[Offwidth]

I apreciate your argument but isnt it rather irrelevant to the grey area avoidance routes that can be tackled to recover lost tax (or to prosecute evation) and this goverment cut the staff, who's job this was, to stupidly low levels. Vanilla tax avoidance complaint is useful for political leverage. Does anyone remembers the Mark Thomas show on the legal exploitation of tax relief based on incredibly limited public access to stately homes or to see important valuable antiques: the politicians involved (like Soames) didnt have to return money or stop using the schemes (dishonestly) but they usually did one or the other when exposed.

In the middle of all this hot air I'd like to know what will happen to do more about real criminals like those at HSBC, especially since the company has form on this (fines due to banking services for mexican drug cartels)

Anyway I got this from 38 degrees today:

https://secure.38degrees.org.uk/page/content/peter-oborne/

[SA Chris]

(can't wait till the avoidance of senior Labour figures gets the air time it deserves) and wish we could have a bit more mature debate.

Surely immediately banging your Toryboy drum negated this?

[Johnny Brown]

I believe I could claim that my Tesco trousers/shirts for work and £1 vintage ties are in fact required uniform, thus saving about £3 of tax - and thus paying the legal minimum. To me, that would be kosher. While doing supply work, I've done something similar with fuel money.

On the other hand, setting myself up as a one-man business, then 'selling' my services to my sole employer, taking a reduced salary, and siphoning off the rest as profits, would be bullshit immorality. With multiple employers it would at least be a little more of a grey area.

I think you've missed the point completely here, none of this is 'bullshit immorality'. I've been in all three of the above situations - employee, self-employed and employer. The tax for such simple situations is sewn up and is little different.

For being a self-employed contractor you pay a little less tax but lose all the benefits of being an employee. The fact that the government take a dim view of such virtual employment has far more to do with protecting the workers against exploitation ( instant zero hours contract with no holiday or sick pay, and no requirement to provide PPE etc) than anything to do with tax.

[hamsforlegs]

The fact that the government take a dim view of such virtual employment has far more to do with protecting the workers against exploitation...

Depends on the industry. I used to be in social work. I received several cold calls per week trying to sell me financial/company management so I could go self employed. They always offered significant reductions in tax. When I crunched the numbers and factored in pension, income protection, holidays etc there was still a significant benefit. Turned out that if playing by the rules, the tax on the dividend that I would pay as an individual would almost exactly wipe out this benefit at the relevant level of income/revenue. The entire model depended on the fact that individuals would not declare the income properly.

Knowing the practice was widespread, I agreed to meet one of the partners at a company that called. He was visibly shocked when I put the numbers to him in a spreadsheet and asked him where the benefit came from. It was obvious that most people taking part in the scheme simply had no idea of the implications of what they were doing. He told me that he would ensure that the individual received a greater income stream, but that it was up to that individual to take care of their own tax arrangements.

Nuts.

A large part of the policy objection is that, at lower levels of income, it becomes very easy for individuals to simply 'forget' to pay tax on all of their income. Of course, it can be easily detected if anyone looks, but this creates a huge amount of work for the taxman, as well as actually creating a very precarious position for those involved.

I'm imagine that at higher income levels or in jobs with large equipment and training requirements the numbers will work out differently.

[Johnny Brown]

Turned out that if playing by the rules, the tax on the dividend that I would pay as an individual would almost exactly wipe out this benefit at the relevant level of income/revenue. 

Which is what I said wasn't it?

The entire model depended on the fact that individuals would not declare the income properly

Maybe I'm hopelessly naive but for the ten+ years I was self-employed I declared all my income, as did everyone else I knew. Unless you were doing irregular work for cash (not unknown but rare in rope access, as I'd guess, social work) it'd be too hard to hide the evidence. I heard of enough folk getting checked out by the taxman to do otherwise. What people did do was milk the expenses.

it becomes very easy for individuals to simply 'forget' to pay tax on all of their income

No idea how you'd do that, they bill you plus interest. Unless you mean not declare it, again, which is tax avoidance fair enough.

[Sloper]

We see an enrmous number of people who want to claim say £2500 for a months loss of earnings and when we get their tax returns / accounts we see they're declaring a fraction of that as earnings.

Most suck up the fact that we will only present a claim based on the evidence that they return to HMRC but some get really very fucked off and usually end up having us cease representing them.

It's not just improper declarations, there are all sorts of other efficiencies which a good accountant should be able to employ.

A lot of people just don't run things through the books which is outright evasion.  I recall a case where the client would be presented with an invoice, vavt number and all and he refused to take cash.  Of course the dodgy fucker would use the same invoice number 3 times but only 'save' one on his system.  The cheques would be presented at a cheque cashing shop and the VAT man never say the VAT or corp tax on the profits.

[Offwidth]

More heat from 38 degrees today:


Exposed: the government isn’t just turning a blind eye to tax-dodgers. It’s actually helping them.

The government has rubber-stamped a legal loophole that allows millionaire finance bosses to pay a lower rate of tax than many nurses and teachers. It’s government-sponsored tax avoidance, and it’s losing us up to £700 million a year. [1]

The scandal is making waves in the news today. [2] It’s the latest in a string of tax-dodging headlines - and Osborne’s position is getting weaker by the day. [3] A huge people-powered petition now will show Osborne that he needs to cracks down on tax-dodging - and that starts with closing the Mayfair loophole. Please sign the petition:


SIGN THE PETITION  http://speakout.38degrees.org.uk/campaigns/41
 
38 Degrees members exposed this scandal. Hundreds of thousands of 38 Degrees members voted to get this campaign going. And almost 6,000 of us chipped in to fund experts and lawyers to investigate, produce an explosive report, and work out how to fix the law. [4] Now we know the truth, and it’s down to us to get this loophole closed.

Our people-powered report proves that tackling tax avoidance isn’t rocket science. We already know what simple change to the law we’d need. [5] Now, it’s a question of whose side George Osborne is on.

With tax dodging all over the news, he’s desperate to convince the public he’ll crack down on it - but so far he’s coming off badly. [6] Today’s outrageous scandal has given Osborne even more bad press on tax dodging. Just weeks before the election, he’s desperate to shut this debate down - and a huge petition is the last thing he wants. Please add your name:


SIGN THE PETITION http://speakout.38degrees.org.uk/campaigns/41
 
38 Degrees members fight for fairness. It’s hard to believe that money which should be funding the NHS is going to millionaire finance bosses instead. Standing together against this Mayfair loophole will show that when it comes to tax dodging, the fight’s only just begun.


Thanks for being involved,

Amy, Nat, Bex, Laura and the 38 Degrees team


PS: This week, a journalist from The Telegraph resigned. He said that the paper buried stories about HSBC and tax dodging because it was worried about losing advertising revenue. He spoke to 38 Degrees to explain what happened. You can watch the video here:
https://secure.38degrees.org.uk/Peter-Oborne


NOTES:
[1] 38 Degrees report: Getting serious: how the UK government helps private equity executives to pay lower tax rates than nurses and teachers, and what could be done about it:
https://secure.38degrees.org.uk/closing-the-mayfair-loophole-report
This report was funded by almost 6000 38 Degrees members, after hundreds of thousands of us voted to get the campaign going. Read the full report here (the first page gives a good summary).
The Independent: Private equity bosses using £700m tax 'loophole' - and donating to the Tories:
http://www.independent.co.uk/news/uk/politics/private-equity-bosses-using-700m-tax-loophole--and-donating-to-the-tories-10054911.html
Mirror: Fatcat fund managers dodge £700 million in tax every year because of loophole:
http://www.mirror.co.uk/news/uk-news/fatcat-fund-managers-dodge-700million-5187932
[2] Here's a photo of the papers today - the mayfair loophole which 38 Degrees members have exposed:
 
[3] Guardian: George Osborne under pressure from Vince Cable over HSBC scandal:
http://www.theguardian.com/business/2015/feb/15/george-osborne-under-pressure-from-vince-cable-over-hsbc-scandal
[4] 38 Degrees blog: Mayfair loophole: Should we campaign?
https://secure.38degrees.org.uk/loophole-poll-results
[5] Page 13 of the 38 Degrees report gives a proposed amendment to Finance Bill 2015 - to close the mayfair loophole by taxing "carried interest" as ordinary income:
https://secure.38degrees.org.uk/closing-the-mayfair-loophole-report
[6] Daily Mail: "I probably shouldn't be advocating this": Video of a young George Osborne advising voters how to dodge taxes unearthed':
http://www.dailymail.co.uk/news/article-2955919/I-probably-shouldn-t-advocating-Video-young-George-Osborne-advising-voters-dodge-taxes-unearthed.html
 

[slackline]

Not tax avoidance but this is a clear demonstration and analysis of how taxes have changed over the last decade based on data from the HMRC and ONS.  I can see little to disagree with the closing statement that "The tax system we have is unjust, and that is an increasingly obvious trend."

[Sloper]

Here's some raw data which should keep you busy slackers 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/363915/141014_MTG2014_Online_tables_v3.xls#'Table 1.1'!A1

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/249193/mtg-table2011.xls#'Table 1.1'!A1

This clearly shows that the 'tax gap' has narrowed significantly and that this government has done more than the last to close loopholes and prevent evasion.

[slackline]

Here's some raw data which should keep you busy slackers 

Thats not raw data, those are summarised tables  (and the choice of format is such that they contain macros and potentially malicious code, just to warn others who might open them).

This clearly shows that the 'tax gap' has narrowed significantly and that this government has done more than the last to close loopholes and prevent evasion.

Read my post and the link I posted again, it is not about a  tax avoidance / 'tax gap' / loopholes as I clearly wrote.  It is however related to the taxation system, hence my choice of thread.

[Sloper]

Ok, what about rare data? (note to self don't argue with a pedant when he's right)

I also find the statement 'our system is unfair to be rather an odd one based on the data presented) as I can't see that a variation of +/- 2% over a 20 year period when we've seen such massive chamges in income tax rates and the economic situation is suggestive of anything of statisctical significance (I relise how risky this statement is). 

In respect of the chart showing direct + indirect taxation by decile, the recent changes to personal allowances should see a constant line whereby each decile pays more than the lower decile.

In response to Steve, my problem with sites like 38degrees is they necessarily tend to simpified and monochrome positions when the issues and their solutions are highly complex and multicoloured.

[petejh]

This ^

The government has rubber-stamped a legal loophole that allows millionaire finance bosses to pay a lower rate of tax than many nurses and teachers. It’s government-sponsored tax avoidance, and it’s losing us up to £700 million a year. [1]

A simple pantomime narrative of Baddies and Goodies. Where's Batman to save us now?

[slackline]

Ok, what about rare data? (note to self don't argue with a pedant when he's right)

I also find the statement 'our system is unfair to be rather an odd one based on the data presented) as I can't see that a variation of +/- 2% over a 20 year period when we've seen such massive chamges in income tax rates and the economic situation is suggestive of anything of statisctical significance (I relise how risky this statement is). 

Time for a new prescription on the glasses or a typo?  The data in the article I linked covers ten years (2004 to 2014).

Table 1 is what stands out to me as starting to qualify the statement that "out tax system is unfair".  Looking at those numbers columns 4 to 10 look pretty stable across the ten year period.  Columns two (Income tax, Capital Gains Tax and National Insurance Contributions), and three (VAT) however are what stand out.

Over the first half of the period covered (2004-05 through to 2009-10) the proportion of the HMRCs revenue derived from Income Tax, Capital Gains Tax and National Insurance Contributions increased steadily from 55% through to a peak of 59%, whilst at the same time the proportion of the HMRCs revenue derived from VAT decreased from 19% down to 17%.

Over the second half of the period covered (2011-12 through to 2013-14) these trends are reversed and at the end the proportion of HMRCs revenue deerived from Income Tax, Capital Gains  Tax and National Insurance Contributions reverted to that of 2004-05 at 55%, whilst the proportion derived from VAT increased very rapidly past that of 2004-05 levels to 21% in 2011-12 and has remained at that level.

Compared to 2004-05 the same proportion of the HMRCs revenue is derived from Income Tax, Capital Gains Tax and National Insurance Contributions, but more is derived from VAT, I expect this is to be due to increase in the rate of VAT, rather than people spending more, since the economy has been in recession and people don't spend more during such times.

Out of the spectrum of incomes in society whose available funds do increases in VAT hit the hardest?  The poorest, since they still have to buy food, which whilst the essentials are not directly taxed do increase in cost due to rises in the cost incurred by companies of getting the food to the shop for people to buy in the first place, they have to buy clothes too, and fuel for their own transport or public transport too (all of which have increased not necessarily due to absolute tax rate, but the underlying cost of a barrel of oil increasing until only very recently when its nose-dived).  This will have helped swell the proportion of the HMRC revenue that is derived from VAT.

NB 2004-05 is missing 2% of income (the percentages total 98%), 1% might have slipped into 2005-06 and 2006-07 (which total 101%), most others aren't right either.  This is likely down to lazy rounding and a good example of why precision is important.

In respect of the chart showing direct + indirect taxation by decile, the recent changes to personal allowances should see a constant line whereby each decile pays more than the lower decile.

So in essence you are saying "The poor are paying less Income Tax thanks to the increases in tax free allowance", yet that is offset by the fact that they are paying more for the goods they need to buy, food, clothing, fuel/transport.

The increase in the cost of essentials has little impact on the rich, because they earn a large amount anyway, but for the poor it has a huge impact which is what the third figure (the ONS' chart 12, really it needs a third dimension to show changes over time) shows.  Yet at the same time the HMRCs revenue from Income Tax, Capital Gains Tax and National Insurance Contributions has decreased, whats driven this?  People leaving the country in droves? Nope.   The reduction of the 50% tax rate on the highest band income to 45% quite probably, I'm not aware of what changes have occurred in Capital Gains Taxation over this period, but do know that some changes are coming in for pulling in more revenue which is good.

Those who are taxed in that highest band income could absorb an additional 5% on that income, they might not like it but they're not going to struggle to survive paying the mortgage, let alone affording the essentials, which drives down the need to have higher VAT rates which disproportionately impact on the poorest and make virtually no difference to those paying the higher tax rate.  There are more poor people than there are rich (income distribution is inherently positively skewed by being bounded to zero on the left hand side) and by freeing expendable income for the poor from having to buy essentials their spending will stimulate the economy more than the minority of rich who's spending habits won't change anyway regardless of a 5% change in their taxation above £150,000 income.

That to me is how and why the figures and tables support the statement that "The tax system we have is unjust, and that is an increasingly obvious trend.".

I can't see that a variation of +/- 2% over a 20 year period when we've seen such massive chamges in income tax rates and the economic situation is suggestive of anything of statisctical significance (I relise how risky this statement is).

If you tell me what a meaningful change is I'll tell you whether or not its statistically significant since you can have statistically significant changes that are of such a small amount that they are meaningless (large sample sizes can give low variation such that small differences in means are statistically significant), and you can have meaningful changes that are not statistically significant (if for example the means differ yet the variance is so high the distributions overlap considerably).

[GraemeA]

In response to Steve, my problem with sites like 38degrees is they necessarily tend to simpified and monochrome positions when the issues and their solutions are highly complex and multicoloured.

Rich from someone who labels anything he disagrees with a leftie fuckwittery 

[hamsforlegs]

No idea how you'd do that, they bill you plus interest. Unless you mean not declare it, again, which is tax avoidance fair enough.

I think that's the problem. As you say, if anyone gets wind it will be obvious to uncover and you'll have a lot of money owing. But a lot of people obviously did it and got away with it.

[a dense loner]

Like shagging a whore bareback. Stay safe kids

[Johnny Brown]

I bet you can get a receipt for that in Aberdeen.

[Sloper]

In response to Steve, my problem with sites like 38degrees is they necessarily tend to simpified and monochrome positions when the issues and their solutions are highly complex and multicoloured.

Rich from someone who labels anything he disagrees with a leftie fuckwittery 

Not true at all, perfectly willing and able to debate without the characterisation above (althoughj I must say is is frquently and justifiably called for) as demonstrated here and elsewhere.

[Sloper]

Ok, what about rare data? (note to self don't argue with a pedant when he's right)

I also find the statement 'our system is unfair to be rather an odd one based on the data presented) as I can't see that a variation of +/- 2% over a 20 year period when we've seen such massive chamges in income tax rates and the economic situation is suggestive of anything of statisctical significance (I relise how risky this statement is). 

Time for a new prescription on the glasses or a typo?  The data in the article I linked covers ten years (2004 to 2014).

Table 1 is what stands out to me as starting to qualify the statement that "out tax system is unfair".  Looking at those numbers columns 4 to 10 look pretty stable across the ten year period.  Columns two (Income tax, Capital Gains Tax and National Insurance Contributions), and three (VAT) however are what stand out.

Over the first half of the period covered (2004-05 through to 2009-10) the proportion of the HMRCs revenue derived from Income Tax, Capital Gains Tax and National Insurance Contributions increased steadily from 55% through to a peak of 59%, whilst at the same time the proportion of the HMRCs revenue derived from VAT decreased from 19% down to 17%.

Over the second half of the period covered (2011-12 through to 2013-14) these trends are reversed and at the end the proportion of HMRCs revenue deerived from Income Tax, Capital Gains  Tax and National Insurance Contributions reverted to that of 2004-05 at 55%, whilst the proportion derived from VAT increased very rapidly past that of 2004-05 levels to 21% in 2011-12 and has remained at that level.

Compared to 2004-05 the same proportion of the HMRCs revenue is derived from Income Tax, Capital Gains Tax and National Insurance Contributions, but more is derived from VAT, I expect this is to be due to increase in the rate of VAT, rather than people spending more, since the economy has been in recession and people don't spend more during such times.

Out of the spectrum of incomes in society whose available funds do increases in VAT hit the hardest?  The poorest, since they still have to buy food, which whilst the essentials are not directly taxed do increase in cost due to rises in the cost incurred by companies of getting the food to the shop for people to buy in the first place, they have to buy clothes too, and fuel for their own transport or public transport too (all of which have increased not necessarily due to absolute tax rate, but the underlying cost of a barrel of oil increasing until only very recently when its nose-dived).  This will have helped swell the proportion of the HMRC revenue that is derived from VAT.

NB 2004-05 is missing 2% of income (the percentages total 98%), 1% might have slipped into 2005-06 and 2006-07 (which total 101%), most others aren't right either.  This is likely down to lazy rounding and a good example of why precision is important.

In respect of the chart showing direct + indirect taxation by decile, the recent changes to personal allowances should see a constant line whereby each decile pays more than the lower decile.

So in essence you are saying "The poor are paying less Income Tax thanks to the increases in tax free allowance", yet that is offset by the fact that they are paying more for the goods they need to buy, food, clothing, fuel/transport.

The increase in the cost of essentials has little impact on the rich, because they earn a large amount anyway, but for the poor it has a huge impact which is what the third figure (the ONS' chart 12, really it needs a third dimension to show changes over time) shows.  Yet at the same time the HMRCs revenue from Income Tax, Capital Gains Tax and National Insurance Contributions has decreased, whats driven this?  People leaving the country in droves? Nope.   The reduction of the 50% tax rate on the highest band income to 45% quite probably, I'm not aware of what changes have occurred in Capital Gains Taxation over this period, but do know that some changes are coming in for pulling in more revenue which is good.

Those who are taxed in that highest band income could absorb an additional 5% on that income, they might not like it but they're not going to struggle to survive paying the mortgage, let alone affording the essentials, which drives down the need to have higher VAT rates which disproportionately impact on the poorest and make virtually no difference to those paying the higher tax rate.  There are more poor people than there are rich (income distribution is inherently positively skewed by being bounded to zero on the left hand side) and by freeing expendable income for the poor from having to buy essentials their spending will stimulate the economy more than the minority of rich who's spending habits won't change anyway regardless of a 5% change in their taxation above £150,000 income.

That to me is how and why the figures and tables support the statement that "The tax system we have is unjust, and that is an increasingly obvious trend.".

I can't see that a variation of +/- 2% over a 20 year period when we've seen such massive chamges in income tax rates and the economic situation is suggestive of anything of statisctical significance (I relise how risky this statement is).

If you tell me what a meaningful change is I'll tell you whether or not its statistically significant since you can have statistically significant changes that are of such a small amount that they are meaningless (large sample sizes can give low variation such that small differences in means are statistically significant), and you can have meaningful changes that are not statistically significant (if for example the means differ yet the variance is so high the distributions overlap considerably).

When I click on that link fig. 1 & 3 start from 1990 and it is only table one which runs from 2004 and this shows an inverse relationship between IT & general tax take and the macro exonomic factors: but I don't see this as an arbiter of 'fairness'.

[slackline]

When I click on that link fig. 1 & 3 start from 1990 and it is only table one which runs from 2004

  They actually cover a 34 year period since they start from 1980, so we both need our eyes testing.

and this shows an inverse relationship between IT & general tax take and the macro exonomic factors: but I don't see this as an arbiter of 'fairness'.

No, they don't but table 1 and chart 12 do as I've tried to explain. 

What Figure 1 does show though is that over time the absolute amount of tax received has increased, as one might expect when economies only ever grow.  The red line though shows these absolute figures as a proportion of the countries GDP, i.e. "the country is 'making' X money, but the HMRC are seeing Y% of it".  This hit a nadir, from the HMRCs perspective, in 1993-94 and then recovered to a high in 2010-11, then dropped, went back up a bit and dropped again.

The third figure (labelled Figure 3) supports the figures in and the summarisation I made below of Table 1 showing that less income tax is paid (as a proportion of GDP), it doesn't however show any increase in VAT, which is only shown in the table.  Where is the biggest factor of less Income Tax being paid going to have come from?  I doubt its from the poor who pay little tax anyway since they don't earn a huge amount, and thats even been reduced due to increases in personal allowance, which is unfortunately more than offset by the increased indirect taxation as (second figure, labelled chart 12).  Unlikely to be down to huge increases in unemployment since most of those will be from low paid jobs.  I expect the reduction in HMRC Income Tax take home is due to the reduction in the top band level, which as I wrote above those who fall into it could easily accommodate without any impact on their life.

Do you think that the second figure (labelled chart 12), taken in conjunction with the figures in Table 1 (coincidentally labelled figure 1) shows that everything is fair?  I don't and since chart 12 is missing the time dimension, the figures in table 1 add that information and show that in the last four or five years the situation has got worse since the HMRCs revenue from VAT has as a proportion increased.

[Sloper]

One of the reasons tax take will have declined is that personal allowances have increased whreas wages have been more or less static in nominal terms (or even reducing in nominal terms in some cases).

That said the premises of the article do not support the conclusion.

For the sake of impartiality, I presume you've looked at the source of funds for the research 

[Matt002]

All the loop holes stem from the principle that companies pay tax only on profits rather than on sales.
I have worked both ways as a company director I ensured my profits were as low as possible to keep my corporation tax bill low (totally legal and encourages re-investment rather than payment of dividends)
I am now employed and pay my tax PAYE at much higher rates than before.  I don't get the option to pay tax on my spare income after bills (profits) so why should companies be afforded this.
Companies should have to pay tax on sales, and consider it an overhead like rent, materials etc.
That would close pretty much every current tax loop hole as hiding sales is illegal where as diverting or minimising profits are not.

[Oldmanmatt]

All the loop holes stem from the principle that companies pay tax only on profits rather than on sales.
I have worked both ways as a company director I ensured my profits were as low as possible to keep my corporation tax bill low (totally legal and encourages re-investment rather than payment of dividends)
I am now employed and pay my tax PAYE at much higher rates than before.  I don't get the option to pay tax on my spare income after bills (profits) so why should companies be afforded this.
Companies should have to pay tax on sales, and consider it an overhead like rent, materials etc.
That would close pretty much every current tax loop hole as hiding sales is illegal where as diverting or minimising profits are not.

They do. It's called VAT.
Only where trading falls below the VAT threshold does your situation hold true and that is because they are (in income tax parlance) in a lower tax bracket.
If you draw a salary, it is liable to income tax at the appropriate rate.
If you draw a dividend, you must have made a profit and the corporation tax must have been paid prior to issuing the dividend.
Aka, you must pay tax.
Any other system makes employing people et al incredibly difficult (oh yes, let's not ignore Employers contributions added to those salaries). Having run companies in Italy and France, which are taxed on turnover, I absolutely guarantee the British system is superior and allows SMEs to survive in a way that our European counterparts envy.
This also gives us lower unemployment (again, look to Italy).

The issue at hand is how large Corporations and Uber Wealthy individuals evade tax, not how SMEs or contractors minimise liability.
If you've been a director, you will know that the reinvestment that you make to avoid profit is what drives a vast proportion of the Economy.
Our economy is strong compared to most of Europe and that foundation is rather important to that strength.

Being "A nation of shopkeepers", has insulated us from much of the tribulations that have decimated neighbours.

[slackline]

One of the reasons tax take will have declined is that personal allowances have increased whreas wages have been more or less static in nominal terms (or even reducing in nominal terms in some cases).

That said the premises of the article do not support the conclusion.

I forgot about that factor but am not sure that in the context of a income/capital gains and national insurance as a proportion of GDP that that will make any difference since GDP has if I remember correctly not shrunk massively.  In fact if anything it emphasizes the fact that in these supposed "times of austerity" where we're "all in it together" that companies avoiding tax (vague attempt to be on topic) and those who are well off and earning in the high tax bands, a proportion of whom will be seeking to legally minimise the amount of tax that they are paying (another vague attempt to stay on topic), are not having such a hard time as those whose wages have stagnated at the other end of the spectrum, yet have seen their cost of living increase.

For the sake of impartiality, I presume you've looked at the source of funds for the research 

The sources the article cites are the HMRC and ONS

[Sloper]

I mean who funds the author as it is his interpretation you're quoting.

I always struggle to understand how the lowest decile is supposed to have direct and indirect taxation @ c. 50%

According to wkipedia (I know not exactly the gold standard) has the second lowest decile on £15k so I think it's fair to suggest that the lowest decile has an income of c. £10k.

No IT on £10k is £nil
Ni contributions about £350
Council tax, let's be generous and say £700 so that's £1000 of direct taxation.

So where does the other £4000 worth of indirect taxation come from from £8650 income?

I've yet to see any cogent answer to this question.