Margaret Thatcher Options

[On the edge]

Totally with you MM about David Cameron criticising Jimmy Carr about his tax avoiding scheme. I don't think MPs are best qualified to comment given their own track record in personal financial probity. At least Carr's scheme was legal!

[motormad]

Totally with you MM about David Cameron criticising Jimmy Carr about his tax avoiding scheme. I don't think MPs are best qualified to comment given their own track record in personal financial probity. At least Carr's scheme was legal!

That's exactly it! They make the laws, you must ask why there are the legal loopholes.. so they can do it, come on!!!!

[blackdog]

That's exactly it! They make the laws, you must ask why there are the legal loopholes.. so they can do it, come on!!!!

Not that easy. EU rules mean that governments cannot tax people outside their national boundaries - so they cannot tax earnings on money kept abroad. Serbia is currently planning to tax Serbians living abroad - a plan they can go ahead with because their chances of joining the EU have been knocked back for a few years.

In Carr's case I believe his cash was in Guernsey - moot point whether this is abroad. The UK government could remove the special tax status of Guernsey, Jersey, Isle of Man, etc - which would shatter the islands' economies and make little or no difference as tax avoiders would simply move their cash to another tax haven outside the governments jurisdiction. It's worth noting that the Germans are pushing for these tax havens within the EU to be closed down.

An alternative is to return to the restrictions on the flow of money to stop the money going abroad in the first case - as used to be the case. However, this would probably cost the government dearly as the City would, presumably, move to somewhere unrestricted.

Another possibility is a wealth tax (the French have this) which is an annual levy of 0.5% or so on a person's wealth. I suspect there is a lower limit, but above that everything counts - and can include investments/cash held abroad. Ironically there is a huge scandal in France at the moment because the minister responsible for combating tax evasion was found to be regularly hiding money abroad and still had €600,000 stashed away in Singapore. Of course this would also mean that many of the most wealthy would move abroad to avoid the tax.

Overseas wealth is a real problem for tax collectors.

[On the edge]

Not that easy. EU rules mean that governments cannot tax people outside their national boundaries - so they cannot tax earnings on money kept abroad. Serbia is currently planning to tax Serbians living abroad - a plan they can go ahead with because their chances of joining the EU have been knocked back for a few years.

In Carr's case I believe his cash was in Guernsey - moot point whether this is abroad. The UK government could remove the special tax status of Guernsey, Jersey, Isle of Man, etc - which would shatter the islands' economies and make little or no difference as tax avoiders would simply move their cash to another tax haven outside the governments jurisdiction. It's worth noting that the Germans are pushing for these tax havens within the EU to be closed down.

An alternative is to return to the restrictions on the flow of money to stop the money going abroad in the first case - as used to be the case. However, this would probably cost the government dearly as the City would, presumably, move to somewhere unrestricted.

Another possibility is a wealth tax (the French have this) which is an annual levy of 0.5% or so on a person's wealth. I suspect there is a lower limit, but above that everything counts - and can include investments/cash held abroad. Ironically there is a huge scandal in France at the moment because the minister responsible for combating tax evasion was found to be regularly hiding money abroad and still had €600,000 stashed away in Singapore. Of course this would also mean that many of the most wealthy would move abroad to avoid the tax.

Overseas wealth is a real problem for tax collectors.

As usual, always too hard! Message to PM; if you can't put up, shut up. Our treasury and taxation advisers are supposed to be clever that's why we pay them so much. I have to say I think its an amazing situation that the economies of our own in house tax havens rely so much on Tax avoiders; is the PM suggesting we should boycott them for holidays to teach them a lesson.

[Simon Kirby]

Not that easy. EU rules mean that governments cannot tax people outside their national boundaries - so they cannot tax earnings on money kept abroad. Serbia is currently planning to tax Serbians living abroad - a plan they can go ahead with because their chances of joining the EU have been knocked back for a few years.

In Carr's case I believe his cash was in Guernsey - moot point whether this is abroad. The UK government could remove the special tax status of Guernsey, Jersey, Isle of Man, etc - which would shatter the islands' economies and make little or no difference as tax avoiders would simply move their cash to another tax haven outside the governments jurisdiction. It's worth noting that the Germans are pushing for these tax havens within the EU to be closed down.

An alternative is to return to the restrictions on the flow of money to stop the money going abroad in the first case - as used to be the case. However, this would probably cost the government dearly as the City would, presumably, move to somewhere unrestricted.

Another possibility is a wealth tax (the French have this) which is an annual levy of 0.5% or so on a person's wealth. I suspect there is a lower limit, but above that everything counts - and can include investments/cash held abroad. Ironically there is a huge scandal in France at the moment because the minister responsible for combating tax evasion was found to be regularly hiding money abroad and still had €600,000 stashed away in Singapore. Of course this would also mean that many of the most wealthy would move abroad to avoid the tax.

Overseas wealth is a real problem for tax collectors.

You missed an option: Don't tax investments. Simples.

[blackdog]

You missed an option: Don't tax investments. Simples.

I'm suspect I missed many options. Not taxing investments is an interesting option - not so sure that those on PAYE would be so impressed that the wealthy can sit back and live off their investments without paying any tax on their income. However, it would make the UK a tax haven and could pull in huge amounts of capital to boost our economy. Somehow I suspect it would be in breach of some EU treaty obligation.

[Simon Kirby]

I'm suspect I missed many options. Not taxing investments is an interesting option - not so sure that those on PAYE would be so impressed that the wealthy can sit back and live off their investments without paying any tax on their income. However, it would make the UK a tax haven and could pull in huge amounts of capital to boost our economy. Somehow I suspect it would be in breach of some EU treaty obligation.

Those on PAYE would be doubly-miffed when they realized that the rate of income tax would have to rise to cover the loss in revenue, but the idea still has some merit.

For starters HMG is already not taxing investments in off-shore tax-havens so allowing that capital to be banked in the UK and not taxing it here is no change, though that increased investment would improve the UK banking system (to the detriment of the off-shore tax-havens - m'eh!). Like you say it would also make the UK a tax-haven which might be good for us.

If the money in the tax-havens is earned income then it will already have been taxed as income, so I don't think it's fair to tax the interest it earns because that interest is doing little more than preventing it from depreciating in real terms, and if it isn't earned income it will have been at some point so the same argument applies.

And if we just abandon capital gains tax then that's a whole bunch of HMRC clerks we don't need to employ who formerly would have been collecting, investigating, and chasing after CGT in an attempt to fill the loop-holes created by an equally large army of administrators who we can also dispense with.

Income tax would have to go up, but if you increase the top rate a notch or two then the PAYE proles won't notice any change and only the top-earners will see a significant difference and they're the ones saving on their CGT anyroad.

Bonnet de douche, as they say in Jersey.

[Ruwan Uduwerage-...]

Along with many others I am currently watching the funeral of Baroness Thatcher. I have to say that as a nation we do 'pomp and ceremony' rather well.

Whether one liked or disliked the former Premiers politics, she was certainly a unique and imposing character in modern British history, and it is in my opinion fitting that Baroness Thatcher is being afforded such a send off, although the realities of Thatcherism should and will be debated long into the future.

[Dodgys smarter b...]

Bonnet de douche, as they say in Jersey.

Mange tout as they say in Peckham.

[motormad]

What the eff? as they say in Newbury.

[Simon Kirby]

Mange tout as they say in Peckham.

[Squelchy]

How some others see it..

[Simon Kirby]

How some others see it..

Very good.