Paradise Papers: Tax Havens Exposed

[northwichcat]

My accountant (my girlfriend) knows I haven't got the cash to stash in Hayling Island let alone the Cayman Islands!

Does she recommend sending money through the tills of high street retailers instead?

 

[Condor7]

We have different morals then. The rich are laughing at us working our nads off and paying tax. You seem happy to let them. Why?

I don’t disagree with everything you say, but I am sorry this is rubbish.
I know a lot of rich people most self made, and none are laughing at the poorer working classes, many were just the same themselves at one time, but through hard work and being prepared to take risks have made it pay off. Yes some are born with a silver spoon in their mouths but often these are children of those same ones I just mention, why begrudge them the benefits if their parents hard work, and they certainly don’t laugh at those less well off most remember their routes.

I tell you who are laughing at us though. The villains from a local housing estate who broke into my office, trashing it and stealing my computers. They found the guys that did it with my computers but because no forensics were found at my office to match them they got away with it. The same with the scratter who broke into my house while myself and family were asleep and took my car keys and stole my car. Same outcome found the car and who had it but no forensics at my home. Or the idiot from the local council estate that pushed my son off his bike and stole it, found at his home but denied ever seeing it before. I could go on......

I never lock my doors or set my alarm in fear of rich people breaking in, its the poor and working classes that I worry about and who are the ones laughing at us.

 

[WelshBluebird]

Tax avoidance however is perfectly legal.

Do you have an ISA? If so, you're also engaging in tax avoidance. Do you believe that makes you morally inferior to someone who does not? Do you ring up the treasury and volunteer to pay a higher rate of tax than you are required to? Of course not. You will pay the minimum amount of tax you are legally required to.

To both of those - just because something is legal does not make it morally right.

It is one thing to have an ISA. It is a totally different game to be funnelling the UK earned profits from your company into a foreign company to avoid paying tax. If you make money in a country, then you should pay tax on that earnings in that country. That concept doesn't sound outrageous at all surely?

 

[Xenophon PCDGS]

Who first coined the phrase "Paradise Papers"?

 

[Condor7]

To both of those - just because something is legal does not make it morally right.

It is one thing to have an ISA. It is a totally different game to be funnelling the UK earned profits from your company into a foreign company to avoid paying tax. If you make money in a country, then you should pay tax on that earnings in that country. That concept doesn't sound outrageous at all surely?

I don’t disagree, there are many things that are legal but morally questionable but that is something for our consciences. It is easy to take the moral high ground when something does not apply to you, but if for instance you won the lottery, although the winnings are not directly taxable as soon as you put the money in a UK bank it is subject to 40% inheritance tax. I wonder how many winners have taken accountants advice to bank it off shore, and I wonder when it comes to it what any of us would do.

My point is the constant berating of the rich as if the rest of us are so innocent. How many of us declare each year to the tax man what we have sold on EBay or how many self employed workers have not taken cash as payment to avoid paying vat or tax, and indeed how many of us have not asked one man businesses what discount they will give for cash, absolving our own conscience by saying to ourselves “it’s up to them what they declare”. Just because these are smaller amounts does it make it any more ok. I just think it’s time some on here got off the moral high ground and admit most is just rich envy.

 

[DarloRich]

I don’t disagree with everything you say, but I am sorry this is rubbish.
I know a lot of rich people most self made, and none are laughing at the poorer working classes, many were just the same themselves at one time, but through hard work and being prepared to take risks have made it pay off. Yes some are born with a silver spoon in their mouths but often these are children of those same ones I just mention, why begrudge them the benefits if their parents hard work, and they certainly don’t laugh at those less well off most remember their routes.

I tell you who are laughing at us though. The villains from a local housing estate who broke into my office, trashing it and stealing my computers. They found the guys that did it with my computers but because no forensics were found at my office to match them they got away with it. The same with the scratter who broke into my house while myself and family were asleep and took my car keys and stole my car. Same outcome found the car and who had it but no forensics at my home. Or the idiot from the local council estate that pushed my son off his bike and stole it, found at his home but denied ever seeing it before. I could go on......

I never lock my doors or set my alarm in fear of rich people breaking in, its the poor and working classes that I worry about and who are the ones laughing at us.

The mega rich don't have to break into your house to "rob" you. They are doing it now. Self made businessmen of the type you or I could know ( and i know several who I went to school with) are not the issue. They are small fry in the grand scheme of things and easy prey for HMRC. Even they don't earn enough to make off shore tax planning really worth the trouble and expense. I am sure they have their have bought/leased their wagons in such a way as to save a bit of money but it will pale into insignificance alongside the sums being discussed in these papers.

All I want is a fairer society. To me that means people who have had the benefit of all that our society has to offer and have done very well out of it return some of that benefit to the next generation by paying a touch more in tax. I am not naive enough to expect an equal, just or fair society but i think we can make society a bit fairer. That is why when I see people with lots & lots of money who seem to have a choice about how much tax they pay, when the rest of us have no real choice, choosing to stash their money off shore and not contribute to our society i get a touch annoyed. The law may allow this. My view is it should make it harder to achieve.

 

[Dai Corner]

I love the phrase 'fairer society'. Whoever came up with it is a genius.

It can't really be criticised but means nothing in particular and can be interpreted to suit the current message. It can even mean different things to different people at the same time.

 

[DarloRich]

I love the phrase 'fairer society'. Whoever came up with it is a genius.

It can't really be criticised but means nothing in particular and can be interpreted to suit the current message. It can even mean different things to different people at the same time.

Agreed - but society is not fair enough when rich people are paying less tax than you or I.

 

[Dai Corner]

Agreed - but society is not fair enough when rich people are paying less tax than you or I.

Less tax in percentage term or absolute terms? Rich people generally spend a lot more money than you or I and pay tax on that.

Even 'rich' is a relative term. I own my own house after paying a mortgage for 25 years and probably appear rich to someone paying £2000 a month to rent a small fiat, or someone unemployed in social housing.

If I had to define a fair society it would probably be one where everyone had the freedom to do as they pleased as long as it didn't unduly affect others, take responsibility for themselves and their families and keep as much of their earnings as possible. Government's role being to provide public services and keep the genuinely needy out poverty.

 

[northwichcat]

Who first coined the phrase "Paradise Papers"?

Apparently an anonymous whistle blower came up with the term.

 

[northwichcat]

Less tax in percentage term or absolute terms? Rich people generally spend a lot more money than you or I and pay tax on that.

The difference in what's defined as fair was highlighted during the Conservative-Lib Dem coalition. The Lib Dems wanted to take anyone earning £10,000 out of paying income tax altogether, while the Conservatives wanted to scrap the 50p tax rate. It can be argued a part time worker earning £7,500 a year paying income tax is unfair when they are struggling to make ends meet but conversely it can also be argued that taxing people a higher proportion of their income because they earn more is unfair. It depends whether you take a view to the left, centre or right on the political spectrum as to what fair is.

 

[DarloRich]

Less tax in percentage term or absolute terms? Rich people generally spend a lot more money than you or I and pay tax on that.

Even 'rich' is a relative term. I own my own house after paying a mortgage for 25 years and probably appear rich to someone paying £2000 a month to rent a small fiat, or someone unemployed in social housing.

But these papers don't talk about comfortable or well of or affluent or even rich people. They deal with the mega rich. The kind of people with more gold than Croesus. This is the kind of money we will never see. Paying off your mortgage on your normal family home wont make it worth investing in these tax planning arrangements. Being a decently successful local business man will not make it worth the costs of setting these schemes up.

If I had to define a fair society it would probably be one where everyone had the freedom to do as they pleased as long as it didn't unduly affect others, take responsibility for themselves and their families and keep as much of their earnings as possible. Government's role being to provide public services and keep the genuinely needy out poverty.

I agree to a point - However to do that the government need income from tax. They only have the money we give them/they take from us. It seems to me the mega rich are using legal methods to reduce, further than I think is right, their contribution to that fund to support the rest of society. They have already had the benefits of that fund but want to avoid topping it back up to help others. Why are you not angry about that?

 

[SteveP29]

Government's role being to provide public services and keep the genuinely needy out poverty.

Singularly failing there then, aren't they!

 

[Dai Corner]

I agree to a point - However to do that the government need income from tax. They only have the money we give them/they take from us. It seems to me the mega rich are using legal methods to reduce, further than I think is right, their contribution to that fund to support the rest of society. They have already had the benefits of that fund but want to avoid topping it back up to help others. Why are you not angry about that?

I'd need to know how much tax these people are paying here taking into account things like tax on income and investments they haven't put offshore, VAT on their purchases, employer's National Insurance for their staff etc. Also any tax they pay in other countries where they spend time. Then I could see whether they were paying about the same as average, twice as much, fifty times as much or whatever and take a view on how fair that was.

 

[NSEFAN]

Singularly failing there then, aren't they!

Indeed, and it doesn't help when an enormous chunk of the wealth generated is siphoned away, rather than supporting the society that helped create it in the first place. It's almost like society-level asset stripping, whereby the things which keep society funcitoning are run into the ground in order to extract as much wealth as possible. The collapse won't be until the next generation, by which time those who took the wealth away can move onto somewhere else.

 

[DarloRich]

I'd need to know how much tax these people are paying here taking into account things like tax on income and investments they haven't put offshore, VAT on their purchases, employer's National Insurance for their staff etc. Also any tax they pay in other countries where they spend time. Then I could see whether they were paying about the same as average, twice as much, fifty times as much or whatever and take a view on how fair that was.

You will never get that information because it is purposely hidden so I assume you are happy to allow things to continue. Why? Why aren't more people disgusted by this?

Why, if these mega rich people are such fine upstanding tax payers, are they stashing assets in these overseas tax havens? Why aren't all their assets based here in the UK so we know if they are paying the right level of tax. What do they have to hide? If it smells fishy it is fishy!

 

[Dai Corner]

Singularly failing there then, aren't they!

We should probably start a new thread if we want to discuss this but I'm reasonably happy with the public services I use, less so at the inefficient way they're sometimes provided.

I won't comment on support for those on the poverty line as fortunately I've no first hand experience.

 

[Bromley boy]

I agree to a point - However to do that the government need income from tax. They only have the money we give them/they take from us. It seems to me the mega rich are using legal methods to reduce, further than I think is right, their contribution to that fund to support the rest of society. They have already had the benefits of that fund but want to avoid topping it back up to help others. Why are you not angry about that?

My bold.

That statement is the precise problem with your argument.

They may be paying less than you think is right, but they aren't paying less than they think is right or less than what the law thinks is right. I'll ask again, how do you believe tax payers are supposed to know how much tax is the correct amount to pay, other than by reference to the law?!

Turning that round, if you want tax payers to ignore the law and pay more tax than legally required for moral reasons, presumably you must also believe they could entitled to pay less than legally required, if they identify a moral case for doing so?! That sounds like tax evasion to me! It also rather depends on whose morals you are using!

Can you see my point here - in a functioning democracy the law is the only standard tax payers can, or should, be held to.

Businesses are duty bound to minimise the amount of tax they pay and individuals will always act from personal interest. Attacking them for minimising their tax bill completely misses the point that it is down to government to provide a tax system which is fit for purpose, transparent and preferably simple.

Jacking the tax rates up to punitive levels also doesn't do a particularly good job of raising tax revenues because more avoidance action is taken and businesses/wealthy individuals will simply move abroad. Far better to simplify it as much as possible and encourage a healthy, certain, business environment.

 

[DarloRich]

My bold.

That statement is the precise problem with your argument.

They may be paying less than you think is right, but they aren't paying less than they think is right or less than what the law thinks is right. I'll ask again, how do you believe tax payers are supposed to know how much tax is the correct amount to pay, other than by reference to the law?!

Turning that round, if you want tax payers to ignore the law and pay more tax than legally required for moral reasons, presumably you must also believe they could entitled to pay less than legally required, if they identify a moral case for doing so?! That sounds like tax evasion to me! It also rather depends on whose morals you are using!

Can you see my point here - in a functioning democracy the law is the only standard tax payers can, or should, be held to.

I agree entirely. If the law is allowing or facilitating such tax avoidance it needs to be changed to make it harder to achieve. Soon. That is all I want.

Businesses are duty bound to minimise the amount of tax they pay and individuals will always act from personal interest. Blaming them for minimising their tax bill completely misses the point that it is down to government to provide a tax system which is fit for purpose, transparent and preferably simple.

I blame both. I have no choice but to pay my income tax and VAT. Why is it OK for the mega rich to, seemingly, have a choice about how much they want to pay? The HMRC would have me in court in a trice for not paying income tax. Why is it not as easy to hold the mega rich to account? The same rules do not seem to apply.

The government seems happy to allow it to happen. Snouts in the trough?

Jacking the tax rates up to punitive levels also doesn't do a particularly good job of raising tax revenues because more avoidance action is taken and businesses/wealthy individuals will simply move abroad. Far better to simplify it as much as possible and encourage a healthy, certain, business environment.

I don't want to jack tax rates up. I want the richest to pay a bit more and for it to be harder for them to avoid their tax.

 

[Dai Corner]

You will never get that information because it is purposely hidden so I assume you are happy to allow things to continue. Why? Why aren't more people disgusted by this?

Why, if these mega rich people are such fine upstanding tax payers, are they stashing assets in these overseas tax havens? Why aren't all their assets based here in the UK so we know if they are paying the right level of tax. What do they have to hide? If it smells fishy it is fishy!

I see no point in getting worked up about how much tax people pay or don't pay in this country and why they don't volunteer to pay more than the law says they have to when we can only speculate on the figures involved.

Why should they have all their assets in the UK when they probably spend time in several different countries?

 

[DarloRich]

I see no point in getting worked up about how much tax people pay or don't pay in this country and why they don't volunteer to pay more than the law says they have to when we can only speculate on the figures involved.

So the answer is: Yes. You are happy for it to continue.

I find that sad. The law should be changed to make it harder to undertake these activities.

 

[northwichcat]

I see no point in getting worked up about how much tax people pay or don't pay in this country and why they don't volunteer to pay more than the law says they have to when we can only speculate on the figures involved.

Why should they have all their assets in the UK when they probably spend time in several different countries?

The question is why is it legal? David Cameron told us years ago the Conservatives would crack down on those using legal loopholes to avoid paying tax. What progress have the Conservatives made in doing that?

 

[Dai Corner]

So the answer is: Yes. You are happy for it to continue.

I find that sad.

No I'm saying I've no idea what tax they pay here, still less whether that amount is 'fair'. You're assuming they pay less than what you would regard as 'fair' and getting angry because of that.

 

[Bromley boy]

The question is why is it legal?

Often because tax legislation is drafted so badly that no one is certain what the correct interpretation is until it has been litigated through the courts.

And often because the loop holes people get so worked about are, in fact, actually tax reliefs deliberately created to encourage investments in certain areas.

EDIT: And in fairness to the conservatives they have passed measures such as the general anti-avoidance rule. The treasury became considerably more aggressive in its approach to avoidance the last recession, passing myriad targeted anti-avoidance rules over the last few years.

Whether these measures have actually increased the overall tax take is another matter of course.

 

[DarloRich]

No I'm saying I've no idea what tax they pay here, still less whether that amount is 'fair'. You're assuming they pay less than what you would regard as 'fair' and getting angry because of that.

The media suggests that they are paying less than me. That does make me angry. Why are you not angry about that? Why does it not bother you? Do you not care that the country could improve the NHS or schools or the police with some of that money.

Often because tax legislation is drafted so badly that no one is certain what the correct interpretation is until it has been litigated through the courts.

And often because the loop holes people get so worked about are, in fact, actually tax reliefs deliberately created to encourage investments in certain areas.

Like private jets? According to the papers Lewis Hamilton got a £3m VAT rebate on his jet purchase/lease because it is used for business. His main business is driving formula one cars so I assume he uses the jet to commute to work. Can I get a VAT refund on my car because I drive it to work everyday?

 

[Dai Corner]

The media suggests that they are paying less than me. That does make me angry. Why are you not angry about that? Why does it not bother you? Do you not care that the country could improve the NHS or schools or the police with some of that money.

Because it's just suggestion / speculation. If I got angry over every bit of speculation I read in the media I'd be a nervous wreck. I like to make decisions or form opinions based on facts.

Like private jets? According to the papers Lewis Hamilton got a £3m VAT rebate on his jet purchase/lease because it is used for business. His main business is driving formula one cars so I assume he uses the jet to commute to work. Can I get a VAT refund on my car because I drive it to work everyday?

If you were self employed or had your own company you probably could.

 

[WelshBluebird]

My point is the constant berating of the rich as if the rest of us are so innocent. How many of us declare each year to the tax man what we have sold on EBay or how many self employed workers have not taken cash as payment to avoid paying vat or tax, and indeed how many of us have not asked one man businesses what discount they will give for cash, absolving our own conscience by saying to ourselves “it’s up to them what they declare”. Just because these are smaller amounts does it make it any more ok. I just think it’s time some on here got off the moral high ground and admit most is just rich envy.

Not sure I have seen anyone defending those cases here. If someone makes a profit on the sale on goods or services in the UK then they should pay UK based tax. And of course, there is a massive difference between people who sell a few items on ebay for just a few quid and global corporations pushing millions or billions around, not just morally, but more importantly in terms of effects on the UK treasury.

 

[DarloRich]

Because it's just suggestion / speculation. If I got angry over every bit of speculation I read in the media I'd be a nervous wreck. I like to make decisions or form opinions based on facts.

But this is backed up by documentation you can read through.

If you were self employed or had your own company you probably could.

Is Lewis Hamilton not an employee of Mercedes Formula 1?

 

[Dai Corner]

But this is backed up by documentation you can read through.

I shall have to read that then. I thought you said earlier their tax affairs were secret.

Is Lewis Hamilton not an employee of Mercedes Formula 1?

Probably a director of Lewis Hamilton Driving Ltd

 

[Bromley boy]

Like private jets? According to the papers Lewis Hamilton got a £3m VAT rebate on his jet purchase/lease because it is used for business. His main business is driving formula one cars so I assume he uses the jet to commute to work. Can I get a VAT refund on my car because I drive it to work everyday?

Hamilton is essentially doing the same thing as the self employed plumber. Ok, he happens to be doing it on a private jet rather than a transit van, but the principles are the same.

From what I’ve read of this, this is an example of the normal operation of the VAT system and it is for the relevant tax authorities to investigate and challenge the arrangements through the courts if they believe they breach relevant laws.

Where I do agree with you is that people with the level of wealth to own homes in various countries, private jets etc. will inevitably be able to pay for advisors etc to arrange their (very complex) tax affairs in a manner which minimises their exposure. They can also benefit by arbitraging the differences between different taxation systems around the world.

This probably isn’t “fair”, but it is a reality and blaming them as individuals for doing so is counter productive, in my view.