WE ARE ALL IN THIS TOGETHER

[Beaaware]

This is what we are told, tough times for all, but according to Dispatches tonight some of our very wealthy government ministers & advisors manage to (legally) avoid paying tax through offshore companies in places such as The Cayman Islands & Jersey. Named on the programme were Andrew Mitchell, Sir Phillip Green, Phillip Hammond & George Osborne. The programme highlighted how many very wealthy individuals are able to avoid paying millions of pounds in tax. I take my hat of to Sir Phillip Green though his wife received the largest corporate dividend payment ever £1.2 billion and she lives in a tax free haven, Monaco, well done, a saving of £285 million pounds to the UK taxpayer.

But the good news is that the Coalition are to crackdown on offshore tax avoidance, yeah right.

.... i kind of know one of the people you have mentioned... via family. luckily don't have to spend much time with them as i feel so ethically removed from their ideology but their family is really lovely... conflicted!

I caught the last half of it and frowned all the way through.

Dodgy feckers.

ooops meant to say " £285 million pounds tax saving"

Mrs.Green is one lucky woman

Omaoma, their family might well be lovely but what on earth has that got to do with it??

lets hope Mrs.Green is'nt claiming any UK portable benefits either

... it makes it harder to criticise somebody when you have a full view of their day-to-day charmingness, intelligence, extensive charity work... i know, it makes no difference to the fact he should pay his bloody taxes! Was just saying commenting that it makes me feel very conflicted in this kind of discussion where normally I am the first to shoot people down. Prob not relevant to other people...

That programme did make me want to spit. Glad that the programme was made though and that this sort of thing is actually talked about. What really galls is George Osbourne talking about benefit cheats 'mugging' tax payers...whilst by comparison, the kind of tax avoidance he personally practices is the equivalent of stealing a tax-payer's entire house when they're not looking

I'd join in the rich-bashing but I'd be guilty of hypocrisy. Not rich but have been avoiding tax for years by means of Cash ISAs, pension contributions, timing the use of CGT allowances occasionally and so forth. Don't have enough cash to warrant sending family members to live in Monaco but, then again, I've never bashed down the door to HM Treasury demanding to pay a penny more in tax than I've been asked for either.

If the rules exist, don't criticise people for staying within them and saving a few quid in the process. If the law stinks, change the law....

Yeah, I loved that phrase about benefit fraudsters (as opposed to benefit scroungers but obviously they're on his list too) 'mugging the tax payer'. I wonder if they've ever looked into WHY people claim fraudulently?

Also, £5 billion a year in benefit fraud compared to £16 billion in unclaimed income related benefits? Suits them just fine to keep quiet about people missing out on money they're entitled to.

What do you mean 'keeping quiet'? The Direct.Gov website is incredibly comprehensive and there are all kinds of agencies and busybodies that will help people apply for benefits. I read recently on MN a rather huffy post from a woman that had never claimed their Child Benefit 'because they didn't need it'... but was cross that this didn't seem to be appreciated.

I think Spotty means that the government are happy to bang on about benefit 'scroungers' but never contextualise that by directly referencing the 3x that amount that honest people don't claim - many of whom because they choose not too.

I think there's a massive difference between using your ISA allowance and pretending that your business is based in a country which you never set foot in, or structuring a company to pay dividends to avoid NI. That's evasion on a corporate scale.

And 'if the rules exist...' Well. I wonder why all the big businesses came out today in favour of the Conservative cuts? Could it possibly be because the alternative to cuts is much closer scrutiny of corporate tax responsibility? Who makes the tax laws? Unfortunately, I think people like Lord Ashcroft have a pretty big hand in maintaining the tax laws. How on earth do we change the law when the government is headed by (George Osbourne) funded by (Lord A) and advised by (Philip Green, Lord Browne) a load of HUGE tax evaders?

No-one who owns an ISA can have a go at anyone for tax avoidance. I have several and so do most people I know so it would be hypocritical in the extreme for me to have a go at those mentioned(provided dispatches findings were accurate).

That's as overly simplistic as saying no-one who's ever incurred interest on a credit card can criticise the Government for the deficit.

An ISA is a perfectly legal financial product which everybody is entitled to and has equal, easy access to. They exist to encourage us to save. Structuring your entire business so that you appear to be based in Monaco takes specialist and expensive legal accountants with intimate knowledge of the grey areas of international tax laws.

I know the the type of tax avoidance that some wealthy individuals/companies engage in is far more complicated then an ISA but I can hardly criticise them when I'm doing it myself via ISAs.

ISAs are totally different - they are a mechanism set up by the British Government, in order to encourage saving by allowing a certain amount each year to be tax free.

They are NOT the same as pouring hundreds of millions of pounds into an offshore bank account to avoid income tax. You just can't compare the two.

The two can be compared because the principle is exactly the same. If we can legally invest in a tax-free ISA why would we put our money in a tax-paying savings account? If the possibility exists to legally register a company in the Channel Islands and pay less tax, why would someone opt to do otherwise?

If the law were to be changed by the British Government on offshore banks and other financial grey areas then tax advisers would have to comply and find other tax-efficient places to keep money.

The difference is in intent. Whilst it may be technically legal to put money in offshore bank accounts, it is not the intention of the law that this should be permissible. Whereas ISAs were created BY the government, expressly for the purpose of allowing a certain amount of tax free savings per year. It is limited in amount, will not result in extraordinarily wealthy people squirreling away hundreds of millions of pounds, overseas, and I don't actually believe you can't see the difference.

It's the equivalent of me saying to my kids that they have to give me 10% of their 'income' (ds1 at least earns money), but that I will let them keep £2 a week before applying the 10%. One child does that - puts £2 in the money box, gives me 10% of the rest. The other child keeps £2, and gives the rest to his friend to look after, and says to me "Ha ha, you can't take my money now, you can't touch it", but he still HAS the money, he can still SPEND it. He hasn't broken any 'rules' but it is sneaky and despicable.

Can you really not see the difference?

Chil1234, according to the programme the law was going to be changed by Labour to prevent companies from setting up their registered offices in tax free havens such as The Cayman Islands, but recently the coalition opted against this ruling. So what does George Osbourne mean when he says that the coalition are going to crackdown on offshore tax avoidance? Who are they specifically talking about?
I am also confused as to why Sir Phillip Green was chosen to advise the government on saving money, when this government are making it clear that they want to crackdown on those who are using offshore tax havens like Sir Green and his family for example? So confusing, do you think there is more to this than meets the eye I'll go as far as to say do you think Sir Green is a large party donor?
The tax saving of £285 million pounds was just for one year I believe,vast amount of money going out of the country legally, always assumed TopShop was & BHS were registered in Britain.
As the owner of Tabitha Ltd Mrs. Green must be a seriously wealthy lady, what she must be earning tax free over say 5 years, must be mind boggling.
I would like to know how easy it is to register your company in a Tax Haven, I know several people who run their own business's here in the UK but not on the scale of TopShop or BHS, if this legal tax avoidance is available to any UK company then I think they should all take advantage of it.

But the question remains who are they cracking down on?

Chil1234 It is very different to "legally invest in a tax-free cash ISA" from bringing in laws where other must less well off people have to pay more than fair share of tax, while the legislators (in this case of Mr Osborne) protect their own minority interest. It is hypocrisy at best.

Beaware - setting up and running offshore companies is not difficult at all, just relatively expensive. You do need to comply with local laws which means that not every business can register offshore.

"I don't actually believe you can't see the difference."

Of course I can see the difference. The opportunities to pay less tax are significantly lower for the average Joe than they are for a billionaire. But I still come back to the point that if the law is structured (intentionally or unintentionally) so that a billionaire's very expensive tax-advising team can find chinks in the rules that allow savings to be made then it was badly written.

And I'd quite like that billionaire advising the government, actually. Along with other successful business people who work in the real world & understand how to squeeze the pips out of every penny of expenditure. We can all see why it's a stupid idea to pay £2000 for a laptop for one government department and £400 for and identical one in another. Why can't the people heading up those departments?

I would go along with the idea that people will always try to avoid tax whether that is through ISA's or offshore tax havens.

However, equally, I don't think George Osborne, (avoiding tax, benefiting from the cushion provided by his family wealth), is in any way morally superior to somebody who maximises their benefit claims and benefits from the (much smaller) cushion provided by the state.

We are not 'ALL IN IT TOGETHER' because George Osborne will never have to decide which member of his family really needs a winter coat, or do without proper food himself so that his children can eat, or worry about turning on the heating.

I also think that the reason that some people become incredibly rich is because money attracts money, and the more power you have, the more able you are to funnel all the money towards yourself. They aren't actually that much better at managing the small change than anybody else. I say this having worked in finance departments in a variety of industries, and seen what goes through expenses.

I don't have any problem with people who engage in tax avoidance as someone who owns ISAs. Similarily I don't mind people who claim benefits provided it isn't benefit fraud. You can't blame anyone for wanting to exploit a system to their own advantage (provided it is legal).

"We are not 'ALL IN IT TOGETHER' because George Osborne will never have to decide which member of his family really needs a winter coat, or do without proper food himself so that his children can eat, or worry about turning on the heating"

So we should only ever allow someone to run for office if they've lived rough or on benefits?

I will eat my hat if the tories do anything about closing the legal loopholes which allow their cronies to save £millions in taxes.