No, no, people never move because of tax: Ritchie tells us so

Jersey – you\’re sooo moneysupermarket.com. The island of Jersey is expected to be the new home of Simon Nixon, the multimillionaire founder of the price comparison site, which would allow him to shelter his £400m fortune from HM Revenue & Customs.

A move by Nixon, who owns just under 50% of the company and who – only two months ago – cashed in some shares to benefit from entrepreneur\’s tax relief, is likely to spark fresh concern about tax avoidance by British businesspeople and major multinational firms.

Earlier this week, senior executives from Amazon, Starbucks and Google were accused of diverting hundreds of millions of pounds in UK profits to secretive tax havens during a fraught exchange with a committee of MPs.

All three repeatedly denied accusations that they were engaged in aggressive tax avoidance, but were met with derision from members of the committee.

Nixon\’s relocation to Jersey is likely to save the 44-year-old, who currently lives in Cheshire, millions of pounds in tax that he pays on dividends from moneysupermarket.com.

Absolutely no such thing as the Laffer Curve in something like a free country, where there is the right to bugger off if you want to. We know this is true because Ritchie tells us so.

31 comments on “No, no, people never move because of tax: Ritchie tells us so

  1. Ah, ignore #1 above; need to think before posting. He’s probably used up his £10m entrepreneur’s relief limit, so it’s to avoid CGT of 28%.

    But still somewhat below the levels that Murphy thinks we should tax at.

  2. I find it hard to believe people need a reason to move to Jersey. It is expensive but one of the last habitable places in the UK. It actually works.

    Of course saving a few million makes it even better and no doubt makes the houses look cheap.

    But perhaps Ritchie will claim it isn’t about the money?

  3. Nixon’s relocation to Jersey is likely to save the 44-year-old, who currently lives in Cheshire, millions of pounds in tax that he pays on dividends from moneysupermarket.com.

    So somebody who is shortly to stop being a UK resident will shortly stop paying UK taxes? And this is considered news?

  4. So he has a £400m fortune and wants to save a few million pounds a year ?

    So if his stake in Moneysupermarket.com was worth £500m would he stay in Cheshire ?

    I always wonder whether these tax refugees are motivated by an ideological aversion to paying high rates of tax or a simple calculus about how much money they need ?

  5. If they move, they move. It isn’t news, nor part of any campaign. Unless, of course, they make their money in the UK, using the UK’s infrastructure and employing UK people that have been educated and given health provision by the UK.

    Sure, if they move and take their business with them, so what?

  6. Shinsei67 – “I always wonder whether these tax refugees are motivated by an ideological aversion to paying high rates of tax or a simple calculus about how much money they need ?”

    I would be happy to acquire that much money and let you know – if you happen to have that much dosh lying around to lend me. But I would guess it is a question of fairness. They are paying so much money and they are getting so little in return that they do not feel it is a reasonable exchange. So they leave.

    I can see why they might feel that.

    6Arnald – “If they move, they move. It isn’t news, nor part of any campaign. Unless, of course, they make their money in the UK, using the UK’s infrastructure and employing UK people that have been educated and given health provision by the UK.”

    It may well be news and it seems to be the result of a campaign. But suppose they have made their money in the UK, using the UK’s infrastructure and employing UK people that have been educated and given health provision by the UK. The people who have benefited from that are also mostly in the UK. They are the ones who have swapped coloured pieces of paper (which may be rapidly worth a lot less) for something they wanted a hell of a lot more.

    “Sure, if they move and take their business with them, so what?”

    If everyone does it, the economy collapses. It is the canary in the mine.

    7Arnald – “Like the Depardieu story below. Wow! Man moves elsewhere because he can!”

    You are implying a motivation you cannot know. You need to assume he is doing it because he can and not, as the rest of the Universe knows, because idiots like you have driven him off shore.

  7. So Butch It’s Bummery

    However, I seem to know a lot more than you on this one. So shut up.

    Rich folk do what they will. No one stops them. There isn’t a protest, otherwise there would be an exodus. It doesn’t happen. If you live somewhere then you like it and you will pay for it. If you don’t like it you go.

    Of course most of us don’t have that choice, but then we do have the vote.

    If that vote forces the hand of a few malcontents, so be it. There is no conspiracy.

    The people that have benefited are not those in the UK. They have had the least available. The real beneficiaries are the ones that suck the wealth.

    You obviously have no idea how life works.

  8. However, I seem to know a lot more than you on this one.

    Illusion or delusion, I can’t decide?

    The people that have benefited are not those in the UK. They have had the least available. The real beneficiaries are the ones that suck the wealth.

    Many people have cheaper services. Some people have jobs. A few people, who took most of the risk, made a lot of money. But, let’s be honest, his entire wealth wouldn’t keep the UK government going for 5hrs 11mins.

    You obviously have no idea how life works.

    This? From Arnald? It might be one of those attempt at humour things. In which case, I would suggest that he doesn’t give up the busking for stand-up.

  9. SMFS:

    “But I would guess it is a question of fairness. They are paying so much money and they are getting so little in return that they do not feel it is a reasonable exchange.”

    I’ve never heard the argument made that there should be an upper limit on how much personal tax one pays.

    Someone with an annual income of £50m will obviously pay a higher nominal sum than someone on £150k but the fairness argument usually deals with percentages. As long as the £50m guy is paying the same percentage as the £150k guy then that is fair.

    And getting so little in return ? Well of course you are getting very little. That’s the case with most well paid people. You don’t get a better state education or a better GP or more policeman just because you pay more tax.

    So I really don’t know why Simon Nixon doesn’t just enjoy his fortune in Cheshire, pay the same tax rate on his dividends as most other wealthy people with a share portfolio and feel proud that every year his taxes pays for a handful of school teachers and a few GPs.

  10. Suppuritious Feeble

    Not sure where you get the busking meme from, but I quite like it. As for stand up…I can be there all week.

    As for your nonsense, grow up and see it how it is and not how you think it is.

    I’m not sure what bubble you and your like inhabit but it sure ain’t a nice glossy one, more of a sputem belch.

  11. What Shinsei says.

    If you’ve got the wealth, what’s the point in relocating because of a mere shift in tax? It’s not the tax, it’s the location.

    He wasn’t happy (actually he hasn’t gone anywhere in this case) in England, and he has the means to move.

    It doesn’t make a case for anything other than he can move.

    Guy Hands made a protest. One person. And he can’t visit his wife and kids. Whadda big man he is.

  12. Unless, of course, they make their money in the UK, using the UK’s infrastructure and employing UK people that have been educated and given health provision by the UK.

    Ah, so they’re supposed to be grateful for all that the benevolent state has done for them (whether they wanted it or not)? Didn’t we take this approach with the colonies and, quite rightly, get told to shove it up our arse?

  13. Newman, you what?

    Turn it around. What’s the colonies got to do with it. Yet another hopeless argument.

    Frankly, though, yes. benefit from a country’s infrastructure, pay to maintain it. Instead of sucking it dry, but then you’d know about that, eh?

  14. “So I really don’t know why Simon Nixon doesn’t just enjoy his fortune in Cheshire, pay the same tax rate on his dividends as most other wealthy people with a share portfolio and feel proud that every year his taxes pays for a handful of school teachers and a few GPs.”

    Because his taxes don’t just pay for a few school teachers and the NHS. If they did he might quite well agree that the deal was a good one. Unfortunately the State takes his money and spends it on all sorts of things that aren’t as motherhood and apple pie as schools’n’hospitals. Such a benefits for every foreigner who turns up here wanting to blow us all to kingdom come, and aid for foreigners abroad (who quite possibly want to blow us to kingdom come), and stupid wind turbines, and politically correct nonsense of all kinds, a large payment to other parts of the EU, Nuclear missiles (if you happen to be anti them) etc etc.

    If I was in his position then I might just well agree that 50% of what the State spends my money on is entirely against my own principles and therefore make efforts to reduce that amount paid to as little as possible, by moving abroad if necessary.

  15. “Guy Hands made a protest. One person. And he can’t visit his wife and kids. Whadda big man he is.”

    Guy Hands’ fund then made a massive loss with his disastrous foray into EMI so he’s in the Channel Islands avoiding tax, only he doesn’t have any income to avoid tax on.

    Whoops. Like the Facebook guy who crstallized a tax bill on his FB shares at IPO price, renounced US citizenship, and finds himself poorer than he would have been had he done nothing and kept his US passport.

  16. Frankly, though, yes. benefit from a country’s infrastructure, pay to maintain it. Instead of sucking it dry…

    Well, I mentioned the colonies because this is pretty much the attitude colonisers take when the natives chuck them out. But we paid for all this infrastructure! We gave you an education! Without us you would have been nothing!

    Forcing people to use a politically-driven sub-standard education system and second rate health service and then expecting them to be grateful and remain in servitude isn’t far different from the attitude I describe above.

  17. @Jim

    Nice rant but unfortunately the numbers just don’t back you up.

    I don’t deny that the government spends (wastes) money on the things you say but they account for a small fraction of overall government spending.

    That’s why it’s so hard for Osborne to cut spending substantially.

    You have just the NHS, schools, defence, debt interest and pensions accounting for 50% of government spending.

    Unless you are prepared to cut salaries significantly there really are very few options for cutting spending drastically.

  18. Shinsei (#19), there is a lot of waste even in the health and education budgets.

    In 2000, the Department for Education & Employment spent £15.3bn. Inflation-adjusted that’s £21.1bn today. Actual Department for Education spending this year is £57.0bn.

    Is our education system more than twice as good as it was in 2000? No; in fact we’ve fallen down the international rankings in that time.

    Same with health. The NHS cost £40.3bn in 2000, that’s £55.6bn with inflation. This year the NHS is actually going to cost £108.8bn.

    Again, nearly double the cost. Is the NHS twice as good as it was in 2000? I doubt it. Some areas a bit better, others worse, certainly not worth twice the price.

    Huge extra costs for little or no extra benefits.

    That extra money has been pissed against a large wall. I don’t know exactly where or how, but doubling the cost for no increase in output suggests a huge waste.

  19. “I don’t deny that the government spends (wastes) money on the things you say but they account for a small fraction of overall government spending.”

    That may or may not be, but the point remains that as a taxpayer you don’t get to choose where your tax money is spent. I paid over £30K in tax last year, and probably will have to cough up the same fairly soon when the self assessment payment is due in January. I don’t see why even a small % of my hard work should be pissed up against a wall.

    Now if you are offering me the opportunity to hypothecate my tax payments, I’m all ears. I will untick the boxes marked overseas aid, benefits for foreigners, stupid overseas wars and EU contributions straight away. It might not save me much tax, but it would make me feel a lot better straight away.

  20. Is our education system more than twice as good as it was in 2000? No; in fact we’ve fallen down the international rankings in that time.

    Our education system is clearly inadequate, because it’s failed to point out the most basic of fallacies.

    Let’s assume that education in Anglophone places is already reasonably decent, because people can y’know speak and write and add and stuff. Let’s assume that education elsewhere isn’t, because they used to be run by mad tyrants and have now been set free by free market awesomeness. What results might one expect? Quite.

    Falling down the rankings is a sign that civilisation has won, not that we have failed.

  21. johnb,

    that argument is ok as far it goes, but this is worrying:
    http://www.bbc.co.uk/news/education-20346204“>Thousands of UK teenagers cannot read well enough to understand their GCSE exam papers, a large-scale analysis of pupils’ reading ability suggests.

    Yes I have read the whole thing and realise its not the full story, but still worrying given how much we spend on education.

  22. Yes, and they never could. The measures of literacy used for international comparison (ie the ones under which India is 60% literate, Nigeria 70%, etc) involve being able to read and write your own name whilst understanding that’s what you’re doing and being able to read it back.

    The UK reached that level around the turn of the 19th/20th century. Since then, there’s been a progressive and stepped improvement in educational standards (in terms of objective literacy and numeracy performance, not exam grades).

    Currently, the most interesting problem that teachers in poorer areas face is that kids whose folks don’t speak English are great at school and kids whose folks do speak English are terrible at school. There are a wide variety of suggested reasons for this, some of which are bonkers and some of which are sensible.

  23. Let’s assume that education elsewhere isn’t, because they used to be run by mad tyrants…

    Big assumption, that. The education system in the USSR wasn’t as good as the western commies made out it was, but it was still pretty damned good all things considered. Somehow, it got Uzbekistan literate in a generation. The UK’s has managed to do the opposite in two.

  24. Agree, USSR schooling was surprisingly good. Communist SE Asia, absolutely not; Confuscio-totalitarian SE Asia, exceeding everyone.

    Disagree on UK. Peasants and urchins could never read; and you don’t even know how to read to be a skilled operator of heavy machinery.

    Education has improved (highlighted most obviously when literacy and numeracy tests are done by age group), but not as much as the need for it has.

  25. Coming back to return on investment, if Jim @21 is paying 30,000 pounds per year, then that is the sort of sum that could put a child through Eton.

    For that sort of wonga I would expect a reasonable education from the state school system, yet over the last 30-years have actually and materially deteriorated, despite the propaganda over “Education, Education, Education”.

    Schools had less funding in the 1980′s than today, but delivered better outcomes in terms of actual, functional members of society without pauperising the middle classes.

    I would CERTAINLY argue that the difference in spending has been pissed away as spending has more than doubled yet ACTUAL outcomes, ignoring grade inflation have declined!

  26. Shinsei67 – “I’ve never heard the argument made that there should be an upper limit on how much personal tax one pays.”

    But you wouldn’t, would you? After all, there are a few thousand of them and there are a few tens of millions of us. Naturally most people are going to think taking money from them is a good idea. That does not mean they agree.

    “Someone with an annual income of £50m will obviously pay a higher nominal sum than someone on £150k but the fairness argument usually deals with percentages. As long as the £50m guy is paying the same percentage as the £150k guy then that is fair.”

    Well he isn’t paying the same percentage is he? He is paying at every stage of the process too. But I suggest that what you think of as fair would change if you were in his shoes.

    “And getting so little in return ? Well of course you are getting very little. That’s the case with most well paid people. You don’t get a better state education or a better GP or more policeman just because you pay more tax.”

    Well actually I think you do get more policemen. The way that Britain is policed does seem to involve more effort in nice places. But I take your point. Yes, they are getting little – less than most people because presumably they are paying for private education for the sprogs and have health insurance. And their own security systems these days. Which will change the way they look at the whole deal.

    “So I really don’t know why Simon Nixon doesn’t just enjoy his fortune in Cheshire, pay the same tax rate on his dividends as most other wealthy people with a share portfolio and feel proud that every year his taxes pays for a handful of school teachers and a few GPs.”

    Because so much of his money is wasted. And the relationship ceases to be fair at some point and simply becomes one of exploitation. He is paying so much and is rewarded by such contempt by people like the Guardian and the BBC. He is paying so much and getting so little. So naturally a little planning and estate restructuring to minimise that tax paying – all within the law – starts to look attractive.

  27. Arnald – “However, I seem to know a lot more than you on this one. So shut up.”

    Arnald, there is nothing you know more about than me. Not even your Mother’s past sexual history. Accept that and move on.

    “Rich folk do what they will. No one stops them. There isn’t a protest, otherwise there would be an exodus. It doesn’t happen. If you live somewhere then you like it and you will pay for it. If you don’t like it you go.”

    Rich people do do what they do. There is a protest as you can see by the fact this news is reported. And by the fact that in the old days you could not take your money out of the country without government permission.

    “Of course most of us don’t have that choice, but then we do have the vote.”

    Of course we have that choice. Fleeing Britain is not just for rich people.

    “The people that have benefited are not those in the UK. They have had the least available. The real beneficiaries are the ones that suck the wealth.”

    Your second sentence looks like English but isn’t. The people who have benefited, almost by definition, are the ones in the UK. If I have a tiger-repelling rock and you give me £40 for it, by definition it is worth more than £40 to you. Thus you are better off for buying it.

    “You obviously have no idea how life works.”

    Let me know when you have moved out of your Mother’s basement and she is alone in the house. Ahh, good times.

    13 Arnald – “If you’ve got the wealth, what’s the point in relocating because of a mere shift in tax? It’s not the tax, it’s the location.”

    Because you might want to keep the wealth?

  28. “the relationship ceases to be fair at some point and simply becomes one of exploitation. He is paying so much and is rewarded by such contempt by people like the Guardian and the BBC. He is paying so much and getting so little”

    Precisely. There is something deeply disturbing about the hatred that pours out of the Left on the issue of incomes and profit and their taxation. If you are being vilified in public by the media and politicians alike, despite the massive amount of tax you are contributing, why stay? If you are being called all names under the sun, its not really going to make you want to stay put is it?

    The uber-wealthy should be feted by the State, in the way the Stakhanovite workers were in the USSR. Hospitals should be named in their honour, and school children be taught about the people whose hard work and drive has created the wealth that pays for their education.

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