UK Media Argue Over Window Cleaners Receipts

Tax dodge: Leonardo DiCaprio's character Jordan Belfort prepares to go to extreme measures in a scene from film The Wolf of Wall Street, which is based on Belfort's life story. Governmental tax was always initiated as a temporary measure. Just how many cherries should you give before they chop the tree down?

How did Labour spend a week about HSBC arguing over window cleaners? (By James Hutchinson). Whenever a politician declares that we 'should' do something, they'll be held to that standard; the slightest deviation will be met with cries of hypocrite. So moralising MPs need to watch out - or it's the political equivalent of the traffic warden parked on double-yellow lines.

When Ed Balls said that everyone "should" ask for receipts, it wasn't just the nonsense of what he was saying which was frustrating, although that was a problem. It's obviously not my responsibility to make sure someone else is paying tax. It was also inevitable he'd fail by his own standards. Unless he has a storage locker of receipts, obsessively alphabetised, Balls was going to have erred at least once. And The Daily Mail duly dug up his window cleaner - who Balls hadn't asked a receipt from in years, apparently.

Labour inevitably cry foul at this sort of journalism, suggesting it's one-sided campaigning from a right wing press which distorts what was originally said. They may be right - Balls was talking about cash and he pays his window cleaner by cheque, thereby creating a paper trail, making tax avoidance harder and riskier. But the fact that I've had to write those words - an actual sentence typed by my own fingers for a respected political website about a senior politician's £12 a month window cleaning bill - shows just how much Labour have been sucked into the long grass.

There are many people who think Labour's election strategy is off-piste: if anything puts the case for the prosecution it’s that Labour has made front page headlines about double glazing and some bloke in West Yorkshire who cleans them. It was self-generated - it was Balls who started the narrative.

Have you ever asked your window cleaner for a receipt? Me neither. Nor, it appears, has the shadow chancellor Ed Balls, at least not in the past 17 years, according to the man who has cleaned his windows for almost two decades. Reporters tracked down Balls’s window cleaner after the shadow chancellor urged people at the weekend to keep a record of cash payments handed to tradespeople.

Aiming to make political capital over the furore surrounding HSBC’s Swiss banking activities, and pledging that Labour would crack down on systemic abuse of the tax system, Balls claimed that, as shadow chancellor, he was “extremely careful” about these things himself. The ploy backfired, although, as Balls pays for his window cleaner’s services by cheque, he does not appear to be guilty of aiding and abetting tax evasion.

His opposite number in the government, George Osborne, has also found himself exposed in the growing row over tax dodging in the wake of the explosive HSBC revelations. Embarrassing footage from 2003 has been unearthed, showing Osborne, then a lowly MP, recommending the use of what he called “pretty clever financial products” to help reduce care costs, although he did admit that he “probably shouldn’t be advocating this on television”.

HSBC and those who used the services of its Swiss private banking arm will no doubt welcome the diversion of political point-scoring involving window cleaners and the like but the fallout from the scandal shows little sign of abating.

What was Ed Balls thinking? Was he thinking at all? Between Chancellor and Shadow Chancellor, we have two men who have made a complete mess of handling the tax-avoidance issue. At some political debacles you want to weep, and at others you have to laugh, but with Ed Balls And His Odd Job Receipts the emotional reaction is different. At this fiasco, you cannot bear to look. You want to leave the room, because this is like one of those Ali G interviews which delicate souls like myself find too excruciating to endure. It is the comedy of gross embarrassment without the comedy. With any self-inflicted disaster on this scale, the temptation is to recycle a shtick of yore. In this case, it must be resisted. Equally futile is asking what Balls can possibly have been thinking. He cannot have been thinking at all. His diktat about the duty, for tax purposes, to demand and keep receipts and personal details from window cleaners.

It took the Daily Mail a day to unearth one John Durning of Pontefract, who has cleaned the windows of the Balls-Cooper West Yorkshire home each month since the year Osborne told “Bill” how to avoid tax. The Mail learned that not once in those dozen years has a receipt been requested from John the Window Cleaner, who may become this election’s Joe the Plumber. Meanwhile the Daily Telegraph raided its MPs’ expenses database to discover that the Balls-Coopers have reclaimed £2,640 for unreceipted odd jobs. It would overegg the double standards pudding to mention that Balls seems as lax in giving documentary evidence as in demanding it. When he drove into another car last year, he famously departed the scene without leaving a note on the windscreen. Careless prangers are under a strict legal obligation to leave their name and address. The hirers of odd job people are under none at all.

How much for cash? - Blogger of the Year Peter Rhodes on tax-dodging: So Labour is going to get a grip on tax dodging. Good luck with that. The snag is that, while there will always be a small percentage of millionaire families (take the Milibands of Primrose Hill, for example) who use clever, and entirely legal, strategies to keep their tax liabilities to a minimum the biggest form of tax dodging is the sort used a million times a day by small businesses. “Knock a few quid off for cash?” asks the customer, and the plumber / window cleaner / electrician gladly agrees. Now, the tradesman may be using cash payments to dodge VAT and income tax. On the other hand, he may simply prefer cash because it saves him the bother of taking yet another cheque to the bank. So over to you, Messrs Miliband and Balls. How do you sort the wheat from the chaff, the bona-fide from the fiddlers? The Balls answer, revealed this week, is for customers to demand a receipt for all work done. So that's higher prices for the customers, more paperwork for the traders, battalions of tax inspectors to monitor every bank account and crawl over every scribbled receipt, and, presumably, some penalty on customers who don't keep their receipts. Is that what the two Eds want? If so, do let us know so we can all get the house rewired or painted before May 7, General Election day.

Most British workers and savers 'avoid tax', not just the super-rich: The tax dodges you can feel good about - and the ones you can't. What is the difference between tax planning, avoidance and evasion? It’s not just a financial issue - it’s a moral one, too. Tax planning is a sensible part of looking after your finances, and some schemes are set up because the Government wants consumers to reduce their tax bills.

But when you start making deliberate or contrived attempts to lower your tax bill, that’s when you start getting onto dodgy ground. As shown by last week’s fracas around the deed of variation taken out on the will of Ed Miliband’s father, it’s all about interpreting what the law intended from a tax break. Put simply, evasion is stone-cold illegal — and could land you in prison. This is deliberately hiding income, earnings or investments from the Revenue in order to reduce your tax bill.

Avoidance is not illegal, but means bending the rules of the system to gain an advantage that Parliament never intended. It is within the letter — but not the spirit — of the law. It often involves artificial transactions that serve little or no purpose, other than to cut your tax. However, that doesn’t mean that it won’t land you in trouble. HM Revenue and Customs takes an interest in schemes it thinks are suspect and can pursue them in court. If it’s ruled they could be classed as avoidance, you will have to pay this money back. The problem is making the distinction for yourself. And it largely depends on your own code of ethics.

Here, we try to get to grips with the rights and wrongs of tax planning. Cash in hand to cut odd-job bills, from window cleaning to a bit of gardening or trimming a hedge once a month, paying cash in hand is good for you as it saves on the bill because your odd-job man is not charging VAT. And it’s good for your odd-job man because it can allow some of their earnings to slip by under the counter. For low-income workers struggling to make a living, avoiding VAT and some income tax can mean the difference between paying fuel bills and being broke. It has been suggested by the Conservatives and Labour that these under-the-counter payments should be clamped down on, but it’s no concern of yours. Your odd-job man’s tax affairs are his own — it’s their job to pay due tax and not your responsibility.