And the Tax Justice Network falls flat on its face

This is just too gorgeous, too, too, lovely.

The Treasury\’s attempt to tax wealthy individuals who hide their assets in Switzerland was declared an embarrassing failure by experts on Friday after the Swiss authorities said it would generate only a small fraction of the expected £3.2bn haul.

The Tax Justice Network campaign group said \”giant loopholes\” in the deal struck by the Treasury minister David Gauke and former HMRC chief David Hartnett had undermined the UK\’s attempt to trawl the Swiss banking system for untaxed funds.

According to the Swiss Bankers Association (SBA), the deal does not apply to most UK nationals who keep their cash in Swiss banks because they are not domiciled in the UK.

That is, there\’s not a lot of previously dodged tax to collect because not that many people have been dodging tax.

And recall, it\’s the TJN (and Ritchie) who have been screaming from the rooftops about how much tax is being dodged. There just isn\’t as much of it as they claim.

18 thoughts on “And the Tax Justice Network falls flat on its face”

  1. The fact that there is not as much money being collected by this measure is a sure sign that my estimates of tax avoidance are correct.

    This proves that many people are avoiding tax in the UK by having a Swiss bank account that would not be subject to UK taxes unless they were domiciled in the UK. If these non-doms had remitted the interest to the UK HMRC have sufficient powers to get the information already.

    People who are not within the scope of UK tax, as intended by the law, form a substantial part of my tax gap estimates. They might intentionally be outside the scope of UK tax but they are morally repugnant.

  2. Plus, people were given more than a year to show to their banks that the money was correctly taxed in the UK, or to change their address on the account to their weekend bolthole in the Dordogne, or to move their money elsewhere.

    Probably the bulk of the withholding was on normal folks who holiday frequently in CH and keep some pin money in a local post office account.

  3. The comments on that piece are every bit as depressing as anything I’ve eased through on a bit of Mail Online idiocy.

    Right at the top of them there’s a clear highlighting of the crux of the matter (obfuscated, as it was, by the article itself).. the shortfall is nothing to do with avoidance, evasion, or loopholes.. it was a dodgy estimate.

    Yet almost nobody else commenting grasps that. It’s just a flood of ignorance.

  4. Good lord, the stupidity in the comments thread! Not having a tax liability in the UK = a tax loophole!!! Good god!

    Plus, funny how the Left come over all patriotic when it comes to taxation, eh? Last refuge of the scoundrel and all that…

    There’s even someone suggesting that the atrocious fustercluck that is the American practice of citizenship-based taxation is a Great Idea that should be adopted post haste.

    Because it’s only fair that people who’ve never lived in the UK (a particular subset of “UK citizens”, which includes my kids) should pay taxes to the UK when they’re already paying in full where they reside.

  5. This just goes to show that the neo-liberal policy of allowing people to leave the country before HMRC has squeezed every last drop of tax out of them is ruining the NHS.

    Equally, foreigners allegedly born abroad and living in foreign parts, well it’s clearly a dodge to evade UK taxes.

    As John Cleese once famously said “To help the British economy, I think we should tax all foreigners living abroad”.

  6. “I would tax foreigners living abroad”

    “I would tax Raquel Welch, and I think she would tax me”

    Monty Python but something that you couldn’t make jokes of on the BBC now as treating both government policy and women with insufficient respect.

  7. Heh! I bet my dosh was both included in the TJN estimates and covered by the SBA statement. Until there is a citizenship tax, they can shove it up their arse.

  8. @Tim Newman,

    I hope that Tim is correct in that a citizenship tax would be discriminatory, hence illegal within Europe.

    On the other hand, I’d so like Richie to justify taxing poor people on the Indian subcontinent and in Africa who have British passports due to the vagueries of the old Empire.

    Plus, when Poland etc. reciprocate and claim the right to tax their nationals in the UK if the UK is taxing their nationals in Poland and thereby taking money out of the Polish economy…

  9. I have a great new idea which will close the tax gap permanently.

    1) tax all UK residents at 100%
    2) tax anyone with a UK relative at 100%
    3) tax anyone who has ever been here at 100%
    4) tax anyone who knows where the UK is on a map at 99% (note generous tax rate)
    5) all UK companies to be taxed on turnover not actual profit
    6) all Foreign companies to give all their taxes to the UK if they have a UK branch, a UK web address, or their name has a vowel in it.
    7) Tax all transactions at 100%. In addition to the taxes above.
    8) Tax air usage

  10. I must admit, I have been wondering what to do when the British government decide to demand I pay them tax even though I haven’t lived in the UK for years. I guess I’ll just send back my passport and tell them to stuff it, as many Americans do.

    As for offshore accounts, I had one when I was preparing to emigrate, so I could exchange Pounds for Canadian dollars whenever the exchange rate was good. I put the interest on my tax return and paid tax on it, as I suspect most people do. So I’m not at all surprised they’re finding that there’s very little extra tax to collect.

  11. didn’t they have an amnesty on overseas accounts a few years back? And they have no records of how many people used the amnesty? This is all bunkum, except that it seems to leave a £3bn hole in the national accounts. isn’t this wonderful news!

  12. Gah. Had my comment swallowed. Let’s try again:

    @Edward,

    I hope I have the cojones to just tell them to sod off and I’ll see them in court. Frankly, living in CH only works cos the tax rates are relatively low (they’re not *that* low) cos everything is so damn expensive. Paying UK rate would make me have to seriously reconsider my position here, which would make me an unhappy bunny.

    In any case, I would hope that if the idea were mooted, there’d be some classic Sir Humphrey moments in Whitehall: “So, Minister, how are we to deal with joint US/UK citizens resident in a third country?” “So we’re now going to recognise every country’s pension system? No? Then why should Brits abroad be prohibited from saving for retirement tax free, like everyone else?” “What about deductions for health insurance? No? So the NHS will pay Brits healthcare costs in Foreign? No? But we were under the impression that tax money was for skoolz’n’hospitals? Or at least that it was in return for public services” “Are you sure this won’t cost more to administer than it will bring in?” “And what about reciprocity – are we going to have Swedish-citizen doctors living in Council flats because the Swedes are taxing them at 60%?” “How are you going to get all the Commonwealth countries to enforce our tax laws against people whose grandparents were British?”

  13. “Doesn’t Denmark have a citizenship tax? (@abacab)”

    No. Technically only the USA and Eritrea issue taxes on the basis of citizenship and the Eritrean tax is only 2% and (allegedly) voluntary, although an Eritrean official was expelled for attempting to collect the tax from Eritrean citizens who were resident in Canada.

    One wonders when Canada will expel the US ambassador for the same offence?

    http://www.cbc.ca/news/politics/story/2013/05/29/pol-eritrean-diplomat-expelled.html

  14. Imagine if India came knocking on the UK’s door: their 30% rate kicks in at just over GBP11k. If their currency falls, it’ll kick in even lower.

    Sir Humphrey again: “And what about documents written in Foreign? Are we to translate them all? Or to force Brits working abroad to pay for certified translations?” “And do we treat NI-equivalent contributions as tax or not? Are we to work this out for every country?”

  15. Even for US Citizens working abroad, the costs of annual tax preparation are substantial @ $1,500-$2,000 for a UK / US CPA to do the necessary returns and additional mandatory IRS filings (FBAR, FATCA, etc.).

    Unless you earn far in excess of the foreign earned income and foreign housing exclusions, the annual cost of compliance will be far greater than the tax due, for no genuine benefit other than keeping the IRS at bay.

    Why on earth should people put up with that sort of bullshit for no benefit? Why do you think Americans are expatriating in record numbers.

    Only Ritchie, an acknowledged paid shill for the main HMRC union could come up with such draconian bullshit.

  16. Murphylogic:

    There is not as much money hidden here as I thought there was. If we assume that it is impossible that I am wrong it follows that it must be hidden somewhere else.

    If we never find it, we must assume that it is so well hidden that we can’t, which is a very heinous crime.

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