I’m a tax adviser to millionaires and billionaires. AMA.

[LetsTalkTax]

I advise rich people on their tax affairs. With all the posts today of people outraged by Vinted being taxable, I thought it might be a good time to do an AMA and dispel some of the myths posted about the tax that rich people don’t pay.

Are you rich from doing it?

I assume you show them the loopholes, otherwise why would they come to you?

Do you feel guilty helping to legally swindle the public out of massive amounts of much needed taxes?

Why would he/she feel bad about tax management? The public is only entitled to what people are legally obliged to pay. Maybe you should give more just because the public needs it.

If you were to summarise your best tips for saving on tax, what would they be?

Do you feel that the general public needs better education on the difference between tax evasion and tax avoidance? So many people seem to think that tax advice is somehow helping rich people break the law!

any tips on how to keep track on keeping below the £100k mark for childcare purposes?

I’m not the OP but I am also a tax adviser to the HNW and UHNW. There are no “loopholes” - only the law which we have to follow.

“Loopholes” grinds my gears.

What’s the lowest worth client you deal with and the highest?

do you have nice venues for meetings - client yatchs, that sort of thing?

Do you feel bad about yourself that you’re using your skills and knowledge of the tax system to worsen inequality in society?

I ask because in the past couple of years my job seems to have shifted from being fairly wide-ranging (advising those on a wide range of incomes) to primarily focusing on high net worth individuals with multiple homes and an insane amount of disposable income. And I feel so bad that I’m possibly becoming part of the system of facilitating the ultra-comfortable lives of the 0.1% and making societal inequality even worse that I’m seriously considering quitting my job to do something more socially useful. Do you suffer similar “moral injury” from your work?

I get the feeling this will go down like a lead balloon 🫤

What would be the typical income/level of wealth that typically requires your skill set?

I’m well paid, but absolutely not rich.

I briefly temped for an accountancy practice which dealt with the finances for high net worth individuals, and if I'd found out at the start of my career how lucrative it was, then I would have chosen that career path instead.

@LetsTalkTax Do you sometimes get asked to massage the figures, and how would you say no to that sort of request without losing the client?

Oh for fucks sake! Most 'rich' people pay absolutely masses in tax. Far, far, far more than most other people.

For example, we pay 45% in tax with NO personal allowance.

As others have said, there are no loopholes. The ultra rich generally pay the correct tax (certainly my clients do), but come to me to make sure it is correct and that they are maximising the reliefs that are made purposefully available to them by government.

They want to qualify for things like heritage asset relief from inheritance tax. An insanely complicated set of rules that are available to Joe Public if they own artwork of national significance (of course they generally don’t).

It’s about making sure they have the right wealth in the right structures to get the tax reliefs afforded by parliament.

I feel confident in saying you're not on the level PP and OP are talking about 😂

The top one per cent pay 30 per cent of all income tax revenues: a higher share than at any time in past twenty years. In other words, three in every ten pounds that the government receives in income tax is paid by just over 300,000 individuals.

www.lse.ac.uk/research/research-for-the-world/economics/how-much-tax-do-the-rich-really-pay

I would very bluntly say no, explain that what they are asking is illegal and say that if they want to take that course of action then they would have to part ways with me as a client.

It’s an incredibly interesting job, but most
clients who I work with want to follow the rules, just to their best advantage.

@whatausername we're not billionaires, no.

If you’re an employee, and that’s where most of your wealth is, there’s not much you can do.

Divert your ‘income’ sources to capital gains.

£10m+ wealth before it’s really worth it, but my least wealthy client has about £3m and I do add value to him, but not on the same scale.

From this thread alone, yes 😂

But definitely. More tax education in every respect is needed, but the way the media sensationalise even fundamental tax rules (see Rishi’s wife) as tax loopholes make the public perception so different to the reality.

There is no such thing as a legal swindle.

Tax avoidance is legal, tax evasion isn't. Accountants don't make the tax laws, the government does that, so if there are loopholes, then it is the government's fault. Accountants simply calculate tax liability according to law. They are not moral guardians.

What sort of practice do you work in? Or are you freelance?

What’s your typical client profile - non-dom, celebs, landed estates?

Did you ever do any of the tax schemes (Icebreaker, etc.), back in the day?

As a fellow tax specialist (albeit specialising in a different client group), I echo this! The law is the law, and "loopholes" are not really a thing except in people's imaginations.

If you object to a tax relief that is in the law, then campaign for politicians to change it.

A normal sole trader earning a modest income is usually looking for exactly the same thing in their tax accountant as a large corporate or a HNWI would be. They want to be compliant (so they don't have to worry about fines or prison), but they don't want to pay more tax than they are obliged to.