Tax humbug

Like most people I think rich individuals and companies should obey the tax laws in the places where they earn and spend. They should be pursued and prosecuted where they knowingly falsify their declarations, deliberately conceal income and assets that should be taxed or set up complex arrangements with the express purpose of changing jurisdictions in ways which are unlawful. Tax evasion is against the law and has to be tackled, as governments seek to do. If the Panama papers do reveal tax evasion rather than avoidance their leaking should help speed prosecutions of those concerned.

Practically all the MPs currently in full cry against tax avoidance, the legal reduction of tax bills whilst declaring your affairs honestly, avoid tax themselves. They are members of the MPs pension plan, a legal scheme to avoid tax and defer tax on a part of their income. The 25 % tax free lump sum they can draw on retirement means complete tax avoidance on those contributions and subsequent gains and income in the fund. The money drawn out as pension may be taxed at a lower rate than the tax relief they got on saving the money in the first place. All income and capital gains on their savings in the fund are accumulated tax free.

I suspect many of those MPs quick to condemn also have savings in an ISA. The sole purpose of an ISA is to avoid tax on interest, dividends and capita gains on your savings. Anyone who holds an Isa is not in a strong position to condemn tax avoidance or tax planning.

Labour and Lib Dem MPs helped set up complex financial and tax regulation in the UK between 1997 and 2015 which included new rules to train and regulate financial advisers. Under their system Financial Advisers are trained to include tax planning as part of good advice. An Ifa who did not tell a saver of the tax advantages of holding savings through an Isa would not be meeting normal professional standards. An IFA should also ask clients about future pension provision and see if they should be using their tax free allowances for pension savings.

Are these critics of tax avoidance now saying all this is wrong? If so do they now support the abolition of these common tax saving schemes? Tomorrow I will look at the vexed issue of overseas investments.

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103 Comments

  1. Posted April 10, 2016 at 5:42 am | Permalink

    The real worry is how a word like avoidance, describing a lawful approach to mitigating tax is being manipulated to convey the impression that it is somehow wrong for political purposes. We are seeing the same sort of double speak in action where “austerity” is being being widely used to describe efforts to slow down the expansion of government expenditure that has inflated by 120% since 2000 in order to avoid national bankruptcy. It’s high time the government took to challenging this practice as and when it arises.

    • Posted April 10, 2016 at 7:40 am | Permalink

      This is also revealed in HMRC’s own tax guidance notes which refer to “aggressive tax avoidance”. This seems to refer to schemes they have not thought of themselves. If they have thought of it it’s OK. It is sinister.o

    • Posted April 10, 2016 at 7:42 am | Permalink

      Indeed nothing wrong with “avoidance”. It is perfectly legal, benefits the country and indeed very sensible & highly moral. The problem for Cameron and Osborne is the absurd statements they made such as the one about “morally repugnant tax avoidance” and the likes. Publishing (and only partial information anyway) of Cameron’s tax return summary is very foolish and just likely to provoke yet more questions.

      Many sensible countries have a tax cap. Perhaps pay say £200K PA and have to pay no more tax nor file returns. Sound like an excellent scheme to me. These people are paying perhaps 10 times their share of the costs of government. It could be a badge of honour for them, I do not have the hassle of doing a tax return I just pay the cap gives me more time to work or run my business well!

      People and businesses nearly always spend/invest far more wisely and efficiently than governments do and certainly than this government does. This government even spends on things like Cameron’s EU propaganda leaflet and even offshore wind – things that do net negative harm.

      Simpler and lower taxes are what is needed, these will attract money to the UK and make these schemes less attractive to people and businesses. That way businesses will concentrate more on running their businesses rather than with their tax advisers of planning to leave the UK.

      A business that does not use efficient tax planning is likely to go out of business, or get bought out by one that does. Such as Amazon, Face Book, Twitter or countless others that we nearly all use. The Osborne needs to change the law if they think there are abuses – not mutter absurdities about “morally repugnant tax avoidance”.

      Anyway it does not matter much, Cameron is surely finished in June anyway. Clearly he does seem to sensibly indulge in tax avoidance by splitting the share/property the share with his wife for example. More question will surely follow the release as night follows day. Surely he father was probably tax efficient in order to be able to pay Cameron’s school fees and limit inheritance tax are every sensible.

      One other huge unfairness is that expenses and benefits that MPs and the Lords get tax free would be taxed as fringe benefits for anyone else – why these special rules just for MPs/Lords (and of course for EU/MEPs and bureaucrats)? These details do not seem to have been released. Also the hugely generous pension arrangements MPs, Speakers and PMs have.

      Subsidised bars and meals would certainly be taxable by HMRC for private companies. Yet the bars, restaurants and cafes in the House of Commons cost taxpayers £4.9million even back in 2012/13 – a subsidy of £7,500 per MP.

      Perhaps the could stop saying “all in it together”.

      • Posted April 10, 2016 at 7:45 am | Permalink

        Looking at MPs it is rather clear that most would benefit from rather less food anyway.

    • Posted April 10, 2016 at 9:28 am | Permalink

      Cameron deserves everything he gets and more. For decades, that longstanding judgement demarcating evasion and avoidance had been fully accepted as no more than a definitional statement of the obvious and of course tax planning and avoidance are exactly the same thing. Then Dave comes along and gives us the benefit of his moral guidance (huh!) and tries to introduce the word aggressive–obviously because some PR type had told him it would sound popular with people otherwise disinclined to vote Conservative. As so often his judgement was simply wrong and he is now tarred and feathered with it’s being all right to avoid tax if it suits him. He has come across as hypocritical at best and a lot of other words that our host would not print but conceited, pompous, self-righteous and insufferable to name but a few will do for now. If all this works in favour of Brexit, and I think it might, the way he has spread his judgements around on that, that is very fine with me. Till he can define aggressive avoidance and make it illegal, which of course he cannot because it would immediately morph in to evasion, he, and Osborne with him, should shut up–bit late now though. I’ll get back to my tax planning (joke).

  2. Posted April 10, 2016 at 5:59 am | Permalink

    England fought a civil war to establish the principle that arbitrary taxation was wrong. Now those who proudly call themselves heirs to the Roundheads are loudest in their calls for tax to be paid not according to law but according to public outcry. They are not just humbugs (though as Mr Redwood says, they are that too) but odious demagogues and dangerous fools.

    The top one per cent of Britain’s earners – 300,000 people – pay nearly a third of the income tax. They pay for the NHS by themselves. So far from being shameless tax dodgers, the rich seem to me to be extraordinarily patient and public-spirited. As their reward they are routinely blackguarded by the very people keenest to take their money.

    Adam Smith’s view is pertinent: “Little else is required to carry a state to the highest degree of opulence … but peace, easy taxes and tolerable administration of justice.”
    Isn’t it worth a try?

    • Posted April 10, 2016 at 6:38 am | Permalink

      Surely the issue is how much income tax the top one percent are legally liable for not how much they pay?

      • Posted April 10, 2016 at 7:41 pm | Permalink

        hy

        ‘Surely the issue is how much income tax the top one percent are legally liable for not how much they pay?”

        Oh dear, you STILL dont understand. Legally liable and how much they pay are EXACTLY the SAME thing. If they dont pay what they are legally liable for then its tax evasion which is a criminal offence.

        • Posted April 11, 2016 at 2:17 pm | Permalink

          It’s incredible isn’t it that people seem to struggle to get their heads round the simple difference between avoidance and evasion. Additionally incredible that this is true about people that read political blogs.

        • Posted April 11, 2016 at 6:53 pm | Permalink

          That was my point …………..

    • Posted April 10, 2016 at 9:43 am | Permalink

      eeyore

      Excellent post, totally agree

    • Posted April 10, 2016 at 11:49 am | Permalink

      The richest 1% also benift the most. The taxes they often choose to pay are not alms.
      Ian Hislop’s Victorian workers and shirkers TV programme was interesting and an eye opener for the right wing loons when he held out two buckets collecting money,one for the ‘undeserving poor’ and one for the ‘deserving poor’. The undeserving rich was not disused, but by default must exist.
      Iain Duncan Smith crying at the plight of a unemployed singe mother when interviewed by Hislop was like a quack doctor crying over the death of a patient. They should have been an fitness assessment carried out on him to find out whether he was crying or laughing.
      http://www.bbc.co.uk/mediacentre/proginfo/2016/14/workers-or-shirkers

    • Posted April 10, 2016 at 1:15 pm | Permalink

      How much of the UK’s income do these 1% earn? In excess of 30% I’ll wager especially when hidden income is factored in. How much of the wealth of the nation have they squirreled away?

      Everything Mr Redwood writes above is correct but please don’t ask me to feel sympathy for those who need to tax plan on an industrial scale.

      • Posted April 10, 2016 at 7:49 pm | Permalink

        Narrow shoulders

        You mean how much of the UK’s income do these 1% CREATE.

        The UK has zero income until these and others earn it then pay a % in tax

        I despair at the ignorance of basics of earnings and tax

      • Posted April 10, 2016 at 8:54 pm | Permalink

        Tolley’s Guide is Britain’s tax bible. It consists of four mighty volumes. The Corporation Tax section alone is 2000 pages long. The Capital Gains Tax section covers 1500 pages. I doubt that anyone, even those who oversee our taxes, can be conversant with it all.

        Without offering a shred of evidence, Narrow Shoulders accuses 300,000 people of being liars and cheats. He or she might care to consider that even the scrupulous can err when trying to follow rules of this length and deranged complexity. The wonder is that so many are scrupulous, even to their own cost and loss.

        In point of fact, by far the largest part of Britain’s missing tax is made up of the myriad petty fiddles of tens of millions of ordinary people. Estimates centre on c.£17-19bn a year. Funny how little one hears about that.

        • Posted April 11, 2016 at 7:05 am | Permalink

          @Eeyore @ Libertarian

          I stand by my accusation (for a large proportion of the 300,000) and yes small traders also “avoid tax”. Why pay when you don’t have to which is exactly my point about hidden income.

          @Libetarian – Accusing dissenters of ignorance does not make you right. To your limited knowledge I may be employed in the tax planning industry with first hand experience. Or I may just be a disgruntled peasant in the sidelines. Without knowing your argument is flawed.

          The system allows some to choose how much they pay.

          • Posted April 11, 2016 at 10:37 am | Permalink

            Dear Narrow Shoulders

            I know that you aren’t employed in the tax industry , for the simple reason that you display your ignorance of the subject quite openly.

            Please tell us what taxes all these businesses are avoiding, please provide a shred of evidence. Please explain with your vast knowledge of taxation why you think that 300,000 people that are wealthy are cheats ( even though its perfectly legal and within the rules) whilst not mentioning the more than 5 million black market workers/cash in hand mob not handing over the nearly £20 billion a year they fiddle ( which is a crime).

            Then with your knowledge of the tax system explain why 31 million people also legitimately avoid taxes by the simple expedient of having a pension or an ISA.

            Further more please explain why the vast majority of the population have money invested in overseas and offshore investment vehicles ( including every single MP through the MP’s pension fund) via their pensions and this isn’t a problem, but rich people doing the same is.

            Please explain WHICH of the vast array of taxes some are able to choose.

            Income tax? Capital gains tax? Inheritance tax? ,VAT? Business rates? Corporation tax? Stamp duty? Fuel/energy duty? Employers NI, Autoenrolment tax.

            Stop talking nonsense

    • Posted April 10, 2016 at 6:13 pm | Permalink

      What is GARR (General anti-avoidance rule) but arbitrary (after the event) taxation. It results in a huge damage caused by the uncertainties which deters many investments.

      A sort of Robert Mugabe tax in essence, you owe what we say you owe or will will take it anyway mate.

      Almost as damaging as his national living wage.

  3. Posted April 10, 2016 at 6:19 am | Permalink

    Overseas business is a generic term..is it not? Depends on the area in which that business is conducted, so there may be a requirement to pay tax at source. Think we all understand that and its fiddly bits.

    Suspicion automatically arises around trading of certain items. However, where investments are concerned and traceability of such is deliberately obscured we automatically have a worry. What has that money been doing for instance and who with…tax is a separate issue and always attracts specific concerns.

    All very legal maybe…not so innocent perhaps?

    I was non resident for tax purpose for 10 years and had an off shore bank account. That was in the 80’s and it was said at the time that the likes of me dumping money into a UK bank account periodically wasn’t too welcome. Never quite understood UK banks.

  4. Posted April 10, 2016 at 6:33 am | Permalink

    Take the definition of tax avoidance offered in 1997 by the Tax Law Review Committee which included Francis Maude MP amongst its members.

    “We have regarded tax avoidance (in contra-distinction to legitimate tax mitigation or planning) as action taken to reduce or defer tax liabilities in a way that Parliament plainly did not intend or could not possibly have intended had the manner been put to it”.

    This seems to me a perfectly reasonable definition. It clearly shows that ISAs or pensions are absolutely fine- since Parliament’s intention was to encourage you to save money in these ways.

    At the same time- there are many other activities which would meet this definition as being tax avoidance.

    I don’t think this is all that difficult a distinction to make.

    The fact that so many otherwise intelligent people seem either unaware or unable to recognise this (when the general public clearly does) seems suspicious.

    I look forward to your thoughts on overseas investments.

    Reply How do you distinguish between tax avoidance that government “intends” and that which it doesn’t intend? Parliament probably does not intend people to work less to avoid Income tax, but you shouldnt prosecute people for failing to earn more.

    • Posted April 10, 2016 at 7:18 pm | Permalink

      I am obliged to RK for this. Having thought there were only two categories – tax avoidance and tax evasion, I now learn there are three – evasion, avoidance, and mitigation.

      The difference between the second and third appears to depend on the individual taxpayer’s divining, by some process of profound mystic insight, what Parliament really meant to say, had it troubled to think about it and express itself clearly instead of just rambling round about a subject.

      This is certainly one way of doing things. One is reminded of Stalin’s endearing trick of making a law and then not telling anyone what it was, so they didn’t know whether they were breaking it or not. But that didn’t stop them being hauled off to the Lubyanka and beaten to death.

    • Posted April 11, 2016 at 5:07 am | Permalink

      Indeed lots of people are not moving home because of Osborne’s absurd levels of stamp duty, is this morally repugnant avoidance?

    • Posted April 11, 2016 at 6:15 am | Permalink

      It doesn’t seem that difficult to determine that an ISA is intended to allow you to save tax free. It’s literally the first sentence on the government website about ISAs. It’s included as an example under the GAAR (General Anti Abuse Rule) guidance from the government as something that is fine and not prohibited.

      At the opposite end – (alleges a company with internal loans books more profit to Luxemburg to save tax ed) is it really that hard to see this as tax avoidance?

      In response to Mr Redwood’s query… I suppose I can imagine that in a very limited number of situations there might be a grey area. I’d leave it to the courts to decide. His example is very clearly not a grey area however.

      Parliament clearly does not intend to force people to take higher-paid jobs if they don’t want to, and it clearly does intend that people who earn less money should pay a lower tax rate.

      Eeyore sees this as reminiscent of Stalin. Well a general anti-avoidance rule was proposed by George Osborne, and has previously been supported by representatives of corporate giants such as PWC, Ernst & Young and Deloitte. If these people are Stalinist in their political leanings- I think that says more about him than it does them.

      Reply I still think the only relevant distinction is between illegal tax evasion and legal tax avoidance. If people and lawmakers think some forms of avoidance should be made illegal then the simple answer is to change the law.

      • Posted April 11, 2016 at 12:56 pm | Permalink

        Dear rk

        How about instead of government writing simplified tax legislation or the population at large understanding that theres no such thing as tax avoidance, why dont we just employ you to go around deciding what was fair and what not?

        You could even have a test for it , anyone suspected of tax avoidance that wasn’t intended by the chancellor who wrote the legislation , in your opinion could be tied up and thrown in a pond. If they float they’re a tax avoider and should be burned at the stake. If they drown then it was legitimate use of tax planning.

        I’m sure we could even think of a name for the regulated department

        How about Worldwide Investigative Taxation Compliance Honesty Finders

        You could even put yourself up for the post of W.I.T.C.H Finder General Manager

      • Posted April 12, 2016 at 4:27 am | Permalink

        Apologies- didn’t mean to write something that would get the blog/you into trouble. Thanks for editing fairly Mr Redwood MP.

    • Posted April 11, 2016 at 7:34 am | Permalink

      That’s the trouble with a complicated tax system, it has the potential to have too many unintended loop holes.

      Simplify the tax system and you reduce the opportunity for those

      ” tax liabilities in a way that Parliament plainly did not intend or could not possibly have intended”.

      Are you listening Osborne and Brown….?

  5. Posted April 10, 2016 at 6:50 am | Permalink

    Absolutely right, humbug is what it is. A general conclusion is the simpler tax systems are, and the flatter rates are, the less avoidance is needed to create desired incentives (for saving, investment etc). Mr Osborne has not been a reforming Chancellor in the Lawson mould in this regard unfortunately. He has also unwisely opened up for subjective assessment of the rights and wrongs of tax by criticising “morally repugnant tax avoidance”. He’s in charge – let him deliver a simple clearly understandable tax system which is internationally competitive. Tax is either due or it’s not according to the law. There Should be no place for populist posturing over subjective judgements.

  6. Posted April 10, 2016 at 7:04 am | Permalink

    The disruptive, the power hungry, progressives, SJW and Green elements in society know how to disrupt and find favour. It’s easy play on peoples emotions. They offer bribes usually those they bribe with their own money. They play on peoples envy, greed, fears and feelings of entitlement. Which all leads to mindless mob rule and and the clamour for blood. Fine, almost as mob rule is never a good thing, if it was just the guilty that were targeted and done so because rationally acquired evidence proved them guilty. Guilty or innocent is all the same to them and as for proof they do not let those things get in the way of achieving their aims. Aims that usually means vested interest minority groups controlling the rest of us.

    As you point out nobody likes paying taxes and all of us if given the chance will find ways to avoid paying it. Legislators in their wisdom have produced tax laws which allow us to avoid paying tax under certain circumstances. We do so quite legally and should be beyond reproach for doing so. Those who say differently are really not decent rational human beings.

    Tax evasion is an entirely different matter and the full weight of the law should be deployed on those who practice it. As for unfair tax laws that the mob clamour about the most when decrying tax avoidance. Well that is a matter of debate after proper scrutiny of those tax laws and should not be subject to mindless blanket condemnation. Tax laws have not only to be there to ensure the collection of taxes they also are designed to effect certain other outcomes. It is those outcomes that need addressing if they are found to be undesirable. The way is not to go after the innocent as they are doing as they are only obeying the law but the legislators and demand they change what is perceived to be bad legislation.

    The hypocrisy of it all is astounding. People should step back and take a long hard look at themselves. In doing so I am sure they will not like what they see.

  7. Posted April 10, 2016 at 7:10 am | Permalink

    I think it would have been easier all round if Cameron and Osborne had been less dishonest in castigating and confusing tax avoiders with tax evaders. Hoist on their own petard comes to mind.

  8. Posted April 10, 2016 at 7:28 am | Permalink

    I think we need a simpler tax system, one which gives the man on the Clapham omnibus similar scope to minimise his tax liability as the man driving past in his Roller, who finds it worthwhile to pay specialists to arrange his affairs and who can afford to do so.

    • Posted April 10, 2016 at 6:20 pm | Permalink

      Indeed the costs of compliance with an absurdly complex system are a huge additional tax on top of taxes themselves. These costs are just dead money and do not even raise any tax. They are a huge wast of everyone’s time and a distraction from your real business. Simpler taxes would make everyone (but a few tax advisors and accountants) far better off and more productive.

      • Posted April 11, 2016 at 11:39 am | Permalink

        HMRC may consider tax avoidance as ‘aggressive’. To the tax payer it must seem defensive. A good example of the increasing complexity, requiring employment of accountants appeared in our local landlords association newsletter today. I read it three times and think this is correct.

        The changes to tax relief of mortgage interest will take place over 3 years. The whole of the rent which should be obtained now has to be declared on the annual return and any non payment by the tenant has to be declared as a bad debt and claimed in another return later.

        Then the rent is taxed with no interest relief and a rebate will be made on the assumption that the landlord is paying tax at the 20% range. If the landlord is in the 40% range, the higher tax paid will not be deductable. But the whole rent on top of pension and other earnings may put some landlords into the 40% range, when previously their net earnings were in the 20%.

        But it doesn’t stop there. Not complicated enough! The changes will be phased in gradually over three years with different amounts and rates applying. The society suggests that self assessment may require an accountant from now on for anyone with borrowings. It is also suggested that landlords with higher end borrowings may like to get out now rather than be ruined. Apparently 1 in 7 in the English housing survey already plan to do so.

        Landlords with high borrowings may find that they are now about to be paying more tax than their earnings, even if expenses such as certification, damage repairs, voids etc are not included.

        And just for another twist from Gideon the Simplifier, the 10% allowance for wear and tear will no longer be applicable. In future every item to be replaced or repaired will have to be accounted for separately.

        Unfortunately, this is not made up or a satirical post.

        re SLA Newsletter aprril 2016

        • Posted April 11, 2016 at 11:46 am | Permalink

          Please note that on the conservative home site> Osbo is now by far the most unpopular member of the cabinet, even beating Dave. Wonder why.

  9. Posted April 10, 2016 at 7:40 am | Permalink

    Complexity of the entire tax system is the reason for “so called” manipulation.

    Differing tax rates within the system lead to income being disguised/moved under a whole range of headings.

    The fact of the matter is very simple.

    Those with money can afford a wider choice of anything they purchase, be it houses, clothes, food, cars, holidays, booze, entertainment, pensions, health treatment, cosmetic surgery, accountants , or tax planners.

    Thus the larger your income the larger your choice of where and what to spend it on.

    This has always been the case, and always will be, as that is the advantage one has of of living in a relatively free and non communist society, which provides encouragement for hard work and success.

    Is it really a surprise that with such a complex tax system being formed by the Worlds politicians, that some can afford to pay for advice on how best to legally keep their tax bills lower than others.

    The power is with the politicians, if they do not like the present rules then change them to a more simple structure/system so that it is more easily understood by everyone, and can then be enforced properly.

    The answer is so bloody simple really, the cause, the problem and the solution is with the politicians, who simply just seem to want moan about it, probably because it ultimately means they have less to spend on what they want to do with our money.

  10. Posted April 10, 2016 at 7:44 am | Permalink

    We shouldn’t mind tax avoidance – but we shouldn’t care for advice from people on state generosity who avoid contributing to that generosity.

    If you are remotely leftist then, by all means, pay as much as you can into the system. If you don’t then you’re no leftist.

    • Posted April 10, 2016 at 7:47 pm | Permalink

      Leftist usually just want other people to pay more taxes not themselves.

  11. Posted April 10, 2016 at 7:49 am | Permalink

    Cameron and Osborne must accept much responsibility for the furore, as they have helped to create it. They started by being oh so clever, they thought, by responding to protests about the rich by saying they will go after tax evaders and tax avoiders. They preface the latter with the word ‘aggressive’ to give the action an aura of legitimacy, because avoiding tax is legal however it politicians may decide to describe it.

    This was done as a short term reaction to boost their own popularity and to buy off criticism, another of their many acts of weakness. They constantly hand weapons to their opponents.

    ‘Aggressive’ is now being dropped in popular reporting and thinking and things are coming back to bite them, and the innocent are being wrongly accused and tainted.

    It’s what happens when people act as smartarses rather than as principled leaders.

  12. Posted April 10, 2016 at 7:51 am | Permalink

    David Cameron has published his tax returns. Now I think (words left out ed) Margaret Hodge MP should publish hers. Tom Watson……………. maybe he will to. Labour may have opened a Pandora’s box that they may live to regret.

  13. Posted April 10, 2016 at 7:53 am | Permalink

    ” is funded”

  14. Posted April 10, 2016 at 8:15 am | Permalink

    Of course the provision of 10 Downing Street as living accommodation would would be a taxable benefit in kind (perhaps £150K PA for any normal employee).

    I cannot provide free accommodation for my employees, without them paying tax on the benefit of them but the HMRC has special rules for MP’s, Lords and others.

    • Posted April 10, 2016 at 6:32 pm | Permalink

      You can’t pay employees’ trains fares to work either, same thing. The EU is even worse, they get a mileage allowance to Brussels from home rated higher than any first class ticket on rail or air and no receipts required.

      • Posted April 11, 2016 at 5:10 am | Permalink

        Plus top rates of tax of just 16% for many EU officials.

  15. Posted April 10, 2016 at 8:17 am | Permalink

    All you say is true and I agree, there is too much hypocrisy in much current comment. No doubt “Blairmore” triggered this piece. By all accounts it was set up within the law as it was. I am quite prepared to believe the PM, in that all his disclosures have been above board, and their drip feed hesitancy was occasioned by a desire to keep his obviously wealthy family clear of grubby politics. It was bad judgment because it was not seen that way.

    I think that any resentment is caused among the 95% of the tax paying public because they do not have the means to take part in such schemes. You need serious wealth to do so. There is resentment to seriously wealthy non-doms who only pay a nominal amount of tax, even though they might bring considerable wealth to the country. There is resentment of large companies trading in the UK while incorporating in tax havens. Not least because they have a tax advantage over small companies in the same field.

    Post the Referendum, a new Conservative government, and I sincerely hope the result leads to one, needs to address the subject of taxation. It needs simplification and clarification as dealing with it has become an industry in itself.

    • Posted April 11, 2016 at 7:37 am | Permalink

      How odd that the Heir to Blair gave us more of the same or worse and invested in Blairmore.

  16. Posted April 10, 2016 at 8:17 am | Permalink

    Good morning.

    The solution to reduce or abolish tax evasion is the have a very low tax regime. This require small govenrment and the market sector taking over many duties and responsibilities. Whilst we have a govenrment that believes in; “Sqeezing until the pips (the people) hurt”, we always find other people, usually the very wealthy, moving their monies offshore.

    It is my belief, that there are those who would lihe the people to like under a Communist style govenment. To fashion such, they will need large sums of cash. This can be done through printing, borrowing and taxation. All of wich the Left have tried to disasterous effect. And we seem to be heading in that direction both with our own, so called, Conservative government and the EU.

    My last point is to pick up our host on one small point. He mentioned the Labour and Liberal Democrat governments between 1997 – 2015. Is trying to either tell us something or, is he being; “Economical with the actulite ?”

    😉

    Reply I was making the point that a Labour government introduced financial regulation that required advice on tax planning and Lib dem Ministers in the Coalition continued with it.

  17. Posted April 10, 2016 at 8:50 am | Permalink

    You make a fair point distinguishing avoidance and evasion.

    The issue though is whilst it may be legal to avoid UK tax by placing funds in offshore tax havens, should it be? Is there not something morally questionable when that is done, particularly if it is done by those lecturing us and imposing upon us forms of austerity demanded by the poor state of the government finances?

    Offshore tax havens also typically facilitate secrecy and cleaning them up is a long overdue and huge task but I cannot see why it should not be attempted.

    Reply A resident UK taxpayer cannot avoid UK tax by placing funds in offshore investments – you pay income tax and CGT on such investments and the distribution between the jurisdictions is usually governed by a double taxation agreement.

  18. Posted April 10, 2016 at 8:54 am | Permalink

    Once again we are where we are because we have a Conservative Government that is not prepared to stand up for what should be its core values. Mr Cameron is himself very largely to blame for the predicament in which he finds himself because of his ‘Holier than thou’ statements regarding offshore investments and then the shifty way in which it came to light that he had held some, which apparently had failed to appear in his list of declarable interests. I thought when I heard the story that his father appeared among the clients of Mossack Fonseca, that he had set up some dodgy personal investment fund, instead Blairmore seems to be a fund set up and run for the clients of Mr Cameron senior’s firm. The Prime Minister says that he would have been liable for Capital Gains tax on sale had the gain exceeded his annual exemption so presumably the fund had ‘Distributor Status’ (ie it undertook to distribute at least 85% of it earnings as dividend) or the entire gain would have been liable to income tax. There must be millions of British subjects invested in such funds and Mr Cameron could have saved himself a lot of trouble by being frank from the start.
    The only question that anyone on either political side should be concerned about is whether the law has been broken, and that is the word of the law, which is the only thing that counts. If it has of course the proper process should be followed. If it has not, any words of criticism are totally hypocritical; if the politicians do not like what happens under the laws they impose, it is within their power to change them, and that is what they should do.
    A government, or political party that expects the subjects of their country to pay as much as a penny of tax more than the law requires, is at least as bad as the subject who illegally pays as little as a penny less. A Government that was interested in justice and freedom for its citizens would jhave made this point from the start.

  19. Posted April 10, 2016 at 9:11 am | Permalink

    The UK has a world renown legal system which safeguards real and financial property ownership. So good, a lot of foreign countries draw up contracts under English law, enforceable in English Courts.

    So why would you want to hide assets and income in any other, lesser, legal jurisdiction?

    “Quite simply, Offshore Trusts provide complete and absolute confidentiality. Assets and title to property, for example, are put into the trust for the trustee to manage. This affords total privacy as it is not possible to discover the owner of the assets and the subsequent benefit of this is that there is the additional benefit of absolute protection from liability. This is how offshore asset protection can be cast in stone. Whilst the legal title passes to the trustee, the intent of the trust is to provide for the beneficiaries, of which the settlor may be a named person. These beneficiaries, hold very strong rights with respect to the interests in the trust and most jurisdictions recognise that the intent is to provide the defined benefits for the these beneficiaries and, in court cases, rule favorably in their direction when questions as to the management of the trust arise.

    Because these Offshore Trusts are almost always found in offshore tax havens or in low-regulation offshore jurisdictions with reputations for offshore asset protection and superb confidentiality, the Offshore Trust also benefits from these features. Assets managed by Overseas Trusts are, in the main, free from tax which is applicable in a settlor’s home country or jurisdiction, such as the UK. If the trust is formed to provide for the benefit of the children or heirs of the settlor, for instance, the Offshore Trust may provide a vehicle to protect against intense inheritance scrutiny and taxation.

    Moreover, Offshore Trusts offer unparalleled confidentiality when formed in low regulation offshore financial centres plus increased protection from the threats of civil litigation and liability, and even from divorce or business dissolutions. It is extremely difficult, except in situations of accusations of a severe criminal offense, for an outside entity to pierce the confidentiality shield surrounding an Offshore Trust in most offshore jurisdictions.” (offshorecompany.co.uk).

  20. Posted April 10, 2016 at 9:14 am | Permalink

    Unattractive for MPs to round on say Mr Cameron or one another about earnings and tax.

    A number of people do not earn anywhere near the basic MPs’ salary of £74,962. It is a double-edged sword when a leader of such MPs gets rather too personal in his silly anti-capitalist stance,- demonstrates an actual/ real loss of touch with the poor in our society.

    But the main fault lies with our educational system.Also the probable worldwide acceptance that people with money and success are mainly in place so everyone else can rejoice in their fall from grace.

    The role of money; the workings of capitalism; hedge funds and Trust funds,- how our pension funds even those in Local Authorities at all levels make use of what some people call “tax-loopholes”; the investment in Icelandic banks by some Local Authorities should be learned as a matter of course in schools.

  21. Posted April 10, 2016 at 9:27 am | Permalink

    The Tax system is overcomplicated and always a burden to the individual or company ; the system itself breeds specialists who make a substantial living advising others on how best to arrange their affairs . All sorts of perks have been possible in the past and , possibly , now . Auditors have always given advice about accounts – how to maximise the benefits to shareholders and company employees . If the system were not so complicated this would not be the case and life would be easier and less frustrated .

    I have long been an advocate of indirect taxation – if you make a purchase you pay a proportion of tax ; if you don’t , you don’t pay a tax . The volumes of tax regulation produced every year are beyond the skill and patience of the ordinary individual ; I have never been capable of making my own annual tax return and have had to use an adviser to do so for me . The burdens of life are many and hazardous ; time is precious and best directed to ones’ priorities .

    I believe that those in public office should always be squeaky clean ; failure to measure up to the highest standard should always be severely punished and publicised . Cameron should not be made guilty for his fathers’ activities , nor should he try to hide from the consequences . As things stand now , every Minister and MP should publish their financial affairs or resign . The public demand fairness for all . My feelings apply equally to those who are alive and have benefited from holding previous public office positions .

  22. Posted April 10, 2016 at 9:57 am | Permalink

    It does seem that Cameron has benefited from reduced death duties of some £70,000 by some very sensible and entirely proper tax planning by his parents. Hopefully this will draw attention to the blatant ratting by “morally repugnant” Osborne on his £1M IHT promise, made many years ago.

    Peter Hitchens today has it exactly right:

    Payback time for the tax zealots

    David Cameron has only himself to blame for the fix he is in. He and his Chancellor have ceaselessly blurred the huge difference between criminal tax evasion and legal tax avoidance.

    Also Hitchens is spot today on the dreadful direction of political indoctrination in soaps like East Enders, Grange Hill and Coronation St, an excellent piece.

    http://hitchensblog.mailonsunday.co.uk/

  23. Posted April 10, 2016 at 10:03 am | Permalink

    JR: “The sole purpose of an ISA is to avoid tax on interest, dividends and capita gains on your savings.”

    Tax avoidance is a moral imperative.

    The State isn’t the moral agent the Left claims it is.

    It’s spending exceeds it’s ability to raise money through taxation. Any private individual that behaved in this way would soon find his/her ability to raise money by borrowing, severely curtailed, or the interest rate become prohibitive.

    Now, the State is forcing people to liquidate their ISA accounts, by driving interest rates lower, what is the point of a 1% interest rate when the State sets the inflation rate at 5%?

    Cameron is a crook and a hypocrite. That the administration he is the head of has no backbone and no ability to lead, is a direct result of his lack of character.

    He has failed to make the case for a low tax economy, he has failed to reduce public spending and gerrymandered the interest rates so that the government can continue to deficit spend.

    In short he is repeating the same folly of other regimes throughout history before they collapse.

    This from a man who has had one of *the* most expensive educations available to anyone in the Western world.

    And of course, Redwood supports him and his administration – pretending and presenting Cameron as a EUrosceptic small government ideologue, when the actuality is the opposite.

  24. Posted April 10, 2016 at 10:18 am | Permalink

    Unrelated to the article but important to Brexit:
    Christopher Bookers’ Column today is saying that: ‘Brexiteers are spurning their only chance of victory’. It is his opinion that Vote Leave is not putting forward an exit plan, when there is one staring itself in its’ face, (namely ‘Flexcit’), although the hierarchy at the Telegraph won’t allow him to use the name ‘Flexcit’ or Dr RAE North, presumably because of their own agenda.

  25. Posted April 10, 2016 at 10:28 am | Permalink

    The smell of humbug is not nice.

    HMRC are steadily becoming more and more ruthless. They have abolished interest on tax paid in advance, yet encourage self assessment to do just that. Their staff also have an incentive scheme which, like most such schemes, can have questionable results – eg doctors being paid for prescribing statins.

  26. Posted April 10, 2016 at 10:33 am | Permalink

    There is one point that I would have to disagree.

    It is children being used to avoid taxes by assigning shares to the children via a trusts by the grandparents.

    The dodge is as follows. Granny and Grandpa set up a trust. They create a new class of shares in their business which ensures that the children will receive enough money to pay for their private education and luxury holidays. Let’s say £15,000 per year. The shares are then put into a trust and the child made a beneficiary. The £15,000 is paid to the children and taxed at 40%. So the children receive £9000 at the start of the year. Then the children reclaim the £5,000 in tax. Note: as £5000 is taxed at 20% the children pay £1000 in tax.

    This scheme gifts the grandparents £5,000 in non payment of tax to cover half the private school fees. The shares are also gifted to the children to avoid inheritance tax at a later date.

    This is all perfectly legal.

    However what this arrangement does is keep wealth in the “owning” classes. The middle classes who have to pay from a salary cannot do this and struggle to pay school fees.

    The bit that seems wrong is that if a child of a rich parent goes astray then the grandparents can afford to keep the wealth in the family by providing a private education at half-price for the grandchildren.

    I would say if children cannot own shares then they should not be allowed to “effectively” own shares via trusts.

    I think this scheme is one of perpetuators of wealth and blocks meritocracy in the UK.

    The problem is half the MPs, the media and all the business men are at it too.

    (Specific comments on Mr Cameron’s tax affairs which look to be inaccurate deleted.)

    Reply This site does not provide tax advice and I am not sure what you are proposing is either possible or legal.

  27. Posted April 10, 2016 at 10:39 am | Permalink

    Off-topic, from a letter published in the Sunday Telegraph today I see that we are lucky enough to have an MP with the preternatural power to see through the mists of infinite future time and reassure us that “We will never join an EU army”.

    Who was it who said that “Never is an awfully long time”? Or maybe I’m thinking of “A week is a long time in politics”?

    Of course what he really means is that “On a plain reading of the present EU treaties we cannot be legally compelled to join an EU army against the will of our government and Parliament”, a similar position to “We cannot be legally compelled to join the euro”; but that doesn’t mean that either of those events will “never” happen, it would just need MPs like him to decide that they will happen, whether or not the rest of us wanted that; indeed if we voted to remain in the EU I would expect both to happen in due course.

    • Posted April 11, 2016 at 8:46 am | Permalink

      I think Cameron is simply being disingenuous, as the plans for European Defence and a European army seem to be well beyond embryo stage. I believe that a vote to remain means that we will have no option other than to become part of it eventually. I note how the EU has just completely disregarded the Dutch vote on the Ukraine treaty, and are apparently proceeding with it regardless (Express yesterday). I don’t know what Cameron conceded to Merkel in terms of dropping opposition to a European army during his “renegotiations” – something that the D Telegraph suggested would happen:

      http://www.telegraph.co.uk/news/worldnews/europe/eu/11861247/Merkel-expects-Cameron-to-back-EU-army-in-exchange-for-renegotiation.html

      I also glanced at this Centre for European Policy Studies report on European Defence, and my heart sank. The complexities and the added bureaucracy it would entail are of nightmare proportions (quite apart from the key issue of MS losing sovereignty completely over their armed forces).
      https://www.ceps.eu/system/files/TFonEuropeanDefence.pdf

      The activities of Brussels (and local government also, I think) fit perfectly into the explanation afforded by Thomas Sowell about how bureaucracies thrive and develop:
      Sowell: “You will never understand bureaucracies until you understand that for bureaucrats procedure is everything and outcomes are nothing

      • Posted April 11, 2016 at 4:51 pm | Permalink

        Well, the letter was from Nichola Soames.

        Interesting admission in your second reference:

        “But in spite of more than ten years of learning by doing, the EU is
        currently not able to enhance the security of its citizens or to contribute
        effectively to countering threats and breaches of peace and stability in its
        strategic neighbourhood, or indeed in the wider world.”

        Strange, I’m sure I’ve read somewhere that we’re safer in the EU.

  28. Posted April 10, 2016 at 10:56 am | Permalink

    I totally agree. I am also opposed to the suggestion that all MPs publish their tax returns. The consequences are horrendous as we would end up with representatives who do not reflect society. People with successful business backgrounds and wealth would never become MPs.

  29. Posted April 10, 2016 at 11:36 am | Permalink

    If I someone flew in from abroad with say with a million pounds in cash and no story of where it came from and how I came about this money would this be morally and legally right, a private matter for myself? I think not.
    Would it be “a wonderful fillip” for property sales, funding for shops, car sales, services and the local economy. Of course it would. So why does the state interfere in this ‘private matter’ and should we do more to help people with massive amounts of cash coming here? What business is it of the state where they got it from, how and why should they pay any tax on this money when it came from abroad without using any of Britains services and infrastructure. The rights main argument in fact. that the money would just ‘trickle down’ to the masses. Funny how it does not and in the case of the property market makes life even harder for the fist time buyer.

    Reply Yes it does matter. Those thinking of accepting the money for investment here need to know where it came from, as they should not accept proceeds of crime money.

    • Posted April 10, 2016 at 7:56 pm | Permalink

      More abject ignorance from Bazman

      There are already anti money laundering system in place, any monies arriving here has to be accounted for. Someone arriving with a suitcase of used notes would not be able to open bank accounts etc etc . As with any other form of crime , crimes can operate on the black market of course , but Bazman seems to think that anyone with money stole it.

      Trickle down is a left wing myth by the way. No free market person has ever believed in trickle down. Its not necessary for a start .

      • Posted April 11, 2016 at 4:29 pm | Permalink

        OK we will call it the horse and sparrow theory and maybe you could explain what possible reason could there to be to buy a property using an offshore company and what possible reason there could be to buy a property from a tax haven? these properties are all over the country even small terraced houses and roof spaces!
        Your laughable naivety that a suitcase of cash could not be laundered easily in London. Not they have too do this. They just place it in a dodgy bank in a tax haven such as Panama. Placement. Then a series of complex transactions in several offshore company names is used to make it difficult to trace. Layering. UK professional services such as lawyers and accountants facilitate the hidden money into the UK. Enabling. The criminal then uses the money to purchase UK property, art and luxury goods to integrate the money in the UK. Integrating.
        The reason why most of the offshore funds and tax havens exist. To evade/avoid tax and to launder money.
        More bluster and apologist nonsense from you and you can be sure the voters are getting wise to this multi layered dross as the same people savagely cut benefits/services and increase taxes for the rest.

        Reply You describe the crime of money laundering – people doing that will be prosecuted when the authorities find the evidence.

        • Posted April 13, 2016 at 5:34 pm | Permalink

          Bazman

          The fact that you can’t distinguish between a crime and legitimate business is laughable. You really are clueless.

          On December 11 2012, the Government published draft legislation outlining new taxes and charges which will have to be paid by offshore companies which own property in the UK.

          The main features of the legislation affect properties which are valued at more than £2 million and which are owned by “non-natural persons”. (This is a reference to foreign companies, partnerships, funds and the like, not to persons with strange personal habits.)
          Previously many foreign buyers of UK property have chosen to register their properties in the name of an offshore company in order to eradicate UK inheritance tax (IHT), which would otherwise be charged at 40 per cent on the whole value of the property, after allowances, upon the death of the owner. Offshore company ownership also facilitated the avoidance of stamp duty (SDLT), as any subsequent sale of the property could be affected by a transfer of the shares in the company, leaving the title to the property in the UK unaltered.
          But all that has changed. Offshore companies which own property worth over £2 million will now be faced with:
          1. An annual charge of a minimum of £15,000 and a maximum of £140,000 depending on value. The new tax is called Annual Residential Property Tax (ARPT).

          2. Capital Gains Tax (CGT), which was previously not paid by non-UK resident sellers, be they individuals or companies, will be charged on resale at a rate of 28 per cent.
          New offshore company purchasers will also pay stamp duty at 15 per cent, whereas natural persons will pay stamp duty at the bargain rate of only 7 per cent.

          Maybe rather than drivel on about subjects you know nothing about you should bother to check some things first. Maybe ask the birds, they seem to know more than you

  30. Posted April 10, 2016 at 11:39 am | Permalink

    If you’re going to spend £9m on biased leaflets then at least have the decency to pay as much tax as you can towards it.

  31. Posted April 10, 2016 at 11:44 am | Permalink

    Just to complicate/broaden matters further, I see in Sunday Times:
    “Britain has given more than £400m in aid money to 18 countries regarded as tax havens, including Panama — which even received cash from the UK taxpayer to fund a study into the impact of climate change on turtles. The central American country at the heart of the world’s biggest data leak — the so-called Panama papers — has been handed at least £6.3m in UK aid over a five-year period” .

    Why on earth are we funding turtles when we can’t look after our own elderly, sick, poor and more? Where are our Government’s priorities? Apparently not with the people of the UK.

  32. Posted April 10, 2016 at 11:59 am | Permalink

    Interesting right wing take on David Cameron’s tax affairs. Oh how you would all sing it was Jeremy Corbyn in the Telegraph. Same rules.
    http://www.mirror.co.uk/news/uk-news/david-cameron-should-realise-paying-7714927

  33. Posted April 10, 2016 at 12:27 pm | Permalink

    They are hilarious. Human beings. No matter what wealth they possess; no matter how much money they have; no matter how high their salaries; we get Mr Corbyn saying on TV-:

    ” I ONLY have the salary which I get as MP ”

    Mr. Corbyn actually looked sincere. He always sounds sincere. No doubt he is sincere. No doubt he is honest.
    One wonders if , when he provides as promised his own statement of income, taxes paid, the £50 note will drop? Or will his “wonderful young people with great socialist ideals” need to NOT chant his name at his public meetings but wearing Che Guevara tee-shirts, shout him down?
    Judging by his noticeable belief in what he is saying over 30 years,- on ONLY the salary of MP, he may need to go into a dark place and think things through.
    Solzhenitsyn wrote: –
    “Question: What is the fastest thing on Earth? Answer: Thought, it is and it isn’t. But it can be slow too. How slowly do people and nations come to understand what has happened to them.”
    It was OK for Che Guevara with a big cigar in his mouth, to lead the impoverished masses. Cigars, everyone had them. Not everyone has the amassed wealth of 30 years of the salary of your common-or-garden MP. Oh they earn it. But legitimate earnings, “a fair days work for a fair days pay” is not Karl Marxist nor Jeremy Corbynist but Harold Macmillanist.

    Reply Mr Corbyn of course also has the salary of the Leader of the Opposition and the support and expenses which go with that.

  34. Posted April 10, 2016 at 12:43 pm | Permalink

    Is there any truth in the report in S Times and MOS that David Cameron has offered Boris Johnson a top Cabinet job, and Michael Gove a much more senior role than at present, after the Referendum, in order to prevent Johnson trying to oust him as leader?
    To me, this seems more unacceptable behaviour from Cameron. He should be interested in what is best for the whole conservative movement, and not in simply clinging on to power.
    http://www.dailymail.co.uk/news/article-3532298/David-Cameron-offers-Boris-Johnson-Cabinet-job-plot-stop-London-Mayor-ousting-PM-EU-vote.html

  35. Posted April 10, 2016 at 12:46 pm | Permalink

    Regarding my comment above about Johnson and a possible job offer from Cameron, it goes without saying that I feel that Cameron should put the interests of the UK first before his Party, and his Party interests before his personal interest in apparently trying to cling onto power regardless.

  36. Posted April 10, 2016 at 1:11 pm | Permalink

    Not only do we have the humbug of politicians/media referring to tax avoidance and evasion as if they are one and the same, we also get a load of pious humbug about the “moral” need to pay more tax.

    Lord Clyde provided excellent guidance on these matters in 1929 – “No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer’s pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue”

  37. Posted April 10, 2016 at 1:12 pm | Permalink

    I wonder what this tax humbug was about, now it because clear with the start of a save dave campaign underway within the con party with leading out campaigners, minster for justice and the London mayor playing on both sides, that about 30 con party left for the out campaign as the in side whittle away opposition for out.
    Dave and the con party come first the country and the people come second.

  38. Posted April 10, 2016 at 1:28 pm | Permalink

    This referendum is turning into fight of who control the tory party instead of a fight about who controls the country.

    • Posted April 11, 2016 at 8:09 am | Permalink

      Is that not what Cameron has made it?

  39. Posted April 10, 2016 at 1:33 pm | Permalink

    Why are you concentrating on personal taxes? I doubt many people are in a lather over pensions, ISA’s etc. as they are open to all people if they have sufficient money. This current row is just political and the people doing the shouting are not the people in the saloon bar of the Dog and Duck, but the inhabitants of the juvenile House of Commons who hope to get some silly passing point over, as they don’t have a proper job with enough to occupy them. There is a perceived unfairness among the populace that certain things are available to the rich but not to them and as the gap is widening there is merit in this assumption.

    The big problem and where this all started is the big corporations who undoubtedly turn over billions of pounds from the people of this country, but are unwilling to pay their fair share back to the land they made it in and go to elaborate lengths not to do so. This is also tax avoidance and is legal, but is it right? Worse is that the government assists them by doing sweetheart deals and allowing some of them to choose how much they would like to pay in order to try to buy off public opprobrium. This is where government attention is required, not by showing CMD has paid his personal taxes which are trifling in comparison.

    None of us here have the slightest clue as to what the super rich do and the fact that they pay a lot of income tax is hardly surprising as they have most of the money. The CEO of a Footsie company earning millions obviously pays more than the average Joe on 25 grand.
    But the average Joe probably loses a great deal more in percentage terms of his money than the super rich by the time he’s paid his Council Tax, VAT, drinks and fags and all the rest of it which is never ending.

  40. Posted April 10, 2016 at 1:51 pm | Permalink

    I’ve heard the Regional Labour Parties in England have already started lining up new candidates for Councillors. They expect , for some reason or other, large scale resignations if the Reveal ALL Income cascades down from Mr Corbyn’s Don Quixote Crusade against ALL people irrespective of colour, race, ethnicity, sexual orientation,Party affiliation if they have more than a bob or two and their kids have pot piggy banks larger than 17cm circumference and 10cm long. For one thing Labour’s older members are still into feet and inches and haven’t a clue what “cm” stands for except it must be an EU idea, therefore it’s quite in order and , must be much better than measuring things in gallons.

  41. Posted April 10, 2016 at 1:52 pm | Permalink

    I confess that this dog whistle is within my spectrum and my ears generally prick up. PAYE serfs mostly do not have the incentive or need to seek out the large scale tax planning that the very wealthy find advantageous.

    I do not expect these wealthy people to pay their fair share I just want them to pay what is really due as those of us who pay tax at source have to. Pensions ISAs and gifts within seven years of death I have no problem with. They are open to all at varying scales. Hidden income and schemes are what irk me.

    Any discussion about tax should also consider how much does government really need. This government wants too much.

    • Posted April 11, 2016 at 9:22 pm | Permalink

      Narrow Shoulders

      I’m very wealthy and I pay PAYE as does anyone else who draws a salary from a company. As I’ve tried to explain to you twice now ALL people pay what is due in tax, failure to pay what is due is a criminal offence. Why do you struggle with this concept?

      Do you also object to Capital Gains Tax allowance, R&D tax credits, Giftaid, AIA, SEIS, mortgage tax relief, landlords energy saving allowance, car usage allowance, rent a room relief, personal savings allowance, self employed carried forward losses, marriage transfer allowance, etc etc etc etc

      ( By the way most of the things I’ve just mentioned are more applicable to what you call PAYE serfs than really wealthy people, so maybe you do need to do some tax planning)

      One of the simplest ways for a full time PAYE employee to save income tax is with a Salary Sacrifice Scheme. Guess which UK employer has more staff on this scheme than any other UK organisation………. Its HMRC !!!!

      What you signally seem to fail to understand is that the government PUT IN PLACE these various options that result in minimising your tax bill. They put them in place for a reason, to encourage the activities that they represent.

      What I want to hear from you NS is which tax loophole you think needs closing and why

  42. Posted April 10, 2016 at 1:58 pm | Permalink

    And now the use of a potentially exempt transfer by the PM’s mother is stygmatised as tax avoidance. I think the late Tony Benn, quite rightly, used the same form of planning following his wife’s death for the benefit of his children, including Hilary Benn MP.

  43. Posted April 10, 2016 at 2:05 pm | Permalink

    Then you have the fight going on in ukip of bringing the whip into whip MPs or to keep to the idea of MPs take their orders from their constituency, if they bring in the whip they will become just like all the other parties, no control over your MPs, the whole idea of ukip is the word independent which stands for independent MPs not under the control of the party, that why free parliament has started up to make sure your MPs belong to you the voter, with referendum on votes in parliament in your area and MPs recall for if they do something you do not like they will have to be answerable to you and not a party.

  44. Posted April 10, 2016 at 2:18 pm | Permalink

    I thought this comment at the end of an Express article summed things up rather well, and perhaps explains the anger towards David Cameron about his tax matters:

    “Time & again we hear the same old platitude “Lessons to be learned etc.” The people do not expect to have a PM looking after our country learning lessons at their expense.”

  45. Posted April 10, 2016 at 2:23 pm | Permalink

    Again off-topic, Christopher Booker has another article severely criticising the various campaigns to Leave the EU:

    http://www.telegraph.co.uk/opinion/2016/04/09/brexiteers-are-spurning-their-only-chance-of-victory/

    I don’t like the tone of his Sunday Telegraph articles, and even less do I like the tone of the accompanying blog articles by his collaborator Richard North. People who want to get us out of the EU should be able to disagree and put forward their alternative views without reflexively slagging each other off, which is very bad for morale, can become a distraction from what needs to be done, and gives aid and comfort to our opponents.

    Having said that I do think that successive Prime Ministers going back to Macmillan have deliberately entrapped the British people so they now have to choose whether maintaining trade or ending uncontrolled free movement of persons is most important, and it will be difficult to extricate ourselves from that trap in just one step.

    Reply There is no need for the UK to accept free movement of people and payments to the EU in order to be able to import cars from Germany!

    • Posted April 10, 2016 at 6:02 pm | Permalink

      Indeed I am not sure that more details on the leave process (as Booker seems to want) will help the Brexit cause at this stage it might just worry people and confuse the issue.

      I still feel confident Brexit will win. The people can see clearly that open door migration regardless of merit, expensive energy, huge fees and endless over regulation is hugely damaging to the economy. Project fear clearly has no valid arguments as we see from Cameron’s unfair propaganda.

      The people want their democracy back and they will demand it.

      There is indeed no need for the UK to accept free movement of people and make payments to the EU in order to be able to import cars from Germany!

    • Posted April 11, 2016 at 8:06 am | Permalink

      Denis, regarding “I don’t like the tone of his Sunday Telegraph articles, and even less do I like the tone of the accompanying blog articles by his collaborator Richard North.” see the blog this morning – another example of what you have described. However, there is considerable disquiet about this approach from some of the commenters who have dared to comment, or whose comments have actually got through moderation. I think you have highlighted a very real problem indeed.

    • Posted April 11, 2016 at 2:36 pm | Permalink

      There is no need to link trade and immigration except that Parliament foolishly agreed to do so in 1972 when it passed the ECA72. The question now is how we can extract ourselves from that agreement and restore the separation between the two, without so antagonising other governments that they really do decide to become as stupid and spiteful and untrustworthy and childish as we are told they are.

  46. Posted April 10, 2016 at 2:35 pm | Permalink

    At the moment if the mayor of London was independent MP and was making deals behind closed doors for dave, to save him as tory MP and campaigner for in the EU and your area has had referendum in your local area for out of the EU you could recall him to ask him what is going on and if you do not like his answers he gives you the people in the area can replace him.

  47. Posted April 10, 2016 at 3:23 pm | Permalink

    I lived and worked abroad for over 20 years. My bank account was in jersey and the rental income was paid into a UK current account.
    I employed an accountant to advise on the most efficient way to proceed but paid tax due promptly.
    I also paid N.I. for the whole time abroad, I am now being told that the pension is a benefit which is abject nonsense. I wasn’t entitled to any UK benefits whilst living abroad and the NI was entirely to accumulate tax years.
    I do believe that everyone should minimise their tax bill legally. Being preached too by the likes of Cameron and Osborne when they are doing shady deals, really grates.
    Why did it take Cameron 4 days to come clean if he had nothing to hide.

  48. Posted April 10, 2016 at 3:36 pm | Permalink

    There is a delicious irony from all shouty socialists at this time.
    No Borders is the regular demand.
    No nations and one world is their ambition.
    Except when companies and individuals take advantage and quite legally reduce their tax liability.
    Then it’s suddenly one nation and pay your tax in just the UK

    • Posted April 10, 2016 at 5:53 pm | Permalink

      Indeed, the politics of envy, with all its damaging, obnoxious and repugnant vileness. Open for all to see.

      Much encouraged by Osborne and Cameron’s foolish attacks on perfectly legal tax planning. Hoisted by their own petard.

      • Posted April 10, 2016 at 6:49 pm | Permalink

        With globilisation and the Internet it is simple for companies and individuals to arrange their affairs so as to legally minimise their tax liabilities.
        One minute it’s all about the benefits of the single market and globilisation and the next they want to restrict us to one nation.

        Come on you socialists is it Cuba or one world?

  49. Posted April 10, 2016 at 4:33 pm | Permalink

    Kremlin to release documents from 1930 to 1989 to western press but only a small portion, more will come about the second world war as we go along like Germany document on what really happened.

  50. Posted April 10, 2016 at 4:45 pm | Permalink

    More tax shenanigans, but related to the EU. From a twitter account (Patrick O Flynn, UKIP MEP). Apparently in Sunday Times:
    “Sunday Times scoop on Govt ordered to hand billions in tax rebates to big companies by EU reminds us that Brussels is a corporate stitch-up”

    NB This was reported in Daily Mail in February 2016:
    http://www.dailymail.co.uk/news/article-3446041/UK-forced-pay-43-BILLION-tax-giant-companies-thanks-surprise-surprise-EU-courts.html

  51. Posted April 10, 2016 at 5:16 pm | Permalink

    Three blind nice three blind nice,
    See how they ran see how they ran,
    They all ran after the farmers wife.
    Who cut off their tails with a carving knife,
    Did you ever seen such a thing your life,
    As three blind mice three blind nice.

    That was written for me, loving very minute of it.

  52. Posted April 10, 2016 at 6:55 pm | Permalink

    If you bothered to watch Marr this Sunday morning on BBC you could see Mr Corbyn given easy “open goal” interview questions and never interupted, contrasting with the Conservative lady who was interrupted and challenged every time she said a word.

    • Posted April 11, 2016 at 9:46 am | Permalink

      I saw the first half of the Little Weed Show and was pleased to see the Lord Nigel was not interrupted much and allowed to explain the Brexit budget would inlcude payments to farmers, universities and research to match present returned taxes. He also got the £10bn saving over very clearly.

      I can remember doing the same job as his interviewer before he went into politics. Perhaps this is why he was allowed to make his point.

      • Posted April 11, 2016 at 9:47 am | Permalink

        oops- remember Nigel

  53. Posted April 10, 2016 at 7:01 pm | Permalink

    Hi John
    Yes, we all want to avoid paying as much tax as possible (but of course want the benefits of what taxes provide) but there is a sense that the richer you are the more you can avoid. This discrepancy is what is giving the current wave of criticism traction.

  54. Posted April 10, 2016 at 9:19 pm | Permalink

    The left want to reimpose the forex controls removed by Geoffry Howe in the 1980 budget. There is nothing wrong in investing money which has already been taxed in the UK overseas. And there is nothing wrong in a mother gifting money to her son, provided that the date of the gift is recorded and it is realised that if she dies within 7 years of making that gift, then inheritance tax is due.

    Where David Cameron is guilty of a cover up has nothing to his personal finances. The EU is on a wide ride to political union and he and his Remain campaign haven’t discussed the prospects at all. The aim of the EC, Germany and France is to create a Federal SuperState, which will approximate to a German Empire.

    Scenario 1: All of the EuroZone Member States plus those committed to joining the Euro form a SuperState. This would be the dominant continental power that British foreign policy has for centuries sought to avoid.

    Scenario 2: Only some of the EuroZone Member States wish to form a SuperState. The UK encourages as many of the Member States as posible to ditch the Euro and go back to their own currencies. This is the most likely scenario and it will cause considerable unpleasantness.

    Scenario 3: The EuroZone fails completely and there is short term economic strife.

    Nothing has been heard from the Remain side as to which is the most likely outcome, and to what extent being in or out of the EU influences its effect on us.

  55. Posted April 10, 2016 at 9:38 pm | Permalink

    The current furor over tax avoidance is quite ludicrous.

    Government set tax rules that have to be complied with.
    Any arrangement that takes maximum advantage of tax breaks or even an apparent loophole in the rules, but is in full compliance with them, has, by definition, to be legal.

    The can only be legal or they are not, morality does not come into the equation.

    If successive governments have done nothing to close down said loopholes or tighten the rules, any taxpayer, IFA or accountant has a right to assume that Ministers are happy with the arrangements as they currently exist.

    Personally I think Cameron was wrong to publish details of his personal tax affairs. What has happened today was entirely predictable. The rabid mob will now demand ever more information until nobody in the Prime Minister’s family will escape scrutiny. This is both wrong and grossly unfair.

    What he should have done is either :

    1. Invite HMRC to carry out an in depth inspection of his finances and publish the outcome.
    or
    2. Ask the committee for standards to inspect his actual tax returns and produce a report guided and assisted by independent accountants which would be placed in the public domain.

    Because he mistakenly indulged his political enemies, we now have a baying mob out for blood. It is a most unseamly product of the greed and envy stoked up by Corbyn and his ragtag army of supporters.

    In my view a line should be drawn under the whole affair and we should all move on.

  56. Posted April 10, 2016 at 9:42 pm | Permalink

    Cameron should have been locked up for leaving his kid behind in a pub like the rest of us would have been.

    His biggest mistake is surrounding himself with public school folk, and showing no understanding of the rest of society.

    Hence he gets rubbish advice.

  57. Posted April 11, 2016 at 11:55 am | Permalink

    Tax avoidance is not the real issue in this story. If David Cameron had invested his £12k in an ISA through a UK high street bank there would be no story. The real issue is that of someone who has openly criticised the use of tax avoidance structures in the past while knowing full well he had taken advantage of and gained financially from the very thing he was criticising others for doing, and he has been found out, despite trying to hide (badly) what he had done. Very much a case of “do as I say, not as I do”.

  58. Posted April 11, 2016 at 5:15 pm | Permalink

    Tax evasion is trivially bad, i.e., illegal. I just do not care about tax avoidance; the seemingly endless chuntering on (BBC? Ed) – Cameron – and his perfectly understandable arrangements is not even entertainigly selfrighteous – and incidentally the sums involved do not strike me (a comp educated plumber’s son) as enormous. What does bother me is the way in which such stuff sidelines the matters Gove was trying to deal with before he was disgracefully moved from Ejercation: the buying of influence; the inheritance of nifty little contacts in quirky and even lucrative employment. How convenient for the liberal elite this inheritance non-story must be!

  59. Posted April 11, 2016 at 6:53 pm | Permalink

    Surely accommodation at 10 and 11 Downing Street are subject to Benefit in Kind? The occupants seem to be able to claim rental income from their homes which are close by to work, then secure free accommodation from their employer. They should be charged the reasonable rent or a benefit in kind. Aggressive tax avoidance as a minimum, I’d say.

  60. Posted April 11, 2016 at 10:41 pm | Permalink

    It’s a clinical explanation, John – explaining the letter of the law/tax rules.

    But the issue is perhaps revolving more around the spirit of the laws and tax rules.

    ISAs are tax avoidance for the masses, for the people. Legitimate and fine.

    IHT planning similarly, well, almost for the masses, or at least those who own their own property and pension fund, etc.

    Offshore funds and trusts and other more sophisticated means and methods of avoiding tax are generally the preserve, however, of the more affluent/wealthy, the more privileged.

    It’s not so much the percentage of the total tax take that people are concerned with. That is indeed close to 1/3rd of the total tax take, as you say, paid by the wealthiest 1%, and that may be enough to find the NHS, as you say. But what really matters is not the aggregate amounts of tax paid by certain echelons but the actual rate of overall tax that is paid by the individuals in those echelons.

    Why should the richest individual be able to use the most sophisticated methods of tax avoidance, including potentially aggressive forms, and therefore pay less tax individually, that is justified by saying ‘Ah, yes, I do pay less tax than you, dear proles, even though I am considerably wealthier, to say the least, in fact I’m somewhat stinking rich, but if you add the actual pounds and pence amount of my reduced level of tax to the similarly reduced level of actual pounds and pence tax that my similarly stinking rich buddies and peers all pay, well, between us, because we are so stinking rich, even though we pay a lower rate of tax than everyone else, well, in pounds and pence, it adds up to a lot of dosh – in fact a huge amount, enough to pay for the NHS, on our own, don’t you know – and perhaps even social welfare, education and the police and armed forces! In fact, all the proles out there really ought to be jolly grateful to us and jolly well applaud us, as we fly off, in our private jets, having been chauffeured to and from them, to our tax havens, where our tax avoidance planning may include offshore trusts that wrap our onshore assets, etc, etc.’

    It doesn’t really pass your average person/prole’s ‘sniff test’, because it doesn’t smell right.

    So, perhaps it’s not the letter or even the spirit. It’s about pungency.

    I wonder if I would be well advised to read the offshore diary entry you refer to making next with a nose clip on….

    We are all in it together is indeed a valiant cry and call. But it has to be meant and demonstrated, through actions, not just words. Social conscience and doing unto your neighbour / fellow citizen as you would have them do unto you / society as a whole surely requires all individuals, including the very wealthiest, to be content to pay the headline ‘normal’ rates of tax, as per the masses, and not to instead have some exploit their wealth and the access to advice, even if technically legitimate/lawful, but arguably morally ‘pushing the boundaries’, that it can provide, to reduce the rate of tax paid. If we truly are all in it together. Or are some people more in it, than others – relatively speaking, if not absolutely.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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