'Panama Papers' storm hits home

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The largest data leak in history has lifted the lid on the shady offshore tax dealings by numerous powerful individuals. So, what happens now?

Panama City-based law firm Mossack Fonseca is the fourth largest provider of offshore tax services in the world. A year ago, a whistleblower contacted the German newspaper Süddeutsche Zeitung and unleashed a flood of confidential documents. Over the weekend, the paper released all 2.6TB [Terabytes] of information, dating all the way back to the 1970s.

Mossack Fonseca has already returned fire, stating: “We are not involved in managing our clients’ companies. Excluding the professional fees we earn, we do not take possession or custody of clients’ money, or have anything to do with any of the direct financial aspects related to operating their businesses.”

The Panamanian firm may have pleaded its innocence, but the people named in the so-called “Panama papers” will have a lot more explaining to do. The data extends into the close orbit of influential politicians including Vladimir Putin, the prime minister of Iceland and David Cameron, who’s deceased father Ian Cameron was one of the firm’s clients. All-in-all, 72 heads of state are implicated the leak’s 11m documents.

The Süddeutsche Zeitung wrote: “Among others, Mossack Fonseca’s clients include criminals and members of various Mafia groups. The documents also expose bribery scandals and corrupt heads of state and government.

“The alleged offshore companies of 12 current and former heads of state make up one of the most spectacular parts of the leak, as do the links to other leaders, and to their families, closest advisors, and friends. The Panamanian law firm also counts almost 200 other politicians from around the globe among its clients, including a number of ministers.”

HMRC headache

The leaks present a massive headache for HMRC and tax advisers, with more than 1,800 British intermediaries named. From a sheer logistical point of the view, the overworked tax department will have to dig through the millions of pages. HMRC confirmed it has “already received a great deal of information on offshore companies, including in Panama, from a wide range of sources, which is currently the subject of intensive investigation”.

Rebecca Busfield, senior partner at Watt Busfield tax investigations, told AccountingWEB that HMRC will need to check “the quality of the data” and warned there may be issues resourcing the necessary investigations.

“Given the PAC’s and general public’s criticism of HMRC’s handling of the HSBC Swiss client leak, and the creation of the Liechtenstein Disclosure Facility (LDF), HMRC will be keen to be seen to be taking a tougher stance,” said Busfield.

“HMRC would probably like to get some high profile criminal prosecutions. Also George Osborne may try and get some favourable publicity given recent attacks in the press that he favours his wealthy supporters.”

According to Busfield, a new offshore disclosure facility will start in 2016. It will carry a larger penalty than the LDF and will not include immunity from prosecution and a larger penalty than the LDF.

“There is also a proposal to introduce a statutory requirement for taxpayers to come forward and correct their overseas tax affairs between April 2017 and September 2018, after which there will be very tough action by HMRC,” said Busfield.

“It is unlikely they will set up a Panamanian amnesty given the criticism of the UK/Swiss deal and Liechtenstein Disclosure Facility, although that may be helpful to get better quality information from the Panamanian intermediaries.”

Red alert for advisers

According to Dawn Register, a partner in tax dispute resolution at BDO, the pressure will intensify on advisers as HMRC is forced to clamp down. “The powers and increase in penalties for offshore evasion are already in the Budget. It will be introduced in the coming years. All the disclosure programmes have ended. There are no more amnesty programmes. We’re entering an era of very tough treatment by the Revenue. The pressure on advisers is huge.

“If you’re giving advice to someone who has complicated international tax affairs, you need to know what you’re talking about. The rules are so complicated. If they’re non-domiciles, if they’ve got offshore trusts, offshore companies - you need to be an expert in that area. To dabble, especially now, is now very, very dangerous,” said Register.

“If you know someone’s got a problem, you need to act very swiftly and make sure you’re either helping them to rectify their position or putting them in touch with someone who can.”

HMRC has been granted new powers to tackle evasion, including rules for accountants and advisers deemed to be “offshore enablers”. Under new powers, advisers who have even known about offshore evasion will have committed an offence.

Busfield agrees with Register’s diagnosis: “Any UK taxpayers who are associated with a Panamanian bank account should double check whether they have UK tax liabilities, and if necessary make a disclosure to HMRC. Depending on the size of the potential tax evasion, taxpayers should consider using the Contractual Disclosure Facility to try and get immunity from prosecution.”

Despite the size of this leak, Register wasn’t surprised by its occurrence.  “No, this is the way of the world now. Electronic data, hacking - it’s more of the same. The world is a smaller place and there’s less secrecy. There’s a huge political agenda to push for transparency. Tackling tax dodgers is a very popular political agenda.”

Why Panama?

The answer is that Panama, alongside Bahrain, Nauru and Vanuatu, has vigorously resisted the OECD’s common reporting standards. As the veil of secrecy around traditional strongholds like Switzerland has lifted in recent years, Panama offered a discreet option.

Jolyon Maugham QC explained on his blog Waiting for tax, “What Panama has offered – its USPs in the competitive world of tax havenry – is an especially strict form of secrecy, a type of opacity of ownership, and (if the reports of backdating are correct) a class of wealth management profession some of whom have especially compromised ethics.

“You go to Panama, in short, because, despite its profound disadvantages, you value these things.”

Speaking to AccountingWEB, Maugham expanded on Panama’s appeal: “The Panamanian tax authority isn’t terribly interested in delivering transparency to other revenue authorities. You’ve got dodgy bearer shares that are unusual and possibly particular to Panama, you’ve got a tax and wealth management industry that, in some cases, seems a little light on ethical standards - those are all powerful attractors if you’re engaging in evasion.”

Maugham welcomed the leak, saying: “It’s all very well for those in the know to say ‘Oh this is happening,’ but the reality is that until people see up and close, they are inclined to believe that those who say this is happening are exaggerating.

“The way you get reluctant governments to reform is by raising the political cost of inaction. If they feel the public is angry, they’ll react. You’d rather want a world where government did things merely because it’s the right thing to do, but if we can’t have that world, I’ll settle for one where government acts because it appreciates there is a very serious political cost to its inaction.”

A 30-minute Panorama documentary summarising some of Mossack Foneseca's actvities on behalf of UK clients, including the Prime Minister's father, can be viewed on the BBC iPlayer.

About Francois Badenhorst

Francois

Francois is a writer, editor and broadcaster specialising in business.

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By TMR
06th Apr 2016 12:00

The problem isn't necessarily the tax rate

Paying a massive tax bill brings with it the obvious thought of where the hell is all the money going. The overseas aid programme is fraught with questionable donations, the billions poured in to the benefit system for people who simply refuse to work, the whole Brussels budget to support over paid bureaucrats and French farmers who pour good Spanish wine down the drain to name but a few.......

This is not a tax rate problem but a moral dilemma facing everyone as to what our so called leaders believe is right to spend and what not. Just because you're stinking rich doesn't mean you don't have a wish to be morally supportive of others less fortunate, indeed I'm sure many high end earners pay hefty amounts to charity. I agree some of those mentioned on the list of clients may not fall in to this category but many tax avoiders do so to channel funds to where they think is more morally acceptable. Regrettably our leaders simply squabble and fail to recognise the true good they could do wit our hard earned dosh.

 

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11th Apr 2016 15:21

At last some sense (from TMR) who observes WASTE...

..in the Public Sector.  Mother Nature evolved the amoeba.  A single cell animal, that when it reaches a certain, maximum size, it splits, and each part re-evolves.  So it should be with ANY organisation, be it business, or public...Instead we are fed on greed, and empire building in an out-of-kilter pyramid.  Witness the European Union, the BRITISH Broadcasting Corporation, and the National Health Service.  (I use full words as initial letters could be misinterpreted, and are not good English.  They also slow up one's reading as the eye has to re-interpret what the letters are supposed to mean).  Tax is  meant to bring in money to support our services in running a community.  How it is spent SHOULD be more open to analysis by everyone, and here, the media might NOT be doing its job.  In the "old days" it was "first check your facts". Now it is "publish and be damned".  Lawyers abound, (sadly as parasites).  Some lawyers seek a seat in Parliament, so that they can "pass legislation" that might not be as enforceable to the "man on the Clapham omnibus" would want to believe.  Therefore as the tax tail grows ever larger, it wags the dog (rather than the other way round).  Readers of this column are "interested" in tax, and it is submitted that the structure of the tax system - and its roots (wars with the French for Income Tax) - are remembered and applied.  If the tax code becomes over-bearing, that's where we can help, although I would not want to restart my career (which I embarked upon back in 1963), and am still practising. I've got the Tee-Shirt.  I remember studying the Duke of Westminster case (no man has a duty to arrange his tax affairs, etc....shovel....et al).  Too much media space over the week-end was concerned with exposing privacy, and missing the point between Capital receipts (inheritance) and Income.  Those outside our circle thought that recipients should pay tax on capital receipts in their income tax returns.  

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By vstrad
06th Apr 2016 11:50

Oh the naivety

ShirleyM wrote:

why always me wrote:

If I earned £100million, is it really fair that a government would want £40 - £50 million of this?

If everyone paid the tax that was legally due we could ALL pay less tax, instead of the elite few who can afford Panamanian lawyers

PS. ..... and PLEASE don't try to tell me that there are no wealthy people involved in aggressive tax avoidance/evasion, or hiding the proceeds of criminal activity.

Shirley, do you really believe that, if everyone paid in full, the Government - any Government - would actually reduce tax rates rather than just spend the additional revenue? How I admire your optimism.

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By jantill
06th Apr 2016 12:18

we could ALL pay less tax

I think that it is naive to believe that if the Government received all tax legally due then we could ALL pay less tax.

I believe that Governments have an insatiable appetite for expenditure.

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07th Apr 2016 11:46

Could we?

ShirleyM wrote:

 

If everyone paid the tax that was legally due we could ALL pay less tax, instead of the elite few who can afford Panamanian lawyers

 

 

I doubt it. 

First I doubt that as a % the amount of tax evaded is significant compared to the amount collected.

Second it's a naïve fantasy to think that if only a few laws were changed the billions more tax would roll in.  Say we did 'invade' Jersey as some idiots are suggesting.  Do we think MNCs and Trusts would stay there and pay more tax or would they simply move elsewhere? Then what?  Invade Panama?  Invade Estonia?  Why should anyone look to locate in a country that charges high taxes? Why not find a country that seems to do OK without taxing the bejeezus out of its residents? If Jersey is terrible because it has lower taxes than the UK, is the UK terrible because it has lower taxes than the USA? What's the 'moral' right level of taxation?

Thirdly, governments seem content to spend and spend everything they collect and then some more.  If they had more tax they wouldn't cut tax rates, they would just find another pet project to spend the extra money on.

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07th Apr 2016 13:22

Redistribution
It is fair because you never really earnt it (your employees did), it's redistributing wealth. Society enables your wealth gain. Give back to it or you can be excluded.

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06th Apr 2016 10:40

I don't think any of my clients are up to no good

But maybe I'm wrong...

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06th Apr 2016 11:01

Yes But

Yes but will anything become of this headline

HMRC do not have a very good track record on anything. Least of all dealing with evaders.

Is it time to accept that everyone (99.9%) is dishonest when it comes to tax.

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06th Apr 2016 11:35

more

HMRC does not have the resources to deal with this. The department has been subjected to corporate anorexia on the assumption that everything we need to do can be done by computers, and it has no effective wing to deal with large scale evasion, let alone avoidance. Until it is given resources then politicians claining that they will do anything about this is mre wind.

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06th Apr 2016 11:42

What rate?
Rules can and will always be circumvented in Systems that depend on self declaration of tax due.

The answer is to eliminate cash and coin and establish global electronic banking arrangements such that everyone has a income and capital bank account. Flows into the income bank account are taxed automatically. Rules governing what flows to and from the capital account (which is not taxed), are the only rules.

This would kill the massive cash in hand economy, and otherwise end all the needless complexity and kill off tax accounting.

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06th Apr 2016 11:49

Secrecy

Hitler would have been thrilled if he could have accessed information in the 1930's from secretive Swiss banks.

It is not only individuals who are evil or  corrupt, but governments can be as well.- particularly in relation to oppressed minorities.

Be careful of what you wish for.

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06th Apr 2016 11:50

Good book

I recommend the book "Treasure Islands" to everyone interested in this subject.

 

http://treasureislands.org/

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06th Apr 2016 11:58

Who guards the guards

The government must fund a taskforce to investigate each person alleged to have been involved in illegal activity.  If there is as much tax money at stake as we are led to believe (plus penalties and interest) they could wipe out a big chunk of our national debt in a short time. That would be a shrewd investment; and might also help stave off social unrest amongst the classes that can't afford such activity.  Here is the government's chance to knock on the head any idea that we are not really all in it together.

There's only one problem. Who guards the guards?

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By ShayaG
06th Apr 2016 18:31

The tribunals guard the guards

Although there is nobody to prevent collusive sweetheart deals.There is a huge problem of revolving doors between HMRC and Big 4 tax teams.

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By ShayaG
06th Apr 2016 12:07

Not naivety

The babyboomers and their excesses are coming to roost.

The standards of the past were (to anyone given over to a minute's introspection) obviously abusive. Too many people have built careers on this twilight zone of shell companies, nominee directors, and studied disinterest in the substance of the transaction. Everyone else was doing it is no defence from the approbrium of my generation, who never were involved in these deallings, and  who look on these shenaigans with disgust.

I feel for the compliance team, who appear to have fought tenaciously and with dignity to save the MF partners from themselves.

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By IANTO
06th Apr 2016 12:09

HMRC's attention

Perhaps now HMRC's attention will turn away from the minnows and towards the pikes, which now seem more abundant and perhaps easier to catch?

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06th Apr 2016 12:10

Tax avoidance - why not?

Much emotional comment.

Tax avoidance done by people who are not criminals is legal and a normal rational activity by all those able to do this. See minimum salary/maximum dividends, ISA's, company pensions etc.

People see it as immoral because they do not have a few millions to tax plan with.

So Cameron's father is perfectly rational when he did his tax planning.

As to the many politicians who suddenly get great wealth after becoming President, well make up your own mind how a bureaucrat on a salary suddenly becomes a billionaire (Putin, Zuma et al).

Me if I ever win the Lotto/Euro millions will be consulting tax experts the moment the money lands in my (on-shore) bank. And pretty sure all on this forum would.

As for dodgy politicians, criminals and tax evaders yes I hope they will get their come uppance.

To those confused, I have underlined the difference in the two words frequently and incorrectly combined.

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07th Apr 2016 11:43

Personally...

richardterhorst wrote:

Me if I ever win the Lotto/Euro millions will be consulting tax experts the moment the money lands in my (on-shore) bank.

Personally, I would be off to Andora, leaving the funds management in Switzerland!

 

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07th Apr 2016 11:59

Simples

Michael C Feltham wrote:

richardterhorst wrote:

Me if I ever win the Lotto/Euro millions will be consulting tax experts the moment the money lands in my (on-shore) bank.

Personally, I would be off to Andora, leaving the funds management in Switzerland!

 

Yep its simple

find a country with no tax, warm weather & naked women.

move there

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06th Apr 2016 12:22

The trouble with all the coverage so far is the journalists want to make as much headlines as possible, and the inconvenient facts get buried along the way.

Guilt by association is how they are currently attacking Cameron, who, as far as we know so far, doesn't seem to be involved at all.

On the other hand, Labour are jumping up and down as nothing has so far come to light regarding any of them (but no doubt will in due course, so make hay while the sun shines), so they will try and twist things to suit their agenda.

Labour seem to be trying to bury the fact it was going on under their watch too.  As did massive overspending, and the financial crisis, and lax banking rules.

Let's all take a step back and see what actual evidence emerges.  No doubt there will be some juicy bits from certain countries' leaders where there is a history of 'bad book keeping', but not every offshore company is set up to avoid all taxes, and not every company belongs to a criminal.

Having said all that, let's hope the various tax authorities can get together and make sure if there is tax to be collected then that happens.  Let's start with asking Ireland to change it's rules....because competing for tax revenues and allowing multinationals to 'base' themselves in favourable environments has always been an issue.

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By ShayaG
06th Apr 2016 12:26

Evasion and avoidance

Aren't as distinct as you'd like to think. The link is secrecy.

Secrecy is important as if the full facts were disclosed the tax treatment would not be favourable.

Do you think the dozens of London hedge funds using BVI entities want HMRC to know that the only link your typical London managed hedge fund has with its BVI trading entity is the 2 hour AGM in a hotel followed by fishing and some golf every summer? Secrecy helps ensure that nobody really knows that the nominee BVI resident directors are a sham.

More damningly, does HMRC want to know? There is an element of plausible deniability everywhere.

If secrecy wasn't important then the money would be in lower cost jurisdictions - Jersey or the Isle of Man.

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06th Apr 2016 12:50

Musical pedantry

The correct name for the instrument discussed above is a violoncello; however this is often shortened to the word 'cello with the apostrophe indicating the abridged version. So by using the shortened form are people covering up the fact that there is indeed a fiddle involved?! Should I be filing a SAR?

Please note this is not a criticism of anyone's post here. I am happy with all versions of the spelling of this wonderful instrument.

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06th Apr 2016 14:41

To benefit or not

Say my father dies and I inherit from him or goes to mother and then from her.

When I inherit do I or do I not benefit from fathers offshore tax arrangements?

Of course, I do.

I have heard it said from a very senior guy at a big 4 practice that the only reason there was ODF, NDO, LDF etc is that there were so many politicians, judges, senior civil servants with offshore accounts on the list obtained by HMRC.

 

 

 

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06th Apr 2016 14:58

It's not just Panama

I know someone whose tax affairs are in order having made full disclosure to HMRC. Before he came to live in the UK he had investments in Switzerland to avoid another country's tax. When the Swiss signed an exchange of information agreement with the UK, his Swiss investment managers automatically transferred the portfolio to a Liechtenstein Foundation. When Liechtenstein agreed to give information to the UK, the Swiss investment manager automatically transferred the portfolio to a Panama Foundation. Why doesn't he transfer his portfolio to the UK? Because his investment managers will not do it without charging an exorbitant fee.  Countries which base their tax law on legal and not beneficial ownership seem to consider this standard practice. Foreign nationals often do not understand our concept of beneficial ownership.

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06th Apr 2016 16:52

UKTI on the ethics of UK professional enablers...

Worth readings UK's TI blog on this: http://www.transparency.org.uk/the-panama-papers-what-they-tell-us-why-they-matter-and-what-can-be-done/ on the four things that stand out:

I especially like the comment at the end "Finally, a recommendation to any individual who feels that their wealth is both legitimate and private: keep it in a bank account in the UK.  If you have nothing to hide, this will give you privacy without the need to set up complex structures in offshore jurisdictions."

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07th Apr 2016 12:06

Distinguish:

Between justfiable outrage;

And green jealousy.

The UK Government urgently needs to apply the ethos behind Laffer's Curve, to taxation, holistically.

If taxes were not so high, then the armies of tax barristers and accountants would urgently need to find other gainful work.

With holistics taxes so punitive, how can a true entrepreneur make progress? What real incentives are there to base a business in the UK if it could be run from a more tax-friendly jurisdiction?

Answer: none.

Why do people think a raft of businesses moved part or all of their bases offshore? Shell Tankers, for example; there are many others.

Answer: to avoid increasing and crippling compliance and taxation.

Worth perhaps remembering Judge Learned Hands' profound obiter dictum:

"Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

Commissioner v. Newman, 159 F2d 848 (1947)."

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07th Apr 2016 12:24

yes yes

Michael C Feltham wrote:

Between justfiable outrage;

And green jealousy.

The UK Government urgently needs to apply the ethos behind Laffer's Curve, to taxation, holistically.

If taxes were not so high, then the armies of tax barristers and accountants would urgently need to find other gainful work.

With holistics taxes so punitive, how can a true entrepreneur make progress? What real incentives are there to base a business in the UK if it could be run from a more tax-friendly jurisdiction?

Answer: none.

Why do people think a raft of businesses moved part or all of their bases offshore? Shell Tankers, for example; there are many others.

Answer: to avoid increasing and crippling compliance and taxation.

Worth perhaps remembering Judge Learned Hands' profound obiter dictum:

"Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

Commissioner v. Newman, 159 F2d 848 (1947)."

lower taxes = more business = more employment = bigger tax take

there has to be a policy motive why we are driving UK PLC into the ground.

If it's legit then it's fine, I have issues with HMRC if they have not enforced the rules and /or people have lied about residence status etc

avoidance then becomes evasion

If they have then why don't HMRC investigate and go back 20 years. surely they can just ask "please send proof that the company / trust was non resident for tax purposes we would like to see ----------------etc etc" otherwise we will raise a determination.

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07th Apr 2016 15:56

No tax...

....will ALWAYS be more "efficient" than even low tax.

The Black Knight wrote:

Michael C Feltham wrote:

Between justfiable outrage;

And green jealousy.

The UK Government urgently needs to apply the ethos behind Laffer's Curve, to taxation, holistically.

If taxes were not so high, then the armies of tax barristers and accountants would urgently need to find other gainful work.

With holistics taxes so punitive, how can a true entrepreneur make progress? What real incentives are there to base a business in the UK if it could be run from a more tax-friendly jurisdiction?

Answer: none.

Why do people think a raft of businesses moved part or all of their bases offshore? Shell Tankers, for example; there are many others.

Answer: to avoid increasing and crippling compliance and taxation.

Worth perhaps remembering Judge Learned Hands' profound obiter dictum:

"Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

Commissioner v. Newman, 159 F2d 848 (1947)."

lower taxes = more business = more employment = bigger tax take

there has to be a policy motive why we are driving UK PLC into the ground.

If it's legit then it's fine, I have issues with HMRC if they have not enforced the rules and /or people have lied about residence status etc

avoidance then becomes evasion

If they have then why don't HMRC investigate and go back 20 years. surely they can just ask "please send proof that the company / trust was non resident for tax purposes we would like to see ----------------etc etc" otherwise we will raise a determination.

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By TMR
07th Apr 2016 12:30

Distinguish

"Taxes are enforced exactions, not voluntary contributions"  Commissioner v. Newman (1947).

The irony of this is tax payers know this full well, but HMRC choose to think otherwise. After all when we get a letter from HMRC addressed 'Dear Customer' doesn't it make your blood boil. And whatever happened to the 'customer is always right' ideaology !!!

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07th Apr 2016 12:40

Sweden is supposed to be a good place to live and work

They have higher taxes, and evasion/avoidance is very low. Then look at Greece where tax is lower than Sweden but evasion is very high and it has affected the country badly. Having a relatively low tax rate didn't help Greece.

It isn't so much the tax % that affects the country, it's the attitude of the people. Greed isn't good and the less the avoidance and evasion, the more the burden is shared, so it doesn't hammer those who cannot avoid tax for the benefit of the few who can.

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07th Apr 2016 13:38

Utopian Dream...

ShirleyM wrote:

They have higher taxes, and evasion/avoidance is very low. Then look at Greece where tax is lower than Sweden but evasion is very high and it has affected the country badly. Having a relatively low tax rate didn't help Greece.

It isn't so much the tax % that affects the country, it's the attitude of the people. Greed isn't good and the less the avoidance and evasion, the more the burden is shared, so it doesn't hammer those who cannot avoid tax for the benefit of the few who can.

Sweden is an uber-Liberal-Left society; which is presently crippling itself thru refugees...

Many years back Sweden extracted such high levels of tax, they were forced to hand back benefits to enable people to actually live!

The CEOs of major companies were intended to live in precisely the same streets as their workforce: nice utopian and egalitarian cloud cuckoo land perspective. Why bother to work hard, study, work weekends, take few holidays etc?

Of course, this extract-payback socialist idiocy meant creating a multi-level bureacracy which cost bundles. We have it in Britain: housing benefit. working tax credits, child tax credits, keep on going. Plus, naturally all the add -on costs: bureaucrat's pensions and benefits.

The Swedish state was on the edge of fiscal collapse: Britain is not too far away.

Quote:
the more the burden is shared
.

Oh that it was and in reality could be, Shirley!

Realistically, there are two types of people in this World: doers and dossers.

QED

 

 

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07th Apr 2016 13:15

Investigators

Will Cameron and Osborne appoint enough extra funds for HM Tax collector to conduct his enquiries comprehensively????

Will the Editor of this distinguished site conduct a poll of subscribers?!!

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07th Apr 2016 13:28

Some posters here are saying ....

... that the Panamanian lawyers didn't break the law. The lawyers themselves claim the same thing.

Isn't Money laundering, ie. the handling of funds from criminal activity, breaking the law. Or maybe it wasn't actually illegal at that time. I am thinking of the handling of funds from the Brink's Mat robbery, which the lawyers knew to be the proceeds of crime.

If caught in one lie, it is natural to suspect them of other lies.

 

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By ShayaG
07th Apr 2016 15:21

The thin veneer of respectability

Is precisely what MF sold.

Outright criminals (South American drug traffickers, convicted corrupt public officials, gold bullion robbers, and sanction breakers) rubbed shoulders effortlessly with a greyer class of criminals on the moral spectrum - men hiding their fortunes from their wives and those seeking to use smokescreens, mirrors and secrecy to illegally evade tax. There was the curious case of the musician apparently worth $2bn. And of course there were the legal tax avoiders.

What is striking is that they were all aided by the same class of professionals - the bankers, lawyers and accountants - who were all shocked, shocked and dismayed, that their clients with the obsessive demands for obscurity turned out to have something to hide. All these respectable law abiding men were astounded that their exclusive lipstick sometimes wore a pig.

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07th Apr 2016 16:24

heres an interesting take that i profoundly agree with

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07th Apr 2016 16:25

and another even more germane

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By ShayaG
07th Apr 2016 17:23

Lower taxes != higher tax takings

From https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...

YearTax rateTax takings (£m)2014/1520 - 2143,0052013/1420 - 2340,3272012/1320 - 2440,4822011/1220 - 2643,130

 

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08th Apr 2016 09:05

We have all been waiting for this one

Every one says, Tax avoidance schemes are created by clever lawyers and accountants and they find loop holes in tax regulations, no they dont, aggressive tax avoidance schemes require 3 things to succeed, Secrecy, secrecy and more secrecy.  Its very similar to a gardener receiving cash in hand not declaring it, its just on a larger scale.

 

We either all use tax havens or none of us do, and there cannot never be anything in between.

Margaret Hodge advised 'PWC provided tax on an industrial scale', which made me think should i start to offer them, it seems quite easy, the one difficult part i can see is getting around money Laundering rules. however from what i have heard global Banks, ask very few questions. No i have changed my mind not even i am low enough, corrupt enough, slimy enough, greedy enough, shitty[***] enough to create and sell such schemes. 

It always makes me think when towns and citys suddenly out of the blue turn into boom towns, whats behind it all....I always had an idea, now i know....they dont ask any questions and turn no one away. 

 

Just thought of a joke, whats the difference in setting up a Company in the UK and Panama.....In the UK you tell Companies House the Company name, Directors, shareholders, and registered address and they provide the Company number.   In Panama you tell them the Company name and they tell you who are the Directors, shareholders, registered office and anything else you need, yes okay its not that funny but it is 8.59am.

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08th Apr 2016 09:21

That is funny

AndrewV12 wrote:

Just thought of a joke, whats the difference in setting up a Company in the UK and Panama.....In the UK you tell Companies House the Company name, Directors, shareholders, and registered address and they provide the Company number.   In Panama you tell them the Company name and they tell you who are the Directors, shareholders, registered office and anything else you need, yes okay its not that funny but it is 8.59am.

:)

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08th Apr 2016 10:11

Hmm...

AndrewV12 wrote:

Its very similar to a gardener receiving cash in hand not declaring it, its just on a larger scale.

Which is, of course, Evasion not Avoidance: plus, potentially, if and where the gardener doesn't declare his income, conspiracy to defraud under the auspice of the Proceeds of Crime Act.

Quote:
We either all use tax havens or none of us do, and there cannot never be anything in between.
We all actually receive benefit from a number of financial services: most major insurers take re-insurance via "Captives" in such as the Caymans.

Indeed, when PI became almost impossible to underwrite for the top ten auditors they set-up a mutual "Captive" insurer in the Caymans! Anyone remember this?

Quote:
Margaret Hodge advised 'PWC provided tax on an industrial scale

Ah, the sainted Margaret! Whose fortune came from her tax avoiding father and his steel trading business.

http://www.ibtimes.co.uk/anti-tax-avoidance-campaigner-margaret-hodge-gi...

Don't do as my late father and brother and I do: do as I say!

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08th Apr 2016 11:07

Joke

Michael C Feltham wrote:

AndrewV12 wrote:

Its very similar to a gardener receiving cash in hand not declaring it, its just on a larger scale.

Which is, of course, Evasion not Avoidance: plus, potentially, if and where the gardener doesn't declare his income, conspiracy to defraud under the auspice of the Proceeds of Crime Act.

Quote:
We either all use tax havens or none of us do, and there cannot never be anything in between.
We all actually receive benefit from a number of financial services: most major insurers take re-insurance via "Captives" in such as the Caymans.

Indeed, when PI became almost impossible to underwrite for the top ten auditors they set-up a mutual "Captive" insurer in the Caymans! Anyone remember this?

Quote:
Margaret Hodge advised 'PWC provided tax on an industrial scale

Ah, the sainted Margaret! Whose fortune came from her tax avoiding father and his steel trading business.

http://www.ibtimes.co.uk/anti-tax-avoidance-campaigner-margaret-hodge-gi...

Don't do as my late father and brother and I do: do as I say!

 

Hi Michael

I think it just goes to show you, such schemes are so secretive there are not many out there who have a clue how such schemes are run, People who use them dont need to now how there run, its all run by others on their behalf.   

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08th Apr 2016 10:33

Residents Management Companies

Light touch regulation, incomprehensible Leases, high legal costs, Lack of understanding by District Judges, complex Leasehold, Land Law  and Company Law in relation to RMC/Landlords with freehold shared between the Lessees via the RMC...... and who is keeping track of what service charge is claimed to be spent on and how it is actually  spent or used

 

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08th Apr 2016 14:18

Oh Dear, Dave!

Dave dropped himself yet further into the mire, earlier: I heard a snippet on BBC Radio 4 lunchtime news, where Dave claimed Blairmore was not a method of avoiding tax; no Sirree!

His late father, Ian, set up Blairmore to allow people to invest in US Dollar denominated securities, which they would not be able to do, otherwise, due to the Exchange Control Act.

Fascinating: since Thatcher's government repealed the 1948 act in 1979...

In any case, if the Exchange Control Act had have been in force, then Ian Cameron would have been guilty of a serious criminal offence: conspiracy to export stirling, without paying what was called the Dollar Premium and with the Bank of England's prior permission.

Are MSM journalists really this stupid?

Clearly yes.

"Valued today at £25m, the Panamanian fund was established in 1982 while David was still at Eton, the school that his father attended. At the time, Ian Cameron still worked at Panmure Gordon, the City broking firm at which three generations of the family were senior partners."

Source: http://www.theguardian.com/politics/2012/apr/20/david-cameron-jersey-pan...

The secret of a great fortune made without apparent cause is soon forgotten, if the crime is committed in a respectable way.

Le secret des grandes fortunes sans cause apparente est un crime oublié, parce qu’il a été proprement fait.

Honoré de Balzac

 

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09th Apr 2016 18:55

Dave is honest
Who cares what Daves dad did unless it was illegal. Dave has said unequivocally his income is limited to his salary, savings interest and a property let. He had an investment in the fund that is open to anyone (offshore funds are available in my Sipp) which he bought for £12k and sold for £29k, whoopee doo? This reminds me of the stupid misunderstanding of people that think we didn't land on the moon because the flag wobbles. As far as Camerons involvement it's a total non story. Even the church or England had investments in wonga, anyone criticising dave best make sure there is no offshore funds direct or indirect in their pension.

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11th Apr 2016 16:28

am i surprised the Black Knight
Is sexist, no of course not :-)

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11th Apr 2016 16:38

a very aggressive case of conflating Martin

and you can be such a pedant about language , grammar , syntax etc. Personally I think that UK should be proud of the NHS & BBC. And yes I  profoundly disagree with you re acronyms!.

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By TMR
11th Apr 2016 19:30

Avoidance, Aggressive Avoidance and Evasion

ITN news tonight embarked on this very subject. It is suggested Avoidance  is OK it's acceptable by the majority,  but 'Aggressive Avoidance' isn't. Albeit there is no definition of what is and what is not Aggressive

So lets put that in context : A 70 m.p.h speed  limit on our motorways. 71 m.p.h. well its illegal but it's acceptable, get to 80 m.p.h and you're likely to be breaking the law but we'll turn a blind eye, 90 m.p.h and you certainly are breaking the law.

Now then - 69 m.p.h well that's aggressive non breaking of the law, so you should be guilty and pay a penalty. Are we really saying although the law is 70 m.p.h. you really should only drive at 50 m.p.h. ?

What BS and it's once again idiots in Government who are to blame. 

Why can't we get a definition of what is and what is not illegal - then we'd all be able to judge and act accordingly !!

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11th Apr 2016 20:53

Had Enough?

TMR wrote:

Why can't we get a definition of what is and what is not illegal - then we'd all be able to judge and act accordingly !!

Well we already know the difference between what is legal and what is not: legal is what is enshrined in law, be it common, equity or statutory.

The old working rule on law, is to stick to the letter of the law: not the spirit.

Core problem is, as I have pointed out ad naseum on this any other blogs and fora, Government, due to their own shambling incompetence, profligacy (with our hard won money) and utter inability to comprehend the real World, have been trying, desperately, to re-focus Joe Average's short-term attention span upon supposed tax criminals, reflected somehow, as immoral. To take Joe's jaundiced eye, away from the huge cost of surviving in this misbegotten disaster of a nation state: mainly thanks to obscene levels of holistic taxation.

In other words, it is not Government's fault for throwing precious public purse around like a mentally compromised octopus on speed (Kid's Company: PFI schools which sort of collapse; foreign aid; QUANGOs; NGOs, et al) it is dastardly tax cheats that are the root of the problem.

Now, who actually compiled said tax codes and voted them into law? Joe Average? George Soros? Robert Mugabe? Uncle Tom Cobley? Attilla the Hun?

Err, no: it was serial governments.

Who, in desperation, welcomed Inwards Investment as the saviour of Britain and trumpeted to the rooftops about their "achievements"? Throwing bundles, again, of our money, in concessions, grants, inducements, rates holidays etc. Then horror! These inwards investors want to charge their UK subsiduary, licence fees, IPR costs, import commodities and parts; etc. How unsporting of them...

And now: we the humble bean counters and arcane unpaid servants of government have yet more burdens to add to our workload:

http://www.breitbart.com/london/2016/04/11/uk-criminalise-firms-abet-tax...

As well as AML; CPD and all the other compliance issues and the latest genius-level knee-jerk, clients delegating us to complete annual PSC registers.

 

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11th Apr 2016 20:32

Aggressive v non aggressive

I would say that ISA's, Pension contributions and the like are 'acceptable' avoidance, as they are being used as intended, and there are always caps on the relief available, ie. limits to the tax advantage gained.

I would say that aggressive avoidance is that which is artificial, uses 'loopholes' which were unintended, and can provide unlimited tax avoidance or reliefs.

Just my personal take on the subject.

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12th Apr 2016 09:49

OH COME ON SERIOUSLY

Everyone on this site should be quite clear on the difference between evasion and avoidance and just applying the correct tax treatment. Appears not.

Joe public are mislead by the media and it may be that Mr Cameron has in fact done nothing wrong added to which his tax returns won't prove one way or the other will they?

Your tax affairs are meant to be confidential and Corbyn and Cameron seem not to want to defend this principle.

I would be suspicious of this behaviour as it's as blatent as sonic the hedgehog showing her cheque for tax that wasn't due.

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