Tax planning is about not paying too much, not too little

Bullying expats about offshore tax planning is in the media spotlight as many ordinary folk struggle to get past on earn shrinking against inflation.

Managing your wealth is not wrong – the law says you can as long as you don’t commit a crime by evading tax.

The big issue is not what expats do with their money to minimise the amount of tax they pay, but the artificial schemes and sometimes downright lies people who still live in Britain tell to try to save paying what they owe.

Tax management is not only about paying less tax, but sensible planning is about making sure you do not pay too much tax when your finances stretch across two or more countries that may be on separate continents.

Looking after your money is also about making sure savings and investments are performing at their peak.

The inbetweeners

Plenty of wealthy expats do not claim credits, reliefs and allowances to which they are rightly entitled because they do not know they are available, just as thousands of British pensioners and poorer families do not claim the state benefits to which they are entitled.

Somewhere along the line sensible money management for the rich and the poor has become disarticulated. Instead of having people with not enough, enough or more than enough money, we have scroungers and tax dodgers with the rest of are inbetweeners.

Part of the problem is the complexity of the law. Too many tax laws that govern expats are too complicated for ordinary people to follow, while HM Revenue & Customs seems to have a gotcha culture that springs in to action when someone does something wrong, rather than helping taxpayers do what is right.

Sensible tax planning

Simplifying tax is a process that has been going on for years, but instead of rewriting tax law in plain English, the lawyers should rip the lot up and start again.

The coalition government has a couple more Budgets to give it a go and make a real difference instead of just shuffling the pages and editing a few words.

Taxpayers should hope that Budget 2013 brings some relief, not necessarily in the terms of pounds and pence, which the government cannot afford to offer, but in the onslaught unleashed against them  by HMRC.

While everyone applauds the tax man bringing down cheats, dodgers and crooks, tax avoidance is legal and stops sensible people paying too much, not helping rogues pay too little.