I opened it because the interest is tax free, and I am therefore avoiding tax.
That, I thought, was the idea of it.
However "Tax avoidance and evasion are unacceptable in the best of times but in today's circumstances it is morally indefensible." Treasury Chief Secretary Danny Alexander
Should I now close my ISA and transfer it to a tax bearing account?
The money in there, of course, has already been taxed.
You're absolutely right morddwyd, but to exand on Danny Alexander's statement:
"Tax avoidance and evasion are unacceptable in the best of times but in today's circumstances it is morally indefensible...except for when we have ideas that will save us money in the long run, or maybe even help the economy. We like people to have lots of savings, that way they can spend the money later and it propls up the banks balance sheets. And what would we do if everyone's savings were eroded by tax now? It'd cost us a bleedin' fortune in 20 years time when more and more people are in the low income bracket and need more state support when they retire"
and always has been. There's nothing wrong with seeking to minimise your tax liability within the law.
Tax evasion is what's illegal - you can sleep easy tonight.
That being the case, FE, we can all make the appropriate judgement on Mr Alexander's statement that avoidance is equally morally indefensible as evasion.
This man is apparently Chief Secretary to the Treasury...
...and also a laughing stock in my household.
Its an interesting point he makes tho' in lumping avoidance in with evasion. I don't for a minute dream he is talking about ISAs nor the use of capital gains to minimise income tax and Ernic. I wonder if we are seeing the start of an assault on flag of convenience tax havens?
I'm well aware that tax avoidance is perfectly legal, the issue here is that my perfectly legal investment in a Government initiated scheme is deemed, by a Government minister, to be "morally indefensible".
As for sleeping easy, I am unlikely to lose sleep over the utterances of any party that is so politically bankrupt that they can form a coalition with Labour at Holyrood and with the Conservatives at Westminster.
The love of ministerial limousines must be pretty strong if you can compromise your political principles to accommodate such extremes.
Engage Brain Before Opening Mouth on the part of the individual who made the pronouncement.
I oft wonder why individuals when speaking in public in front of microphones read from a carefully prepared statement couched in language that would not be used in normal everyday speech.
This is why- failure to think through all possible implications.
The principle statement is sound - If you owe tax pay it
But there are always exceptions to the rule,
Tax free items of all sorts.
Strangely, I was thinking about the very same thing last night. I was doing some re-arranging of ISA investments on-line and the tax 'avoidance' issue came to mind.
My view is that Danny Alexander is somewhat naive, politically, (having been promoted beyond his pay grade, by circumstances).
The issue of who the Libs 'get into bed with' will cause them such problems in the not too distant future both in England and Scotland.
Wee Nick going off to a United Nations summit meeting?? Hilarious, or ridiculous?
Vodafone have so far managed to avoid paying around £6bn in tax, and have recently been let off.
Funny how HMRC can't let off the poor people who completely accidentally under paid tax to the tune of roughly a third of Vodafone's unpaid taxes
Your situation is perfecttly acceptable. The use of ISA's is encouraged by the government as this country, like the USA has a low level of personal savings. Cash ISA's often have a lower return than taxed savings , so you don't save much anyway, and stocks and shares ISA's carry the same risks as normal stocks and shares. You should congratulate yourself on doing your patriotic duty!!
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