Sir Chris Hoy responds to 'misleading' tax story

Tax evasion is serious, Tax avoidance isnt due to it being legal.

When Jimmy Carr was battered last week it made me just shake my head. The Tories are all at it so why pick on him? If Cameron is so bothered about it, close the loops holes, you're the bloody PM you have the power to sort it......whats that? You wont because youre all upto it yourself, thought so.

Tax avoidance is a serious issue and it's disappointing to read how some people are so lax about it. And don't suppose we would all do it given the opportunity. Not everybody is selfish and only think of themselves.
I'm glad to hear Sir Chris Hoy isn't avoiding his duty. Shame on the Guardian!

bloody newspapers, they do love the sensationalism, sells copies!

At the end of the day, if we had that kind of money we would all look to reduce the amount we pay in tax. Someone said last week that David Cameron made a big deal about Jimmy Carr, however, had it been one of his conservative sponsors it would be a different matter. I agree. If i had that kind of money I wouldnt be wanting to pay like 40% tax on it.

As a Guardian reader I'm disgusted by their conduct so far in this. They printed 4 large pictures of sportsmen on Saturday as part of the current tax-avoidance-fest. I didn't even read it - I've got better things to do on Saturdays than read about celebs' tax affairs. I just registered who they were and assumed they all had the same story as Carr as implied by the headline. I hope that now Sir Chris appears to have cleared his name the paper will print a full apology under a similar sized photo (they won't).

mrb - surely then every member of the British armed forces should pay no tax as they "represent" the country, and in much more difficult circumstances than any athlete and for far less reward.

I just get a bit fed up of the pedestal that athletes (football players included) are placed on these days.

From what I understand and have read Chris Hoy seems to have done nothing wrong. At the end of the day though he has done pretty well out of his chosen career path, not as good as many others in this world, but well enough.

I just find it distasteful to see it suggested that this group of people should get some form of breaks from society because they "represent" us.

Can't see what the fuss is about. He's only trying to keep hold of his own money. It's not as if he's kept it hidden under the floorboards like Ken Dodd.

Recently one of the guys at work told me that he used to work as a contractor previously and the accountant he hired to help basically said that there is a difference between tax aviodance and tax evasion, one is legal the other is not...and you simply have to avoid it...

As for me, I have always had a salary so always paid tax!

Blue skies all

Ive seen Chris Hoy's house. Its nice enough but he certainly isnt in the Phillip Green or David Cameron's dad league of richness/ tax avoidance. Also, he isnt like some British pro cyclists i can name who live abroad - im sure mainly for training reasons but who im also sure do it tax reasons.

Genuinely self-emplloyed individuals are often accused of avoiding tax by having their fees paid in to a company, and then drawing it out in the form of loans. Ken Livingstone waas similarly accused. But there really is very little substance to this claim.

The best you can do really is delay part of the tax bill. The company has to pay tax at around 24%, and when eventually the individual takes dividends, the tax on the dividend increases the effective tax rate overall to a very similar level to paying simple income tax on feees received as an individual. Also, if you borrow momey from your own company, HMRC levies a special tax called "section 419" at 25%, which is a kind of loan - when you repay the loan, for example by taking a dividend instead, HMRC repays the tax and assesses you for income tax on the divi.

It is a slightly different proposition when an individual whose income is earned through employment uses a company. (Hoy and Livingstone were channelling self-employed fees, sponsorship income etc this way). Then, you can effectively get around the 13.8% employers national insurance contributions which woudl otherwise be due. This is a little controversial when practiced by many thousands of IT consultants and similar who for some years have used such structures, although they have to deal with an HMRC policy called "IR35".

Very controversial indeed has been the practice of senior civil servants and local authority cheif execs doing the same. It is one thing for private companies and individuals to look for legal ways to cut their tax bills, but for our government to conspire in cheating itself out of its own tax revenues is extraordinary.

"K2" and similar schemes used by Jimmy Carr, Gary Barlow etc are an entirely different ballgame. They avoid tax altogether through use of extremely contrived and non-commercial trickery. They are however - just - legal, and it is down to the government to do someting about them. It does look like that is about to happen though, through a new concept in the UK, already established in a number of other countries, called a "General Antiavoidance rule". It kind of says, in the usual dense prose, "if it walks like a duck, and quacks like a duck, it's a duck".

Good for the Guardian (and the rest of the papers by the way). £325,000 is not small beer. Hoy is tax dodger even if what he did was legal and should be exposed as such. The buying property augument by the way is the one all the tax avoiders use.

Personally I would like to see more of our illlustrious prime minister and his very very very wealthy cronies tax avoidance schemes come to light but being in power they can just reduce there own tax burden by reducing the tax rate for higher earners and creating ways to allow them do this. and then castigating us for trying to do the same and at the same time make us pay more tax in sneaky budget laws.

If you want to make more money for the country make our leaders stop squandering all the taxes they raise. These avoidance schemes and people trying to save a little money pale in insignificance with the money government wastes each year and then too have a go at people like mr carr whose tax is miniscule compared to what they waste themselves, whether he is avoiding tax is irrelevant in light of what the government gets up to.

We all look to avoid tax, its natural, in one legal way or another. If the Revenue allows it whats the problem. Make it simpler and more transparent. I have no problem with people being successful. Take a leaf our of the gevernments and there wealthy friends and do the same.

As a (rather lowly) tax adviser, I'd say that if Hoy's statement above is accurate then he is completely in the clear and the Guardian ought to be ashamed of themselves. Taking a loan from your own company is standard practice and there are clear rules surrounding it. It won't result in a lower tax bill. The difference with the likes of the K2 tax scheme and this is twofold:

1) The loan was repaid (and this was always the intention), and
2) There's no offshore vehicle.

You need both of these (and a whole lot of very careful planning) to avoid tax. The Guardian appears to have made a snap judgement based purely on the word "loan".

I'm not going to pretend to understand all this tax stuff, but I am self employed and thanks for my accountant I can write of a little tax here and there, even just for cleaning my own chef's whites.

As long as he's competing at the highest level for both UK and Scotland, then he should be given the ability to right off some of his taxes in my eyes. The money he brings into sport through sponsors and the like must be a hefty sum.

I don't give a jot about lottery funding, thats nothing to do with public money apart from the people who choose to play Lotto.

I think Hoy, not alone but with a select group of cyclist's have raised the profile of British cycling over the last decade or so and this has attracted interest for such companies as BSkyB who now run a pro team based in the UK.

With the profile being raised, I would also think thats given rise to bike sales in general. So more money being spent in the UK.

Ok, its not right to be able to avoid taxes, but high profile athletes should be able to benefit a little from their continued performance on behalf of the country.

To be honest I don't care whether Sir Chris is making millions by not or not paying his taxes(because lets face it if we could reduce our own tax (legally of course) then who wouldn't) , what i do care about as he clearly does,is to do his best for British sport. So good on you mate, you definately get my support!