Is it time that The UK introduced a wealth tax on the super-rich?
This has not been a good week for me. Inexplicably, my name was omitted from the Sunday Times list of the 50 highest taxpayers in the UK.
Some readers may be astonished to learn that this is not a consequence of the wide array of fiendish tax avoidance schemes that have protected my wealth but, more prosaically, because AccountingWEB and my other income sources have failed to make me one of the country’s 145 billionaires or, if the truth be told, even a Playboy multimillionaire.
It is very commendable to see that some very rich people are paying serious amounts of tax. More surprisingly, since only 28 make the cut, a surprisingly large proportion of the 145 billionaires are paying no more tax than David and Victoria Beckham who together secured 49th place with a meagre £12.7m.
There may be an opportunity here for accountants and investment advisers if returns are really that low.
Thinking about it, if you have £1bn of wealth and receive a 3% return, which should be possible when investing such a large amount, you would make it into the list. The only proviso here is that you pay the appropriate amount of tax in the UK on your investment return.
Therefore, the only reasonable conclusion is that most billionaires (117 at least) are not paying as much tax as the man in the street might expect. There’s a surprise.
This could be a fruitful source of investigation for anyone left at HMRC, although presumably they are currently all tied up in trying to deal with the potential problems that will arise when we leave Europe, particularly if there is no deal in place, as appears increasingly likely.
The other question that seems obvious on reading this data relates to the underlying nature of taxation in this country.
If billionaires pay relatively little tax on their income then there is an obvious solution. Like so many other territories -- for example, various Cantons in Switzerland -- perhaps it is time for Britain to introduce a wealth tax for the super-rich.
This need not be charged at a punitive rate. If everybody with more than, say, £10m was obliged to contribute 0.25% per annum on their global assets could anyone really complain? You bet they could but if this is what the people want, to use a popular phrase at the moment, let them complain.
On the plus side, the Exchequer is going to benefit greatly since all of those billionaires who somehow manage to avoid paying any significant amounts of income tax would make a welcome contribution.
Taking a simple example, someone with exactly £1bn to their name would pay a mere £2.5m a year. While they wouldn’t even notice this pittance, it would be enough to employ a good few doctors or teachers.
The collective contribution from the extremely wealthy might actually be enough to make a noticeable difference to the quality-of-life of the most deprived across the country. Alternatively, it could even help the slightly less super-rich – ie accountants to pay less tax.
The other thing that we know is wealthy people like to stay out of the limelight, particularly when it comes to stories about their disproportionately low tax contributions.
Maybe rather than focusing on those that are paying something closer to their fair share than peers, it is the hidden figures who are not on this list that should get an opportunity to spend some time in the limelight? Perhaps that will be next week’s Sunday Times exclusive?