Just some things of interest to chew on that show Labour’s hypocrisy and how complicated offshore banking and investment is…especially as the UK is one of the world’s biggest tax havens itself…no small thanks to Gordon Brown.
The BBC seems totally uninterested in raising awkward questions for Labour and looks to be targeting Cameron….they must think they have the EU referendum in the bag and can risk smearing and undermining the Tory PM for the joy of it.
I welcome my right hon. Friend’s support for the measure.
This Finance Bill includes measures to close 15 loopholes that have been used to avoid tax. Nine of these provisions have immediate effect from Budget day, and one—on tackling stamp duty avoidance—is backdated to the previous Budget, following the Chancellor‘s clear warning in 2012. This demonstrates the Government’s continuing commitment to fast, effective and targeted action to tackle avoidance. In addition, we are strengthening the successful disclosure of the tax avoidance schemes regime to increase the information that promoters of tax avoidance schemes have to provide about the users of their schemes.
Let me say to my hon. Friend and to those on the Treasury Bench that his announcement about a general anti-tax avoidance provision is hugely welcome, particularly in London, where people have seen companies get away with not paying taxes for many years—something that no previous Government have adequately dealt with. It is very welcome and we look forward to it becoming law as soon as possible.
Who voted…
‘No’?
Pimco, along with every other financial institution from insurance, banks and pension businesses, have offshore investment schemes.
Pimco, like Cameron’s dad’s old company now, has based its PIMCO Funds: Global Investors Series plc in Ireland for tax purposes…
Irish Taxation of the Company
The Directors have been advised that, under current Irish law and practice, the Company qualifies as an investment undertaking as defined in Section 739B of the Taxes Act, so long as the Company is resident in Ireland. Accordingly the Company is not chargeable to Irish tax on its income and gains.
Why, if these are so bad, does Labour’s ex PM join up with Pimco?…
This maybe the answer…he said this in 1994…..
“The taxpayer is entitled to take advantage of the law to minimise his or her tax bill…
But….It is the complexity of the present system that has encouraged the growth of a flourishing avoidance industry.” Gordon Brown
So a complex tax regulation system encourages tax avoidance (legal)….who is it that massively increased that complexity……and created the ‘most populous tax haven in the world’?
And yet at the end of his time in office Gordon Brown is the Chancellor of the most populous tax haven in the world according to an IMF study. The passing of the Income Tax Act 2007 has made the UK tax legislation the bulkiest in the world, the volume of legislation having doubled since Brown came to power in 1997. An estimate by the Tax Justice Network suggested that at least 40% of all tax legislation from 2004 to 2006 was directly related to tax avoidance, suggesting the issue has far from gone away. And there are frequent suggestions that Britain is now the tax haven of choice for the world’s mega-rich, only three of the top ten in the Sunday Times rich list for 2007 having actually been born in the UK whilst those featured in that list have seen their wealth increase by an average of 260% over the last ten years in contrast with an average 120% wealth increase for the population as a whole.
This is what an IMF study said….
In recent years, there has been an increasing recognition of the need to improve the understanding of the activities of offshore financial centers (OFCs) because these centers have captured a significant proportion of global financial flows. Concerns regarding potential risks posed by OFCs to the international financial system have resulted in a number of global initiatives to improve oversight. Because OFCs depend on their ability to attract global financial business, competition is strong, and incentives for compliance with international standards are significantly different in OFCs compared to primarily domestic markets. There is a greater risk that profitability is achieved at the expense of regulatory and supervisory standards.
In terms of specific findings, the study identified Latvia, the United Kingdom, and Uruguay as OFCs.
The UK itself is one big tax haven…
The UK, under Chancellor of the Exchequer Gordon Brown became a lead player in the regulatory race to the bottom through which nations tried to poach financial service industry activity from competing national centres or to stop their own financial enterprises from relocating abroad.
The UK government still looks to support that industry….and here.…and here…
As George Osborne, UK Chancellor of the Exchequer, said: “The message is simple, the UK is not just open for investment management business, it is actively seeking it. We look forward to working with industry and investors to win it, keep it, and help it grow.”
Here’s a list of approved offshore funds.
The Tories lured Nissan to the UK with tax breaks in the 1980’s and Labour continued that policy handing over large sums of money to keep Nissan happy…even when Nissan changed it’s company structure to avoid UK tax in 2008…
Britain’s biggest car maker is avoiding paying millions of pounds in corporation tax every year – by selling its vehicles through a Swiss parent company.
Nissan Motor Manufacturing, which has received tens of millions of pounds in Government grants to build cars in the UK, is a contract manufacturer for another Nissan company based in Rolle, Switzerland.
Nissan has received almost £80 million in grants from British Governments over the past ten years, with politicians bending over backwards to persuade the Japanese car giant to invest in its Sunderland car production plant. As recently as March 2010 it was awarded £21 million to develop the all-electric Nissan Leaf.
In 2012 Ed Miliband was praising that effort.
In 2009…
All that is rather a paradox really when you consider how Labour now attacks companies that bring jobs and investment but get a low tax rate or use other countries to base themselves in for tax purposes…
Even McDonnell seems confused…on the one hand pledging to invest in industry [ie tax breaks and handouts] but also attacking those who legally ‘minimise their tax liability’ [as Gordon Brown might approve of]
Mr McDonnell said Labour’s strategy would be based on growing the economy by strategically investing in key industries and sectors.
“We will force people like Starbucks, Vodafone, Amazon and Google and all the others to pay their fair share of taxes.”
Would that include Nissan? Presumably McDonnell would give them 10’s of millions as an investment and then tax them until the pips squeak.
In 2007 under Labour and 10 years of GB as Chancellor…
Liberal Democrat Treasury spokesman Lord Oakeshott said: ‘These devastating figures prove that the richer you are, the less tax you pay in Brown’s Britain. Gordon Brown won’t get a grip on rich men’s tax-dodging when close adviser Geoffrey Robinson used offshore trusts and Sir Ronald Cohen [who bankrolled Mr Brown’s leadership campaign] conceals whether he is domiciled in Britain for tax purposes.’
Avoid tax…get a Knighthood…
The Guardian, April 2006
Hans Rausing, the Swedish billionaire whose tax arrangements were revealed by the Guardian, is among scores of foreign citizens awarded official honours in the last year. Rausing, former head of Tetra Pak, who has lived in England since 1982, was awarded an honorary knighthood in January.
Four years ago, the Guardian revealed that, although he and his immediate family had an income of about £4m a week, he was using so many tax loopholes that in at least one year, he and his UK businesses received more from the Treasury than they handed over.
Published July 2002
Published July 2002
The two thousand largest corporations in Britain are being allowed to cut corners in tax law and to escape Inland Revenue penalties as part of the government’s efforts to produce a business-friendly environment.
Labour’s offshore trust hypocrisy (not the Dodgeson this time)…..
The Government clearly oppose offshore trusts, yet the Minister in charge of the policy has such a trust himself. Even worse, his plans for individual savings accounts will cut tax relief for many thousands of savers with more than £50,000 in personal equity plans and tax-exempt special savings accounts, yet he has the benefit from at least £12 million that is stuffed into a secretive tax haven, avoiding tax all together. No wonder he has been accused of hypocrisy and by no less a person than the Deputy Prime Minister, who said on “Breakfast with Frost”:
“You may argue that the politician”– the Paymaster General– “has said one thing and perhaps done another. That seems to be the greatest charge against him.”
That last line of course may bring to mind recent Labour comments about Cameron and how terribly hypocritical it was of him to have had an investment in his father’s business and then, after he’d sold his shares, say he will tackle the abuse of tax avoidance.
The Tories introduced a higher capital gains tax to tackle offshore windfalls…..
In his 1991 Budget speech, the then Chancellor, Norman Lamont, argued:
“I do not think that it is right for a relatively small number of wealthy people to shift very large assets into offshore trusts simply in order to avoid United Kingdom tax.”–[Official Report, 19 March 1991; Vol. 188, c. 174.]
As a consequence of the Conservative legislation in 1991, United Kingdom residents transferring assets to an offshore trust for the benefit of themselves or their family are now liable for capital gains tax. It is notable that in a recent article in Accountancy Age on the possibility of a Labour Government cracking down on offshore tax avoidance via trusts, the chairman of the Jersey Fund Managers Association was quoted as saying:
“The Conservative Government already levelled up the playing field. I don’t think a Labour Government holds any particular worries for us.”
On offshore trusts and CGT, Gordon Brown agreed as he wrote in 1994:
“As the law stands, offshore owners of UK assets, including companies, shares and land, pay no CGT when they trade in these assets. A UK resident can transfer assets to an offshore trust and the trustees can then make payments to beneficiaries in the UK, avoiding much tax liability.”
So why did he and Labour massively reduce capital gains tax?…….
In the late 1990s, the Labour government removed the tax on dividends. In 2000 it cut capital gains tax from 40 per cent to 10. It exempted from tax those profits returned to the UK from overseas subsidiaries. Tax reduction is central to most private equity buyouts, like Boots.
Gordon Brown told the 1996 Labour Party Conference, “A Labour Chancellor will not permit tax reliefs to millionaires in tax havens.” There is now an estimated $2.7 trillion hiding in tax havens. In 2002 Brown extended the 10 per cent top rate capital gains tax to gains made after just two years not ten.
