Paradise Papers (& Panama Papers)

kingstongraham

Rick Chasey wrote:

Sure Stevo, but it's more than just tax, isn't it? I know that's a pre-occupation, but usually with offshore structures, as well as lacking much tax, they also lack a lot of transparency, and that is often the real draw.

There's a lot of murky behaviour that goes on in those places, and the lack of regulation or transparency isn't in the public's interest.

If it's all legal, why the secrecy?

And why in a British Overseas Territory?

rick_chasey

Some people here are suggesting that because shoving money there isn't illegal, they ought not be at the receiving end of public opprobrium.

So I ask those people if that's the case, why aren't companies that do this more public about it?

hopkinb

Stevo 666 wrote:

mamba80 wrote:

Without international co-operation, very little.

See my point above about what is actually happening currently. This on top of all other anti-avoidance measures which are pretty extensive internationally and have cross border application where needed.

You're not the first on here to assume that the answer is 'not a lot' - which is simply wrong.

Add in the UK Code of Practice on taxation for banks and the new Corporate Criminal Offence for failing to prevent tax evasion.

Banks with a presence in the UK have to sign up to the first of these, which basically commits them have robust governance structures in place, and to never do any tax planning which achieves a result contrary to the intentions of parliament. So Stevo's example above is actually the case for banks - a bank may well enter into a legal transaction (travelling at 49 mph), but if HMRC decide on review that the result of that transaction goes against what Parliament intended (even if not set down in statute), then that's illegal (travelling at 51 mph).

The Corporate Criminal Offence makes it easier to prosecute company officers if an organisation is involved in facilitating the criminal evasion of tax. It's making everyone here sh*t their breeches.

So, there's plenty going on, with all sorts of cooperation internationally.

john80

KingstonGraham wrote:

john80 wrote:

Surrey Commuter wrote:

john80 wrote:

It is starting to maybe dawn on the average joe that all this trickle down economics is not the best way to run a country. The money which we as a population generate as consumers simply goes offshore where a small percentage is brought back to buy goods for a very limited number of people. If you sell these high end products then great but for the majority this has zero benefit to them. Mass consumerism drives an economy to the benefit of all.

Maybe it is time for a flat rate 20% tax that you just can't avoid and if that means that you don't do business in Britain then so be it as lets face there is plenty of individuals that will be happy to take the gap left behind. If you London house goes up 100% and is owned by a foreign entity then that fine but give the exchequer 20% before you stash it in the Bahamas. If you think there is a IP/trademark claim on how you serve coffee then this third party based in a tax haven can get their IP/trademark payment after it has been taxed at 20%.

Whilst the wealthy have the power to frame the debate they are I believe reaching a tipping point where if they had to come down and defend the position on question time then it would get pretty funny pretty quickly. Democracies are supposed to stop the 1% taking the wee-wee and they are only a few years from getting pitchforked.

consumers don't generate money

what would you tax at 20%

Wages and profit of any nature with zero exceptions. Pretty basic really. If you sell a packet of biscuits or an app then pay 20% on what you profited in doing so. Don't want to pay 20% tax then don't engage in the market and go to other more accommodating nations losing a 60million population market in the process. If you have a better solution then I am all ears.

Define profit.

1.a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something

Did you really need me to define that for you. For example paying a royalty fee to a entity in a zero tax economy to reduce your tax within the UK to around zero does not seem to be in the interests of the average UK punter. Owning a property in the UK as above also does not seem too good for your average UK punter. I am sure there will be a member of the super rich along in a minute to tell me how we need this and they massive investments we are getting into the UK from all this zero tax profiteering.

mamba80

Stevo 666 wrote:

mamba80 wrote:

Without international co-operation, very little.

See my point above about what is actually happening currently. This on top of all other anti-avoidance measures which are pretty extensive internationally and have cross border application where needed.

You're not the first on here to assume that the answer is 'not a lot' - which is simply wrong.

re Tax Avoidance.... even Labour put the figure at under 3 billion per year, how much more realistically could the Gov tighten up UK law to reduce this further without international co-op?

£3 billion, would run the NHS for about 10days, so very little.

hopkinb

mamba80 wrote:

Stevo 666 wrote:

mamba80 wrote:

Without international co-operation, very little.

See my point above about what is actually happening currently. This on top of all other anti-avoidance measures which are pretty extensive internationally and have cross border application where needed.

You're not the first on here to assume that the answer is 'not a lot' - which is simply wrong.

re Tax Avoidance.... even Labour put the figure at under 3 billion per year, how much more realistically could the Gov tighten up UK law to reduce this further without international co-op?

£3 billion, would run the NHS for about 10days, so very little.

Latest figures suggest £34bn, as follows:

slowbike

john80 wrote:

KingstonGraham wrote:

what would you tax at 20%

Wages and profit of any nature with zero exceptions. Pretty basic really. If you sell a packet of biscuits or an app then pay 20% on what you profited in doing so. Don't want to pay 20% tax then don't engage in the market and go to other more accommodating nations losing a 60million population market in the process. If you have a better solution then I am all ears.

john80 wrote:

KingstonGraham wrote:

Define profit.

1.a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something

Did you really need me to define that for you. For example paying a royalty fee to a entity in a zero tax economy to reduce your tax within the UK to around zero does not seem to be in the interests of the average UK punter. Owning a property in the UK as above also does not seem too good for your average UK punter. I am sure there will be a member of the super rich along in a minute to tell me how we need this and they massive investments we are getting into the UK from all this zero tax profiteering.

So simplistic ...

Can we offset capital costs against profit too? What about other non-direct costs?

Very few people will pay more tax than is required of them. Whilst I don't agree with the offshoring method of avoiding tax - it's not illegal (or wasn't) - so it's up to the government to revise the tax laws if they so desire.

Making the tax laws really simple would just create uproar in the courts as every accountant thinks of new loopholes and challenges the government - so whilst it would be nice to have a really simple tax system like you describe - in reality it won't happen because it'll be just as complex as the one it replaces.

hopkinb

hopkinb wrote:

mamba80 wrote:

Stevo 666 wrote:

mamba80 wrote:

Without international co-operation, very little.

See my point above about what is actually happening currently. This on top of all other anti-avoidance measures which are pretty extensive internationally and have cross border application where needed.

You're not the first on here to assume that the answer is 'not a lot' - which is simply wrong.

re Tax Avoidance.... even Labour put the figure at under 3 billion per year, how much more realistically could the Gov tighten up UK law to reduce this further without international co-op?

£3 billion, would run the NHS for about 10days, so very little.

Latest figures suggest £34bn, as follows:

So a bigger problem to the exchequer is small companies paying people off payroll, or buggering up their admin, or people paying builders in cash, or restaurants not declaring their cash sales, or drug dealers & hookers falling through the net.

TheBigBean

I think there are two places where HMRC should challenge this if the laws are in place. One is on transfer to the Mauritius company - why is that a tax deductible expense? What service has the company provided? Isn't it simply a dividend? Secondly, and much harder, loans which cannot be repaid, and have no intention of being repaid should be subject to tax.

kingstongraham

john80 wrote:

For example paying a royalty fee to a entity in a zero tax economy to reduce your tax within the UK to around zero does not seem to be in the interests of the average UK punter.

Which company were you thinking of with this example? I believe this would already not be justified.

surrey_commuter

john80 wrote:

Surrey Commuter wrote:

john80 wrote:

It is starting to maybe dawn on the average joe that all this trickle down economics is not the best way to run a country. The money which we as a population generate as consumers simply goes offshore where a small percentage is brought back to buy goods for a very limited number of people. If you sell these high end products then great but for the majority this has zero benefit to them. Mass consumerism drives an economy to the benefit of all.

Maybe it is time for a flat rate 20% tax that you just can't avoid and if that means that you don't do business in Britain then so be it as lets face there is plenty of individuals that will be happy to take the gap left behind. If you London house goes up 100% and is owned by a foreign entity then that fine but give the exchequer 20% before you stash it in the Bahamas. If you think there is a IP/trademark claim on how you serve coffee then this third party based in a tax haven can get their IP/trademark payment after it has been taxed at 20%.

Whilst the wealthy have the power to frame the debate they are I believe reaching a tipping point where if they had to come down and defend the position on question time then it would get pretty funny pretty quickly. Democracies are supposed to stop the 1% taking the wee-wee and they are only a few years from getting pitchforked.

consumers don't generate money

what would you tax at 20%

Wages and profit of any nature with zero exceptions. Pretty basic really. If you sell a packet of biscuits or an app then pay 20% on what you profited in doing so. Don't want to pay 20% tax then don't engage in the market and go to other more accommodating nations losing a 60million population market in the process. If you have a better solution then I am all ears.

so you want to tax profit at 20%

so you sell make a packet of biscuits in the UK and sell it for £1. But you make a loss £1.10 because you bought the mix from a Luxembourg subsidiary for £1:10.

Profit is so last century - why not tax turnover?

kingstongraham

Easy answer, just cancel Mrs Brown's Boys, then everyone's happy.

TheBigBean

European Economics Affairs Commissioner Pierre Moscovici has denounced the tax avoidance detailed in papers as "shocking" and called for a blacklist.

"This new scandal shows once again that some companies and rich individuals are ready to do anything to not pay tax," said Mr Moscovici.

"In light of these shocking revelations, I call on member states to rapid

Luxembourg?

surrey_commuter

TheBigBean wrote:

European Economics Affairs Commissioner Pierre Moscovici has denounced the tax avoidance detailed in papers as "shocking" and called for a blacklist.

"This new scandal shows once again that some companies and rich individuals are ready to do anything to not pay tax," said Mr Moscovici.

"In light of these shocking revelations, I call on member states to rapid

Luxembourg?

In fairness to the EU they have fought Lux and Eire through the courts over this issue.

surrey_commuter

john80 wrote:

KingstonGraham wrote:

john80 wrote:

Surrey Commuter wrote:

john80 wrote:

It is starting to maybe dawn on the average joe that all this trickle down economics is not the best way to run a country. The money which we as a population generate as consumers simply goes offshore where a small percentage is brought back to buy goods for a very limited number of people. If you sell these high end products then great but for the majority this has zero benefit to them. Mass consumerism drives an economy to the benefit of all.

Maybe it is time for a flat rate 20% tax that you just can't avoid and if that means that you don't do business in Britain then so be it as lets face there is plenty of individuals that will be happy to take the gap left behind. If you London house goes up 100% and is owned by a foreign entity then that fine but give the exchequer 20% before you stash it in the Bahamas. If you think there is a IP/trademark claim on how you serve coffee then this third party based in a tax haven can get their IP/trademark payment after it has been taxed at 20%.

Whilst the wealthy have the power to frame the debate they are I believe reaching a tipping point where if they had to come down and defend the position on question time then it would get pretty funny pretty quickly. Democracies are supposed to stop the 1% taking the wee-wee and they are only a few years from getting pitchforked.

consumers don't generate money

what would you tax at 20%

Wages and profit of any nature with zero exceptions. Pretty basic really. If you sell a packet of biscuits or an app then pay 20% on what you profited in doing so. Don't want to pay 20% tax then don't engage in the market and go to other more accommodating nations losing a 60million population market in the process. If you have a better solution then I am all ears.

Define profit.

1.a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something

Did you really need me to define that for you. For example paying a royalty fee to a entity in a zero tax economy to reduce your tax within the UK to around zero does not seem to be in the interests of the average UK punter. Owning a property in the UK as above also does not seem too good for your average UK punter. I am sure there will be a member of the super rich along in a minute to tell me how we need this and they massive investments we are getting into the UK from all this zero tax profiteering.

I think twatting around here and being a member of the super rich are mutually exclusive.

I know a senior Treasury civil servant who said he could see the point of a sweetheart deal to land the EMEA HQ of Google and Facebook. What he put down to incompetence was not getting a full whack out of the likes of Starbucks because frankly who cares if they are here or not.

mamba80

hopkinb wrote:

mamba80 wrote:

Stevo 666 wrote:

mamba80 wrote:

Without international co-operation, very little.

See my point above about what is actually happening currently. This on top of all other anti-avoidance measures which are pretty extensive internationally and have cross border application where needed.

You're not the first on here to assume that the answer is 'not a lot' - which is simply wrong.

re Tax Avoidance.... even Labour put the figure at under 3 billion per year, how much more realistically could the Gov tighten up UK law to reduce this further without international co-op?

£3 billion, would run the NHS for about 10days, so very little.

Latest figures suggest £34bn, as follows:

i said AVOIDANCE, not a theoretical tax gap of 34bn

TheBigBean

Surrey Commuter wrote:

TheBigBean wrote:

European Economics Affairs Commissioner Pierre Moscovici has denounced the tax avoidance detailed in papers as "shocking" and called for a blacklist.

"This new scandal shows once again that some companies and rich individuals are ready to do anything to not pay tax," said Mr Moscovici.

"In light of these shocking revelations, I call on member states to rapid

Luxembourg?

In fairness to the EU they have fought Lux and Eire through the courts over this issue.

And yet, everything I buy from Amazon still seems to notionally come from Luxembourg despite Amazon not actually selling anything there. Most financial structures seem to go through Luxembourg. Whining about a few wealthy individuals setting up risky structures seems to be going after very small fish to me.

tangled_metal

Dinyull wrote:

Robert88 wrote:

OK let's cut the bleeding heart crap.

How do I get onto this scam?

You need over £300k to invest otherwise fees would wipe it out. Still in?

Give me Stevo's credit cards I might get close! Actually don't. The only people I know personally in the financial sector on big money are always close to maxed out on credit cards. What with mortgage payments, school fees, nanny's wage/car costs, etc all coming out of credit cards there's not much left each month for scamming. Living off other ppl's money seems to be a habit.

rick_chasey

TheBigBean wrote:

And yet, everything I buy from Amazon still seems to notionally come from Luxembourg despite Amazon not actually selling anything there. Most financial structures seem to go through Luxembourg. Whining about a few wealthy individuals setting up risky structures seems to be going after very small fish to me.

Is more the murkiness behind those structures, no?

Why go all the way to some island when you have Luxembourg on your doorstep?

tangled_metal

Would you want to go to Luxembourg or Bahamas to see your trust managers / financial fiddling manager? Seriously, if it's wealthy individuals it's a holiday on expenses or some write off. If it's company then it's a company jolly on expenses. I'm sure you'd never 4 star Bahamas over Luxembourg.

See it's not that murky that they choose Bahamas over Luxembourg. Makes sense to me.

TheBigBean

Tangled Metal wrote:

Would you want to go to Luxembourg or Bahamas to see your trust managers / financial fiddling manager? Seriously, if it's wealthy individuals it's a holiday on expenses or some write off. If it's company then it's a company jolly on expenses. I'm sure you'd never 4 star Bahamas over Luxembourg.

See it's not that murky that they choose Bahamas over Luxembourg. Makes sense to me.

You can have both. No one actually goes to Luxembourg.

TheBigBean

Rick Chasey wrote:

TheBigBean wrote:

And yet, everything I buy from Amazon still seems to notionally come from Luxembourg despite Amazon not actually selling anything there. Most financial structures seem to go through Luxembourg. Whining about a few wealthy individuals setting up risky structures seems to be going after very small fish to me.

Is more the murkiness behind those structures, no?

Why go all the way to some island when you have Luxembourg on your doorstep?

I suspect beneficial ownership is harder to conceal in Luxembourg. That doesn't mean you can't have the benefits of both.

Yes it is murky, but again, when I buy something from Amazon which was made in China, shipped to the UK, and sold in the UK, I really struggle to see the non-murkiness in pretending that it has something to do with Luxembourg. Unless you mean murky in terms of bribery, corruption etc. in which case I struggle to see it as likely that none of that was involved in my product's production, or lobbying that goes on in various capitals.

TheBigBean

Incidentally, I am not defending anyone involved in the Paradise papers.

tangled_metal

TheBigBean wrote:

Tangled Metal wrote:

Would you want to go to Luxembourg or Bahamas to see your trust managers / financial fiddling manager? Seriously, if it's wealthy individuals it's a holiday on expenses or some write off. If it's company then it's a company jolly on expenses. I'm sure you'd never 4 star Bahamas over Luxembourg.

See it's not that murky that they choose Bahamas over Luxembourg. Makes sense to me.

You can have both. No one actually goes to Luxembourg.

Yes but dealing with your offshore accounts could be a very nice excuse for a holiday. Bahamas is my preference for that reason.

rick_chasey

TheBigBean wrote:

Rick Chasey wrote:

TheBigBean wrote:

And yet, everything I buy from Amazon still seems to notionally come from Luxembourg despite Amazon not actually selling anything there. Most financial structures seem to go through Luxembourg. Whining about a few wealthy individuals setting up risky structures seems to be going after very small fish to me.

Is more the murkiness behind those structures, no?

Why go all the way to some island when you have Luxembourg on your doorstep?

. Unless you mean murky in terms of bribery, corruption etc. .

Yeah I do.

The tax thing is one thing; as you say, it happens elsewhere.

It's the corrupt aspect that is more interesting.

mr_goo

Stevo 666 wrote:

Ballysmate wrote:

Mr Goo wrote:

Please discuss. Especially those of you in the city commercial sector. Isn't there a corporate accountant on here that is known to help reduce the taxation impact for his companys' clients? How does he square the circle, knowing that tax that could and should have been paid into the Inland Revenue could have gone towards things like cancer research. Which I'm sure other forum members on here have first hand experience of and would appreciate.
Not a personal attack, but a question of Is It Moral?

Moral? Irrelevant. The only question is legality. If legal no problem. If not, offenders should face action.

I'm guessing Goo is referring to someone else as I don't have clients?

I guess we will have to see exactly what the people/organisations have been doing, which ones are relevant to the UK and whether it is legal or not. If not legal, then chuck the book at them.

If its legal then legislate it away. You can't have a properly functioning tax system where you do something that is legal but anyone can come along and say 'Oh but in my opinion, you're not paying enough'. Imagine going past a speed camera on a stretch of road: the speed limit is 50mph and you're doing 49mph. A week later you get a letter saying you're getting fined because, although you were under the speed limit, in the opinion of the bloke checking the camera records you were going too fast...

As a judge has said recently in a tax case, morality has no place in this court room.

Goo - how much money do you think we will raise by doing this? Or maybe how much do you think is being avoided this way?

I really have no idea. But I know for sure that my brother in law earns 2 to 3 times basic more than me. However as he is a financial director he has used the system to his advantage where he pays less tax than me. That's just one person. How one extrapolateside that out and comes to a finite balance owed to IR I've no idea.

Matthewfalle

sounds a lot like jealousy there ......

kingstongraham

Mr Goo wrote:

I really have no idea. But I know for sure that my brother in law earns 2 to 3 times basic more than me. However as he is a financial director he has used the system to his advantage where he pays less tax than me. That's just one person. How one extrapolateside that out and comes to a finite balance owed to IR I've no idea.

That doesn't add up. I can see how he would pay less than you might expect, but if he is financial director of a UK company that is employing him (rather than being a company owner of a small company), it would be tricky to reduce tax down to below that of someone earning half as much. Most legal ways of getting money out of a company into a personal bank account gets taxed.

What does he do to reduce it?

TheBigBean

KingstonGraham wrote:

Mr Goo wrote:

I really have no idea. But I know for sure that my brother in law earns 2 to 3 times basic more than me. However as he is a financial director he has used the system to his advantage where he pays less tax than me. That's just one person. How one extrapolateside that out and comes to a finite balance owed to IR I've no idea.

That doesn't add up. I can see how he would pay less than you might expect, but if he is financial director of a UK company that is employing him (rather than being a company owner of a small company), it would be tricky to reduce tax down to below that of someone earning half as much. Most legal ways of getting money out of a company into a personal bank account gets taxed.

What does he do to reduce it?

Have it paid offshore? Build up cash in a company and then liquidate it (now harder)? Whatever the latest fashion is that I have no idea about is.

Matthewfalle

doesn't matter if you get it paid offshore - you still have to disclose worldwide income. you can have bank accounts everywhere and you still have to disclose what you earn - I have offshore accounts and it makes no difference.

he just probably offsets some against ISAs or whstever,a bit against school fees, deferred bonus options. A good accountant does the rest.

The Daily Mailers such as Goo think its all black magic and illegal - generally its not.