Government for the rich by the rich – what changes?

“I am staggered at how stupid the Treasury have been.”

Not stupid.

Crooked.

Black Triangle
Anti-Defamation Campaign
In Defence of Disability Rights

OK – so what would you have done differently then? Don’t just rant, provide workable alternatives (workable, means works in reality, not fantasy land).

We have gone to a situation where a sovereign nation has agreed to tax foreigners bank accounts at a rate that is higher than their domestic rate and remit that money to the other government.

In any other situation, this would be a huge capitulation by the Swiss government – but you seem offended by it.

Ignoring the fact that I am not entirely sure why someone should be taxed twice, once in the UK and once in the country where the money is held, can’t you see that any deal that brings in more money for the UK Treasury is a good thing?

If you are offended by the differing rates of tax, then I presume you would call for lower taxation in the UK to encourage overseas assets to be moved to the UK?

Actually Richard Murphy is wrong on both charges.

UK Swiss bank account holders are not being let off. They will still be liable for investigation by HMRC and prosecution if it is found they have evaded tax. Although the Swiss keep their bank secrecy (boo hiss, but it was never likely they would agree to scrap this) they will allow HMRC the details of 500 British account holders every year. So anyone evading tax risks the fact that they will be one of the 500 investigations this year, or next, or the year after. And a prison sentence beckons if caught.

The reason why the marginal tax rate charged is slightly lower than the actual UK marginal rate is due to the fact that there are timing differences between the Swiss handing over tax money immediately and them then getting it back from account holders. A technical issue.

As it happens the tax rate that the Treasury has secured for future payments is much higher than the German Treasury managed to negotiate.

True, but don’t forget that since recently Swiss banks have been discouraging foreign based account holders (at low/medium level, at least) by applying very heavy bank charges that basically wipe out any interest accrued. The fact that these charges also apply to accounts of Swiss living abroad has led to much protest. So, opening a Swiss account isn’t quite as attractive an option as it may first seem…

Richard Murphy also seems to believe that almost all money held in Swiss banks by BRits is there illicitly (see his blogs).

On the contrary although there will almost certainly be criminal assets banked there, there have also been tens of thousands of Brits who used to work in Switzerland, or Germany, or France and just banked in Switzerland. They would have paid tax on their earnings and kept their savings in Switzerland.

Until these savings were repatriated to the UK it was perfectly legal, until now, not to declare interest income to HMRC.

This was also the case with the Channel Islands and Isle of Man until 2007, and Lichenstein until 2009. Switzerland is just the latest addition to this list.

Overall not a perfect solution, but pretty much the best solution practicable. Richard Murphy (despite his high profile on Radio 4 this morning) is very much alone in thinking this deal is “disastrous”.

Actually Richard Murphy is wrong.

Isn’t that the strapline for his blog?

there have also been tens of thousands of Brits who used to work in Switzerland, or Germany, or France and just banked in Switzerland. They would have paid tax on their earnings and kept their savings in Switzerland.

Expats generally. There are perfectly good reasons not to want to bank your money in, say, Russia, Nigeria or Angola if you happen to be a BP engineer.

@ TimJ

“Expats generally. There are perfectly good reasons not to want to bank your money in, say, Russia, Nigeria or Angola if you happen to be a BP engineer.”

Expats who move regularly between SIngapore, HK, Dubai, Latin America find it easier to have one bank (in Switzerland) than to be constantly opening and closing bank accounts round the world.

Or you want to keep your assets in a strong currency like the Swiss Franc rather than sterling. Try opening a CHF account at Natwest. Easier just to bank with UBS.

Or because Swiss banks offer a much better wealth management service than their UK equivalents.

Or you want to hide assets from your partner.

Two points:-

Tax avoidance is not a crime.

Tax evasion is.

Try harder.

Of course the other solution could be for the UK government to spend less and lower tax, thus lowering the incentives to evade it.

Just a thought……….

And also this notion of tax evaders having equivalent moral status to looters is quite wrong. Governments coerce their citizens to accept a contract to pay tax at a level of their choosing.

It’s a state sponsored protection racket.

Those who try to evade this unilaterally imposed compulsory contract are criminals, according to the laws of the state, however they are not thieves in the same moral dimension as those who steal or destroy someone else’s property.

I am currently unemployed, having left college to go to university. Painfully near the bottom of my overdraft, I just had to bail out my ex-wife (a working single mother of our disabled child) because our darling Government decided she owed them £250 in overpaid benefits from two years ago.

And there’s our beloved Chancellor giving yet more tax breaks to the super-rich. Because they so need it.

When I first saw the headline I thought ‘wow, is George actually doing something sensible?’
Alas, no. He remains as indulgently, sickeningly clueless as ever. Or maybe not. I’m starting to lean heavily towards the possibility that this government really is made up entirely thoroughly vile individuals who know exactly what they’re doing and believe they can carry on with impunity. After all, it’s not like anyone else is fit to lead the UK.

And there’s our beloved Chancellor giving yet more tax breaks to the super-rich. Because they so need it.

I think you might need to read up on what’s actually happened.

Steven van der Wherf

“And there’s our beloved Chancellor giving yet more tax breaks to the super-rich. Because they so need it.”

I’m afraid that really is the most staggeringly misinformed way of looking at this agreement.

Every informed commenter, apart from Richard Murphy, thinks this is a pretty good deal for the British taxpayer. Not perfect, but by far the best that was reasonably possible.

For years the Swiss have refused to even countenance such an arrangement. Now Osborne has secured a deal that will garner £5bn. And doesn’t let evaders off the hook.

If you think Osborne is letting criminals off scot free then do you also think Darling let criminals off scot free when similar agreements were signed with the Channel Islands and Isle of Man in 2007.

@Tim J

Expats generally. There are perfectly good reasons not to want to bank your money in, say, Russia, Nigeria or Angola if you happen to be a BP engineer.

So you’re saying that UK banks are so rubbish that that BP engineers won’t use them? Perhaps we should close them all down, considering how bad they are. My grandfather worked abroad in the 30’s and 40s and paid his savings into a British bank account.

How low have we sunk that our banks no longer give people access to their accounts when they are abroad … or is there some other reason why these people decide to open a bank account where there are financial secrecy laws and low taxes on bank interest?

So you’re saying that UK banks are so rubbish that that BP engineers won’t use them? Perhaps we should close them all down, considering how bad they are. My grandfather worked abroad in the 30?s and 40s and paid his savings into a British bank account.

What do you think has happened to the value of sterling over the past five years? What has happened to the value of the Swiss franc? Equally, what has happened to the British banking system in the past three years? Can you think of a reason, any reason at all, why someone who doesn’t work in the UK, and isn’t paid in the UK might not choose to put his money in a UK bank ahead of all other choices?

is there some other reason why these people decide to open a bank account where there are financial secrecy laws and low taxes on bank interest?

I’m assuming that you realise that someone not resident in the UK, and not paid in the UK, isn’t subject to tax in the UK?

You shouldn’t be staggered. It has long been obvious that successive governments have colluded with tax dodgers by providing loopholes for them to exploit. Equally they have grossly understaffed the HMRC and ensured it was led by people more eager to catch regulation-befuddled ordinary citizens than the wealthy and influential employers of expert tax “advisors”. This deal is exactly what I expected.

“this is a pretty good deal for the British taxpayer” Such a good deal that even the Americans wouldn’t touch it with a bargepole. The Swiss took advantage of the UK’s weakness and brokered a deal that left them in the driving seat and the guilty still protected.

17 – the Germans must be feeling pretty silly then. Osborne’s deal is significantly better tha the one they managed.

Briar:

“Such a good deal that even the Americans wouldn’t touch it with a bargepole. ”

What has this to do with the Americans ?

Americans have a totally different tax system from European countries, in that Americans have always been liable for tax on their global income.

Thus Americans don’t have the luxury of moving to lower tax regimes and paying less tax. Americans in Dubai pay 35% tax to the IRS (after the first $90k) rather than the 0% tax that EU citizens pay in Dubai.

Perhaps it’s me but this article seems to read as:

I use my income from working in the UK to buy a house in Switzerland, but only have to pay half the normal UK Land Tax therefore making it more advantageous to buy a house there than in the UK.

Why am I paying any tax at all on this purchase? What the heck has it got to do with the UK government?

Briar:

“You shouldn’t be staggered. It has long been obvious that successive governments have colluded with tax dodgers by providing loopholes for them to exploit.”

Why would any government want to deliberately have less tax revenue ?

Do you really think Gordon Brown chose to allow tax dodgers to get off without paying billions. Don’t you think he’d rather have had billions more to spend on Sure Start and new schools ?

Similarly the Tories. Why help a handful of tax dodgers when they could have billions more to spend on tax cuts for the middle classes (and thus get elected with a stonking majority) or buy more aircraft carriers and tanks and other stuff Daily Telegraph readers like.

@9
“Tax avoidance is not a crime”

I agree. It’s legalised tax evasion. Meanwhile, those of us on PAYE have no choice but to pay tax, while the rich avoid it altogether.

buddyhell:

“I agree. It’s legalised tax evasion. Meanwhile, those of us on PAYE have no choice but to pay tax, while the rich avoid it altogether.”

People on PAYE avoid tax all the time.

Saving in an ISA, tax relief on saving in a pension, buying booze at duty free in an airport, child trust funds, buying a forest and not paying CGT when you sell it, not paying cgt on your primary residence etc etc.

What you seem to be saying is that there is more scope for freelancers evading tax. But why just think this is the rich. How many freelancers (from taxi drivers, builders, mechanics, wedding photographers, Ebay traders…..all the way to six figure journalists and successful businessmen) do you think fail to declare all their income to HMRC.

It’s only stupid if you still cling to the delusion that we live in a democracy with a government committed to acting in the interests of the general populace. In a plutocracy it all makes perfect sense.

@23

“People on PAYE avoid tax all the time.

Saving in an ISA, tax relief on saving in a pension, buying booze at duty free in an airport, child trust funds, buying a forest and not paying CGT when you sell it, not paying cgt on your primary residence etc etc”

Nice try but the stagnation of wages over the last 15 years or more, coupled with the ever increasing cost of living means that many, if not most people on PAYE cannot afford to save. Furthermore, what person on a salary of £25,000 pa can afford two residences?

“What you seem to be saying is that there is more scope for freelancers evading tax”

Try reading my comment again. You presumed that.

What’s the view like from your ivory tower?

I apologise for suggesting that Gordon Brown wouldn’t be so stupid as to deliberately give up tax revenie.

According to Denis McShane he was offered a similar agreement by the Swiss ten years ago and turned it down.

http://www.spectator.co.uk/coffeehouse/7191433/treasury-agrees-swiss-bank-tax.thtml

25 – everyone ‘avoids’ tax all the time because the concept of tax avoidance is so nebulous. If you buy chocolate chip cookies instead of chocolate digestives you’re avoiding paying VAT. If you switch from beer to cider you’re avoiding paying higher duties.

Legally there are really only two categories: people who pay all the tax they are legally obliged to, and people who don’t.

What is truly amazing about Murphy is that he can write something one dya, and then a couple of days later completely contradict himself.

Check this (for Liberal Conspiracy):

“Give me the choice of this unelected form of government by central bankers in Europe and quitting Europe I know where I stand in an instant – I would have no doubt that Britain should leave the EU…” (August 23, http://bit.ly/nXPrb4)

and then this (from his blog):

“It’s important to say this deal was not needed. The revised European Union Savings Tax Directive is on the table. Twenty five EU states support it and it has looked very likely recently that compromise with the other two was possible and that Switzerland could have been pulled on board. So deal that would have ensured there was automatic information exchange on all interest income and gains arising throughout Europe, Switzerland, Liechtenstein and the UK’s tax havens was on its way, covering not only individuals but companies and trusts as well and with names and addresses being supplied.

That deal would have ensured we’d have got all the information we needed to demand all the tax due by those who have been criminally evading their tax bills by hiding funds in Swiss banks that have been deliberately and knowingly helping them to do so”

(August 25, http://bit.ly/mYUJD6)

So one day he wants to leave the EU, a couple of days later he wants, well, to be part of it.

That is consistency.

buddyhell:

I was giving you the benefit of the doubt as your comment that “the rich avoid tax altogether” is just too ludicrous to address seriously.

The super-rich have various scams that allow them to reduce their tax bill (like taking investment income as “carried interest” rather than normal income or capital gains) and I have often complained about these.

In the UK Gordon Brown was notorious for his tax breaks to private equity barons.

But to claim that the rich pay no tax is just silly.

Meanwhile, those of us on PAYE have no choice but to pay tax, while the rich avoid it altogether.

Richard Murphy provided some advice for tax avoidance in the Times last week, although IIRC it was for the self-employed. Perhaps ask your employer if you can become a contractor and ask Murphy for advice on how to minimise your tax.

“Perhaps ask your employer if you can become a contractor and ask Murphy for advice on how to minimise your tax.”

I believe the HMRC have been getting stricter on those claiming to be contractors and thus reducing their tax.

As I understand it you can only claim to be a contractor if you work for many different employers. If you are getting 90% of your work from one employer then you will be regarded as a salaried employee.

I believe that various well-known BBC presenters were employed as contractors but as they got 90% of their income from the BBC, with the odd newspaper article, then the HMRC insisted that they were actually BBC employees.

“People on PAYE avoid tax all the time…buying a forest and not paying CGT when you sell it”

The number of forests I’ve bought and sold in my time…

CGT is another subsidy for the rich anyway. All “capital gains” should be taxed as income, given that that’s what they are. Ditto savings interest, share dividends and, most importantly of all, inheritances.

Pasha

CGT on your house too ?

They are facing criminal charges in the UK for having leaflets condemning tax avoiders

I haven’t looked into the facts of the matter, but my spidey sense is telling me this might not be true. (I could have egg on my face shortly)

meanwhile:

This deal is letting thousands of wealthy tax criminals off the hook – without them ever being held to account or even having to admit to their crimes.

and

UK Swiss bank account holders are not being let off. They will still be liable for investigation by HMRC and prosecution if it is found they have evaded tax. Although the Swiss keep their bank secrecy (boo hiss, but it was never likely they would agree to scrap this) they will allow HMRC the details of 500 British account holders every year.

is a correction in order?

no: “bullshitters seek to convey a certain impression of themselves without being concerned about whether anything at all is true. They quietly change the rules governing their end of the conversation so that claims about truth and falsity are irrelevant.”

@28

“I was giving you the benefit of the doubt as your comment that “the rich avoid tax altogether” is just too ludicrous to address seriously”

Slippery as well as disingenuous. Nice combination.

“The super-rich have various scams that allow them to reduce their tax bill (like taking investment income as “carried interest” rather than normal income or capital gains) and I have often complained about these”.

Have you? In what capacity have you lodged these complaints?

“In the UK Gordon Brown was notorious for his tax breaks to private equity barons.

But to claim that the rich pay no tax is just silly”

Thanks for misrepresenting my post. It’s exactly the sort of thing apologists for tax dodgers would do. The rich are clearly in a better position to avoid tax than the average worker. Try again.

@29

“Richard Murphy provided some advice for tax avoidance in the Times last week, although IIRC it was for the self-employed. Perhaps ask your employer if you can become a contractor and ask Murphy for advice on how to minimise your tax”

And you people have the brass neck to complain about structural deficits.

buddyhell:

I quoted you accurately. Hence my use of quotation marks.

Just to remind you of what you wrote:

“Meanwhile, those of us on PAYE have no choice but to pay tax, while the rich avoid it altogether.”

Note you didn’t say “the rich have more opportunities to avoid tax than those of us on PAYE”. Which is, of course, perfectly true. You specifically said the rich avoided tax “altogether”.

Which doesn’t, also of course, imply the rich take advantage of those opportunities. JK Rowling doesn’t live in Monaco for instance. She could, but she doesn’t.

And plenty of the rich are also on PAYE. Bankers probably being the largest well paid profession largely on PAYE.

And just to make it clear to you I am no apologist for tax evasion at all. And would very much like the tax avoidance loopholes tightened up (hence my reference to carried interest and private equity millionaires). I just don’t think misrepresenting the arguments surrounding tax, and who pays it, is at all helpful.

@buddyhell #

You said at #22:

Meanwhile, those of us on PAYE have no choice but to pay tax, while the rich avoid it altogether.

Since you now say (your #34) that to say that taking the italicised words at face value as meaning that “the rich pay no tax” is to “misrepresent” your post, perhaps you could explain what they do mean?

buddyhell,

@29

“Richard Murphy provided some advice for tax avoidance in the Times last week, although IIRC it was for the self-employed. Perhaps ask your employer if you can become a contractor and ask Murphy for advice on how to minimise your tax”

And you people have the brass neck to complain about structural deficits.

Hmm? You appear to have the wrong end of the stick: I was surprised that someone who keeps complaining about tax avoidance wrote an article for the Times in which he gave advice about avoiding tax.

They are facing criminal charges in the UK for having leaflets condemning tax avoiders

I haven’t looked into the facts of the matter, but my spidey sense is telling me this might not be true. (I could have egg on my face shortly)

It’s a bit of a distortion, to put it mildly.

ISTM the people he is referring to have been charged with aggravated trespass at Fortnum & Masons. They have been distinguished from the other protestors, against whom charges have not been brought, because of the leaflets and other paraphernalia they were carrying. This allegedly show they did not enter and remain in the shop with the purpose of shopping but demonstrating, hence the aggravated trespass charges.

There is an argument to be had about this case, but it isn’t true that people are facing criminal charges for merely “having leaflets condemning tax avoiders”.

no: “bullshitters seek to convey a certain impression of themselves without being concerned about whether anything at all is true. They quietly change the rules governing their end of the conversation so that claims about truth and falsity are irrelevant.”

I may disagree with other bloggers on Liberal Conspiracy, but I don’t think anyone other than Murphy demonstrates such an antipathy to facts and treat LC as a read-only-medium.

@Richard Murphy:

In one of your recent posts on your own blog you made the claim that:

But what we know for sure is that most money held in Switzerland got their illicitly – it was not taxed before its arrival in the Alps.

Could you let us have details of the research/investigation that revealed that fact? I’m a little suprised, given that I understand there are laws in Switzerland protecting bank secrecy, that “we” are able to make the determination to any degree of certsainty, but clearly you have better sources of information.

@40 Murphy has a tendency to sit on his source of facts and figures.

tax avoidance should be a crime – it is simply legalised looting.

There are 35,000 Brits living in Switzerland and approx £125bn of financial assets owned by Brits in Swiss banks.

A lot of this £125bn will be rich Britons who have sold out of businesses in the UK, paid the appropriate taxes, and retired to a chalet in the Alps where they legally pay less tax on their investments than they would in the UK.

There will also be a lot of wealthy hedge fund managers and bankers who live in Switzerland, pay Swiss taxes, and have tens of millions in the bank.

There will also be the footloose international types, like Lewis Hamilton or various golfers, who base themselves in Switzerland and have tens of millions in the bank.

There will also be professional ex-pats (bankers, oil executives) who work all ove rthe world, especially the developing world, who use Switzerland as their banking base. They will pay taxes in the countries that they work in.

None of these assets are illicitly obtained or untaxed.

There will be billions that are criminally obtained, or that have evaded capital gains tax, or been illegally undeclared in divorce proceedings, but to claim that “most money” in Swiss banks is illicitly obtained, as Richard Murphy claims, cannot be substantiated.

“tax avoidance should be a crime – it is simply legalised looting.”

Child Trust Funds are legalised looting. Do you really think that ?

Governments offer tax breaks (tax avoidance) to encourage good behaviours or to support social ends. Hence VAT isn’t charged on food, kids clothes or books.

Governments like people to save for their retirement, so tax breaks are offered to pension fund savers and ISAs.

The nation likes trees. So investing in forests gives you tax breaks that investing in coffee shops doesn’t.

Or do you just mean certain areas of tax avoidance are no more than legalised looting ?

In which case I’d agree with you. Trouble is it’s harder to close them down than it might appear. Foreign countries being allowed to set their own (very low) tax rates being a major issue. Though I’d doubt you’d want western nations telling developing countries that they need to impose higher tax rates.

@Sunny Hundal #42:

tax avoidance should be a crime

Take a moment to think abvout the distinction between tax avoidance and tax evasion. Then explain how it is even possible for tax avoidance to be a crime.

Just to help; when you criminalise a tax avoidance tactic (to keep it simple, let’s assume we’re talking about investing in an ISA), it ceases to be tax avoidance and becomes tax evasion.

It’s interesting to see that the Germans signed pretty much the same deal recently. And the German government are much more affected by Swiss banking than the UK (due to proximity). So they must be pretty “stupid” as well … or maybe “astonishingly” Richard Murphy is trying to argue a case that doesn’t really stack up.

And the position that tax avoidance is effectively criminal misunderstands what tax avoidance and tax evasion mean. There is a marginally more interesting debate to be had about how far tax avoidance should go, and indeed the Swiss withholding tax deal appears to be part of the long-running European strategy to close down offshore tax havens, one by one. (Removing sovereign countries’ main financial advantage is about as easy as it sounds.) Again, the naivity of some of the posters on this site is extraordinary.

Stupid? No, this is quite deliberate.

What is really astonishing is that there is an open goal – the need to tighten up tax regimes so that they are truly fair, transparent and don’t give unfair advantage to some groups in society over others – and writers on this site so comprehensively miss it. This petty stuff written by the OP is largely irrelevant ideological stuff and doesn’t even touch the sides of the main issues.

These include: the desperate need for the tax system in this country to simplified to (among other things) help underpin a renewed sense of social contract between citizen and state, the need to progressively negotiate with sovereign countries across the world to stamp out opportunities for tax evasion and rebuild a sense that tax is used for positive purposes for all in the community.

This isn’t wishy-washy stuff. What is stupid is people trying to score political points by making up nonsensical stories about how they think the world might work. Let’s grow up and stop dicking around.

@37

You’re still misrepresenting what I’ve written as this wilful example of hair-splitting indicates

“Note you didn’t say “the rich have more opportunities to avoid tax than those of us on PAYE”. Which is, of course, perfectly true. You specifically said the rich avoided tax “altogether”

The rich have to power to avoid tax completely while those of us on lower incomes cannot afford to do so. Which part of that do you find hard to understand?

@39

“Hmm? You appear to have the wrong end of the stick: I was surprised that someone who keeps complaining about tax avoidance wrote an article for the Times in which he gave advice about avoiding tax”

What on earth are you talking about?

@38

“Since you now say (your #34) that to say that taking the italicised words at face value as meaning that “the rich pay no tax” is to “misrepresent” your post, perhaps you could explain what they do mean”

Duh. The rich have the ability to avoid tax. Is that so hard to understand? I challenge you to find someone on £15,000 or £20,000 pa who can avoid tax in the same way the rich do.

Odd how those of you who leapt on my comment deliberately avoided my point about stagnating wages and rising cost of living. Those at the top of the income ladder are unlikely to have seen a stagnation of their income.

With all these people ‘avoiding’ tax, is it any wonder we have a structural deficit?

@buddyhell

The rich do not have the power to avoid tax completely.

Can you give any examples.

The only people who avoid tax completely are those that work in the black economy and declare no income to HMRC at all.

Do you really think JK Rowling, Alan Sugar, the Duke of Westminster, James Dyson, the guys who run the UK’s banks, Elton John, the Sainsbury family and that man who has just sold his computer firm in Cambridge to HP for a couple of billion pay absolutely no tax ?

@buddyhell:

“I challenge you to find someone on £15,000 or £20,000 pa who can avoid tax in the same way the rich do.”

You seem to be confusing those on PAYE not being able to avoid tax and those who are self employed having more flexibility over their income.

A banker at RBS on £1 m will be on PAYE and can’t avoid the 40% and 50% tax and NI.

A guy who owns a corner shop, takes no salary and takes home £20,000 in dividends will pay less tax than someone working up the street as an employee at Tesco getting paid £20,000.

Because one is an employee on PAYE. And the other a small business owner.

Self employed people have plenty of scope for tax avoidance because there are many things they can offset against tax. Freelance journalists can offset the cost of their Apple Mac against tax. That’s avoidance.

@Nick

You’re splitting hairs (again) and you’re reading things into my posts that aren’t there. I suspect you have some sort of reason for doing this, namely to excuse and apologise for those who avoid tax.

You said,
“You seem to be confusing those on PAYE not being able to avoid tax and those who are self employed having more flexibility over their income”

Where did I mention the “self-employed”? Furthermore, can all self-employed people do this? No. I know self-employed cycling instructors who may have “flexibility” over their incomes (which is, in itself misleading since there are always lean times) who cannot afford to take advantage of tax-dodging schemes.

Your post at #52 repeats the same misrepresentations.

@Nick

“A banker at RBS on £1 m will be on PAYE and can’t avoid the 40% and 50% tax and NI”

It’s revealing that you should mention RBS. Nonetheless, it is unlikely that a “banker on 1m” is going to have the same sort of terms and conditions as someone who works at one of the windows. Furthermore, they can afford to pay some top accountant to find ever more creative ways of dodging tax.

Buddyhell:

You are making no sense. Please be specific about what you are complaining about. I am not splitting hairs, I am quoting you accurately. You keep saying the rich pay no tax whatsoever. Which is simply untrue.

Just to be straight.

Tax evasion is illegal. I am as against tax evasion as I am all other criminal acts. Prosecute and fine them and lock up the worst offenders.

Tax avoidance is legal.

There are varying degrees of tax avoidance. On the one hand duty free shops and ISAs are tax avoidance but most people think they are ok. Moving to Monaco to avoid tax is considered immoral and selfish. I totally agree.

You keep saying that the rich have scope to tax avoid. I disagree. The rich who are on salaries don’t have any more scope to tax avoid than anyone else on PAYE. I mention RBS only because banking is the industry that probably has richest people in the UK earning a salary. Elton John is richer than bankers but he isn’t on a salary.

I’d love to know what all these tax avoidance schemes are that you think the rich employ ? I’m no investment banker, but I know a couple, and I can assure you that over half their six figure salary and bonus goes in income tax and NI. If you are a UK citizen and on PAYE there really is nothing “dodgy accountants” can do for you.

Twenty years ago possibly. Bankers got bonuses paid in gold or vintage cars I believe. HMRC stopped this loophole the next year.

Duty free is hardly the same as the sort of tax dodging that’s done by those who can afford an accountant to help them take advantage of loopholes. You’re comparing apples to oranges.

“Tax avoidance is legal.”

The sort of tax avoidance that is enjoyed by the rich is legalised looting. Simple as that. That money doesn’t get paid to the Treasury. Meanwhile the rest of us have no choice but to pay tax. What is so hard to understand, Nick?

“You keep saying that the rich have scope to tax avoid. I disagree. The rich who are on salaries don’t have any more scope to tax avoid than anyone else on PAYE. I mention RBS only because banking is the industry that probably has richest people in the UK earning a salary. Elton John is richer than bankers but he isn’t on a salary”

Nonsense, they have the wherewithal to avoid it.

“I’d love to know what all these tax avoidance schemes are that you think the rich employ ? I’m no investment banker, but I know a couple, and I can assure you that over half their six figure salary and bonus goes in income tax and NI. If you are a UK citizen and on PAYE there really is nothing “dodgy accountants” can do for you.”

In this paragraph you practically admit that those on PAYE cannot afford to take advantage of the same schemes as the better off. It took a while but you got there in the end.

By the way, duty free is only available to those flying outside of Europe.The goods on sale in tax free shops at airports are often no cheaper than high street shops.

buddyhell

“Nonsense, they have the wherewithal to avoid it.”

I have very politely debated this issue with you but you just keep repeating that the rich use dodgy methods to avoid tax and legally loot the Treasury.

Yet you can offer not a single example. Or evidence that this is the case.

“In this paragraph you practically admit that those on PAYE cannot afford to take advantage of the same schemes as the better off. It took a while but you got there in the end.”

I said in my previous post that the self employed rich can move to Monaco to avoid tax.

But bankers working in Canary Wharf can’t base themselves in Monaco.

As it happens very few Brits have chosen to move to Monaco.

To repeat an earlier point. Many of the British rich, like Alan Sugar and JK Rowling and James Dyson and the Duke of Westminster don’t move to tax havens. Instead they stay in the UK and pay their fair taxes (as far as I am aware).

You seem to be under a delusion that paying clever accountants means you can avoid pretty much all tax.

Simply not true.

“In this paragraph you practically admit that those on PAYE cannot afford to take advantage of the same schemes as the better off. It took a while but you got there in the end.”

You constantly miss the point.

There is no scope for avoiding tax if you are on PAYE.

Doesn’t matter if you are on £20k or £1 mill.

Doesn’t matter if you hire the most expensive accountant in Britain. It can’t be done.

HMRC and the Treasury aren’t that stupid.

Nick,

To interject, and this isn’t to disagree with you, you have already admitted as much above, but this may assuage buddyhell somewhat, the rich on PAYE may also have other non PAYE forms of income they can avoid tax on, in ways they poor cannot.

Buddyhell,

Thus far you have impugned Nick’s motives, complained about having inaccuracies in what you’ve written picked up on, rather than acknowledge error. Be nicer!

Btw, I know very many self-employed not rich people, and whilst the sums involved are smaller and the methods less exotic, I can tell you they do all they can to avoid tax.

Luis enrique

Thanks.

I’m actually out for lunch and rest of afternoon. If Buddyhell wants to be more specific in his/her comment I’ll happily answer later.

Correction! I don’t actually mean all they do all they can to avoid tax – some could take cash payments and not declare the income, not everybody I know would do that. But they do do things like create companies and then pay themselves via dividends to min tax. Because that is legal and is what accountant tells you to do.

The people I am talking about are electricians and carpenters who do freelance contract work, also various media types