Paradise Papers (& Panama Papers)

Stevo_666

Surrey Commuter 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.

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?

You mean like VAT? A 20th century invention.

Or come to think of, you could class income tax as a tax on our individual turnover as there aren't many deductions to be had.

Add those two up and you account for a large proportion of tax revenues.

kingstongraham

TheBigBean wrote:

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.

Someone appointed as a finance director of a company would not be able to claim they were compliant with IR35.

Stevo_666

Matthewfalle wrote:

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.

To be fair, a lot of the Guardian set regard it in the same way and are similarly wrong.

A little knowledge is a dangerous thing...especially when it comes to tax.

surrey_commuter

TheBigBean wrote:

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.

his use of the words "know for sure" implies he is guessing and therefore is guessing what he pays in tax. Therefore is far more likely he has upped his AVCs and done a little bragging about tax efficient VCTs. This may have reduced his overall % but unlikley to have led to him paying less tax than his chippy brother in law.

Stevo_666

Rick Chasey wrote:

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?

You'll probably find it is more about high earning individuals who think they are doing clever planning but they aren't.

As shown by the stat that Hoppy posted on the last page, most of it is down to individuals and small businesses.

Big corporates know this sort of stuff doesn't work and typically aren't interested in it anyway.

surrey_commuter

Stevo 666 wrote:

Surrey Commuter 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.

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?

You mean like VAT? A 20th century invention.

Or come to think of, you could class income tax as a tax on our individual turnover as there aren't many deductions to be had.

Add those two up and you account for a large proportion of tax revenues.

my answer was partly tongue in cheek to suggest the complexity of the issue. However my understanding of VAT is that it is anything but a tax on turnover.

Matthewfalle

Surrey Commuter wrote:

TheBigBean wrote:

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.

his use of the words "know for sure" implies he is guessing and therefore is guessing what he pays in tax. Therefore is far more likely he has upped his AVCs and done a little bragging about tax efficient VCTs. This may have reduced his overall % but unlikley to have led to him paying less tax than his chippy brother in law.

Ah - I forgot it was Goo.

"Know for sure" means "gets paid more than me and am jealous and a bit insecure and have started to notice my wife laugh a little bit harder at his jokes and show just a little bit more décolletage when we go round to their house (with the new conservatory, car parked outside and hot tub).

Sounds just like he went to see a good financial planner, although being a financial director he probably knows a smudge or two about this sort of thing.

As the bloke from Appleby said today, really simple structures aren't illegal but they are effective.

rick_chasey

Stevo 666 wrote:

Rick Chasey wrote:

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?

You'll probably find it is more about high earning individuals who think they are doing clever planning but they aren't.

As shown by the stat that Hoppy posted on the last page, most of it is down to individuals and small businesses.

Big corporates know this sort of stuff doesn't work and typically aren't interested in it anyway.

Am I the only one who read about glencore in this?

FishFish

KingstonGraham wrote:

TheBigBean wrote:

KingstonGraham wrote:

Mr Goo wrote:

Someone appointed as a finance director of a company would not be able to claim they were compliant with IR35.

I think that rules for directors - even non execs - require them to be paid via payroll in the UK.

Matthewfalle

Rick Chasey wrote:

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?

Errrr - they are. Just pick up the phone to any of the million trust companies in Switzerland, Luxembourg, the Channel Islands, etc. it's not a great secret.

robert88

Stevo 666 wrote:

Robert88 wrote:

OK let's cut the bleeding heart crap.

How do I get onto this scam?

I like your honesty

PM me with your credit card details...

Join the queue - Equifax have written me saying they've been hacked and my details are out there :shock:

Stevo_666

Surrey Commuter wrote:

my answer was partly tongue in cheek to suggest the complexity of the issue. However my understanding of VAT is that it is anything but a tax on turnover.

It is a turnover based tax, but ultimately falls on the end consumer, non VAT registered traders or VAT exempt businesses such as banks.

Stevo_666

Matthewfalle wrote:

Rick Chasey wrote:

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?

Errrr - they are. Just pick up the phone to any of the million trust companies in Switzerland, Luxembourg, the Channel Islands, etc. it's not a great secret.

I think we also need to consider the automatic exchange of information agreements covering over 100 territories including places such as Jersey, Cayman Islands etc - this information includes details of bank accounts etc which are supplied to the relevant tax authorities in signatory countries. UK led the way in getting these in place.

I'm not sure how Rick thinks that this is murky or inadequate?

Stevo_666

mamba80 wrote:

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

Mamba - the answer is there above. Total annual tax loss in the UK due to tax avoidance by all tax payers = £1.7bn per year. So if we closed down all avoidance schemes, we could repay the national debt in roughly 1,000 years from now. Kinda puts it into perspective, don't you think?

Matthewfalle

Stevo 666 wrote:

Matthewfalle wrote:

Rick Chasey wrote:

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?

Errrr - they are. Just pick up the phone to any of the million trust companies in Switzerland, Luxembourg, the Channel Islands, etc. it's not a great secret.

I think we also need to consider the automatic exchange of information agreements covering over 100 territories including places such as Jersey, Cayman Islands etc - this information includes details of bank accounts etc which are supplied to the relevant tax authorities in signatory countries. UK led the way in getting these in place.

I'm not sure how Rick thinks that this is murky or inadequate?

This exactly - I had to sign declarations for all this jazz ages ago. I'm trying to remember offhand the US one that came in a few years ago that caused a mammoth nightmare due to the amount of paperwork. Ah - FATFA - that's the baby.

It's because Rick doesn't understand it and is seeing outrage for outrage's sake.

Person has money. Person uses the system legally to pay exactly to the last Dollar and dime what he has to. I pay every cent of tax tha I have to and don't mind doing it. That's why I have an accountant to make sure I am a hundred per cent legit.

It's not even very complicated.

john80

TheBigBean wrote:

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.

I think there key to all of this is seeing what if any purpose the transaction performs other than saving tax. If it has no logic other than this then it is questionable.

Matthewfalle

john80 wrote:

TheBigBean wrote:

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.

I think there key to all of this is seeing what if any purpose the transaction performs other than saving tax. If it has no logic other than this then it is questionable.

This is the most simple scheme ever and has been going forever - used by everyone.

Loans at a market rate between employment company wholly owned 100% by an overlying independent trust with beneficiaries and settlor that aren't the named recipients of the loans - directors of the company control the assets of the company that have been put into the company by the shareholders of the company - they loan the money to whoever they want then do whatever they want with the loans.

Simples, innit.

You mean you don't have one?

Much like building a bicycle, it's not exactly rocket science.

mr_goo

Matthewfalle wrote:

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.

I don't read papers Matthew. I get my info from various news websites ie BBC/Sky/CNN/RT. I find that one gets a balanced view.

Stevo_666

Matthewfalle wrote:

Stevo 666 wrote:

Matthewfalle wrote:

Rick Chasey wrote:

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?

Errrr - they are. Just pick up the phone to any of the million trust companies in Switzerland, Luxembourg, the Channel Islands, etc. it's not a great secret.

I think we also need to consider the automatic exchange of information agreements covering over 100 territories including places such as Jersey, Cayman Islands etc - this information includes details of bank accounts etc which are supplied to the relevant tax authorities in signatory countries. UK led the way in getting these in place.

I'm not sure how Rick thinks that this is murky or inadequate?

This exactly - I had to sign declarations for all this jazz ages ago. I'm trying to remember offhand the US one that came in a few years ago that caused a mammoth nightmare due to the amount of paperwork. Ah - FATFA - that's the baby.

It's because Rick doesn't understand it and is seeing outrage for outrage's sake.

Person has money. Person uses the system legally to pay exactly to the last Dollar and dime what he has to. I pay every cent of tax tha I have to and don't mind doing it. That's why I have an accountant to make sure I am a hundred per cent legit.

It's not even very complicated.

Let's be clear though, as the numbers show this is not the big issue in terms of plugging our 'tax gap'. But it makes for good press and it gets the indignant types wound up very easily.

Unfortunately the anti-capitalist/NGO propaganda against the corporate sector is quite easy to swallow for those who do not fully understand the subject.

Given that facts seem to be somewhat lacking in this debate, here's the full report with some useful facts which is what Hoppy quoted part of earlier:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/655097/HMRC-measuring-tax-gaps-2017.pdf
The graphs on pages 5, 8 10, 11 and 12 are quite illuminating.

mr_goo

The Isle of Man has approx 1000 private jets in its civil registry. Some of them unable to actually land on the island!!! Now Lewis Hamilton will be used as a high profile example of a tax dodger using an 'M' plate for his jet. HM Gov needs to close the door on this and kick it out.

john80

KingstonGraham wrote:

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.

I was under the impression that a lot of significant companies do this trick. Apple's IP for example is registered to an offshore company and all their products using this IP then pay a royalty hence reducing profit in the national businesses. They then declare the profit as paid tax at the relevant us rate on the books as a future liability in the event the company had to bring the money back to the US. If they bring some money back to US to develop the next product then this goes against any future US profit. Given it is unlikely they will ever bring their reserves back to the US they effectively don't have to pay this liability. Christ even Costa do an element of this and it is not like their business can remote sell us coffee from a tax haven. Laughable really.

Stevo_666

Mr Goo wrote:

The Isle of Man has approx 1000 private jets in its civil registry. Some of them unable to actually land on the island!!! Now Lewis Hamilton will be used as a high profile example of a tax dodger using an 'M' plate for his jet. HM Gov needs to close the door on this and kick it out.

What are you talking about Goo?

Stevo_666

john80 wrote:

KingstonGraham wrote:

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.

I was under the impression that a lot of significant companies do this trick. Apple's IP for example is registered to an offshore company and all their products using this IP then pay a royalty hence reducing profit in the national businesses. They then declare the profit as paid tax at the relevant us rate on the books as a future liability in the event the company had to bring the money back to the US. If they bring some money back to US to develop the next product then this goes against any future US profit. Given it is unlikely they will ever bring their reserves back to the US they effectively don't have to pay this liability. Christ even Costa do an element of this and it is not like their business can remote sell us coffee from a tax haven. Laughable really.

No, it is actually pretty rare but the examples are high profile and get the media attention.

That said, ownership of IP in a particular is perfectly legitimate provided that you have the relevant substance there and the charges are at a market rate.

As for the bit about the US, most US companies tend not to dividend profits back as they get taxed at nearly 40%. Although the Trump tax reforms are proposing to cut this to get the cash back in the US where it can be reinvested.

Matthewfalle

Mr Goo wrote:

The Isle of Man has approx 1000 private jets in its civil registry. Some of them unable to actually land on the island!!! Now Lewis Hamilton will be used as a high profile example of a tax dodger using an 'M' plate for his jet. HM Gov needs to close the door on this and kick it out.

So what? They could have a billion - it's only a bleedin' registry.

Lloyds of London have a squillion oil tankers registered there but I don't see them doubled parked at the Isle of Dogs.

Dude, you really need to stop.

Matthewfalle

Mr Goo wrote:

Matthewfalle wrote:

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.

I don't read papers Matthew. I get my info from various news websites ie BBC/Sky/CNN/RT. I find that one gets a balanced view.

Well it's a very wrong view/understanding in this case I'm afraid.

Sorry.

Matthewfalle

Mr Goo wrote:

The Isle of Man has approx 1000 private jets in its civil registry. Some of them unable to actually land on the island!!! Now Lewis Hamilton will be used as a high profile example of a tax dodger using an 'M' plate for his jet. HM Gov needs to close the door on this and kick it out.

The DVLC is a registry.

I don't see a billion cars parked up there.

You do know what a registry is don't you Goo?

Matthewfalle

Mr Goo wrote:

The Isle of Man has approx 1000 private jets in its civil registry. Some of them unable to actually land on the island!!! Now Lewis Hamilton will be used as a high profile example of a tax dodger using an 'M' plate for his jet. HM Gov needs to close the door on this and kick it out.

Err - Hamilton lives in Monaco.

button lives in Guernsey.

Most of the top cyclerist men live in Monaco.

I wonder why?

The indignantly of saying "now LH will be used as a high profile example yada yada" makes it sound like it'll be an outrage against a national hero (which he ain't, by the way).

TheBigBean

john80 wrote:

TheBigBean wrote:

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.

I think there key to all of this is seeing what if any purpose the transaction performs other than saving tax. If it has no logic other than this then it is questionable.

The HMRC can't see the whole transaction without someone leaking it which is why I said they should be challenging the ones they can see.

Matthewfalle

TheBigBean wrote:

john80 wrote:

TheBigBean wrote:

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.

I think there key to all of this is seeing what if any purpose the transaction performs other than saving tax. If it has no logic other than this then it is questionable.

The HMRC can't see the whole transaction without someone leaking it which is why I said they should be challenging the ones they can see.

Err - they can. They have Access to company accounts and I think off hand that trust accounts have to be produced when requested - you can see from companies house or company accounts who does what and who is receiving what, so it's not difficult to see what is happening.

TheBigBean

KingstonGraham wrote:

TheBigBean wrote:

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.

Someone appointed as a finance director of a company would not be able to claim they were compliant with IR35.

I hadn't noted the finance director part. You were several steps ahead of me. I'll stick to paying tax - it's less complicated