Those HSBC accounts in Jersey

Mr Blunt, a public school educated former Army officer, deposited more than £2 million in the offshore tax haven and registered the account at his parents’ British address.

The singer has previously denied that he is a tax exile after buying a property in Switzerland and states on official company records that his nationality is British.

His management company declined to comment on Blunt’s tax and financial affairs and it is not known if the Jersey account has been declared to British tax authorities.

There is no suggestion he has done anything illegal.

Well quite.

Let\’s see if we can construct a scenario in which an international pop star can have £2 million in an account in Jersey without owing the British taxman a single penny: even if no UK tax has been paid on that sum.

So, international pop star is international. Goes off and plays gigs around the world to promote his records, to earn money doing live gigs. I know, I know, this is James Blunt, the idea that anyone would pay to see him is odd, but there we are, no accounting for taste.

Leave aside whatever he might get paid in the UK from UK sales. Think only of his foreign income, from those deluded foreigners who like his music.

Now if our international pop star is indeed international, working outside the UK for more than 270 days a year (which, when you include his rest and recreation breaks in Ibiza and Verbier, is entirely possible, if not likely) then he\’s most unlikely to be resident in the UK for tax. It wouldn\’t even need to be a conscious decision to stay away for long enough not to be resident: could just be one of those things, that\’s how the touring schedule works out.

UK sourced income would be different. But those foreign earnings, so long as they stay foreign, wouldn\’t be subject to UK tax. There just isn\’t any owed at all: this isn\’t even tax avoidance, this is just straight, simple, tax compliance.

And that\’s how an international pop star can have £2 million in a Jersey account without owning any tax. Simply by working hard and obeying the law of the land.

The Telegraph disclosed on Friday that a whistle-blower has provided HM Revenue and Customs with full details of every HSBC client who has an account in Jersey. More than 4,000 people based in Britain

That\’s much more shocking claim. If HSBC only has 4,000 accounts there they might as well shut up shop and go home.

8 comments on “Those HSBC accounts in Jersey

  1. If he’s not UK resident (be it for tax or because he prefers skiing) opening a UK bank account might be a problem anyway. Nationwide wanted to force me to move to Nationwide International (offshore) when I left the UK.

  2. Keith Richard’s autobiography Life is just great

    The man is awesome, he’s incredibly proud of his tax avoidance, implies the left are basically nuts and claims the only politician who he ever met who isn’t a scumbag is Vaclav Havel.

    Then there’s all that rock n roll stuff. Fecking great book

  3. The problem with the scenario painted by Tim is that the simple virtue of being absent from the UK for more than 90-days per year is insufficient to claim UK non-residence and therefore the tax advantages that come with it.

    James Blunt/Blount must actually make a declaration to HMRC (usually by filling in form P85) that there has been a substantial change in his circumstance, like taking up a foreign job abroad and that he is moving abroad for a SETTLED PURPOSE

    Merely travelling for whatever reason or for however long does not make you non-resident, it just means you get classified as being “Ordinary Resident”.

    This means that you would ordinarily live here, but are beating-the-bounds of the Empire at the moment.

    Of course, Mr. Blunt/Blount could be lying about his not having taken up Swiss residence, but that would be a matter between him and HMRC wouldn’t it?

  4. @John Galt – the situation is a little more subtle than you nclaim:

    “United Kingdom domiciled individuals who are not resident for three consecutive tax years are not liable for United Kingdom taxation on their worldwide income, and those who are not resident for five consecutive tax years are not liable for United Kingdom taxation on their worldwide capital gains. Anyone who stays in the United Kingdom for 183 or more days per year is resident.”

  5. More than 4000 _Brit_ accounts. I suspect HSBC (being not a terribly Brit-focused bank) have many, many more accounts there. Just most of them being evil furriners (or non-resident Brits.)

  6. If one takes as true what was in the article (which being from the MSM is a bit of a leap of faith) then Mr Blunt has no property in the UK and lives in Ibiza and Verbier when not working. Assuming he is in the UK for less than the relevant qualifying period, then I would say that he would have little problem convincing HMRC that he was not UK resident. Ergo all his non-UK income would not be subject to UK taxation. Which would I suspect be quite considerable, given he apparently had the biggest selling album of the 00s.

    These sort of articles amuse me. Do they really think that international pop stars, athletes, business people etc etc don’t have very clued up tax lawyers giving them highly relevant (and expensive) advice? Do they really think that James Blunt has been paid for his gigs in used £20s and taken the lot to Jersey in a suitcase to evade taxes?

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