Fun argument

No, my point is that the Uk government has the right to intervene if there is a breakdown in the rule of law. I do, of course, argue that this happens daily despite the supposed reforms that are going on in the Crown Dependencies of Guernsey, Jersey and the Isle of Man. Their legal systems are used, quite blatantly, to undermine the rule of law in the UK and in very many other countries around the world, including a great many in the developing world where as yet any form of information exchange with the Crown Dependencies is almost non-existent.


The UK Govt has the right (and duty) to intervene if the rule of law breaks down in the Crown Dependencies. This is not the same as stating that the UK has the right or duty to intervene if Crown Dependency law conflicts with something that we desire to happen in the UK.

In other words, they mean if rampaging mobs start stringing up accountants from the lamp posts, not if accountants aid people in dodging UK taxes.

32 thoughts on “Fun argument”

  1. Every socialist is a little dictator waiting to rule the world according to his beliefs given half a chance. I read that quote somewhere I cannot recall who said it.

    This article that you referred to has the underlining tone of a proper little dictator running through it. I cannot be bothered to find out what little shit wrote that.

  2. Scotland also undermines the rule of law in the UK by offering a different legal system and it is not even a Crown dependency.

    I argue, of course, that the UK government should impose English law in Scotland until such a time as they voluntarily agree to stop undermining English law by adopting English law in its entirety. Not doing so is the (in)action of a State of Cowardice.

  3. I agree with Murphy.

    How long can Her Majesty’s government put up with the blatant provocation of a nation that, deliberately and with malice aforethought, produced Alex Salmond and the Krankies?

    The amount of food it takes to maintain Salmond’s chins could feed an entire cohort of deserving tax inspectors for a year.

  4. “the rule of law” in this case has a meaning “what Murphy wants despite it being in contravention of both English and international law”

  5. Interesting concept of the “rule of law” as well.

    An entirely legal action, based on long-standing constitutional arrangements and tested frequently in the courts, is “undermining the rule of law”?

    No; he needs to understand the difference between the rule of law and the rule of a retired accountant in Norfolk.

  6. “The rule of force, I think he means”

    Richard Murphy – Special Forces Combat Accountant

    The stress! The stress!

  7. Complicated one this. The UK, like most jurisdictions doesn’t actually take kindly to offshore peeps aiding and abetting the evasion of UK taxes. No, not even in the channel islands.

    Way back, when I first left the sceptr’d isle and these places still had total banking secrecy, the invitations from my bank to attend cosy evening seminars in posh hotels and learn how to invest tax-efficiently through their Guernsey branch started coming thick and fast. With the blatant implication that “tax-efficient” meant evading taxes in the place I was resident (being not the UK). Were I resident in the UK they would not do business with me.

    So the UK, as protector of the channel islands, is happy for them to be used to evade foreign taxes but not UK taxes. This is as unsurprising as it is hypocritical.

    The core problem is the ambiguous status of these places. They are nominally independent but still not fully sovereign. They can cherry-pick the good bits of union with the UK but get to tell the UK to fuck off when it comes to the bits they don’t like (or which should require some payment). The parallels with Cameroon’s desire for the new relationship with the EU are obvious.

    I suggest these places, if they want total free rein to set their own laws without regard for the international consequences, set up their own army (rather than relying on the UK’s) and go their own way properly.

  8. ‘Intervene’? I think he got the wrong word, because he really meant ‘invade’.

    Of course starting a world war is a key part of the political system Ritchie’s borrowed from thirties Germany.

  9. He probably does mean invade. Which again is an interesting point. We are quite fine and dandy with heavy-handed military action against pirates operating out of inadequately-governed backwaters. To stop them nicking not just our stuff but other peoples’ stuff too.

    So why not deploy similar tactics against pirates who go armed with laptops rather than AK-47s?

    Indeed as they are not armed, there would be presumably little to no bloodshed.

  10. BiG, I would be very surprised if a major bank in the Channel Islands had been recommending tax evasion, certainly in the last 25 years.

    Avoidance I should think they do recommend, but not evasion.

  11. If it were avoidance rather than evasion they were peddling there would be no need to do that offshore in a secrecy jurisdiction. You can do tax avoidance without keeping secrets from the taxman.

    I hate tax as much as you do. That’s why I hate tax evasion.

  12. I think the banks could claim they were not recommending evasion. The customer was left to make their own decision about whether to own up to their taxman about their cash on the channel islands, but clearly there was no advantage to the customer in having a CI account if they were honest about it. That they were absolutely clear about not doing business with mainland-UK-resident brits (unless you could prove non-dom status) has to arouse suspicion.

    Once the CI started charging withholding taxes the invitations dried up. That’s either mysterious or consistent with my interpretation.

    Incidentally, I still have an onshore account with that bank, just in case I ever move back since it is such a PITA trying to open a UK bank account.

  13. “Every socialist is a little dictator” TheJollyGreenMan

    I see Richard Murphy as being in the Mussolini mould. Bumptious, pompous, overweight, faintly ridiculous but dangerous nevertheless.

  14. Phillip Scott Thomas

    I see Richard Murphy as being in the Mussolini mould. Bumptious, pompous, overweight, faintly ridiculous but dangerous nevertheless.

    If Murphy is Mussolini who wants to be Violet Gibson?

  15. I also maintain a UK bank account “just in case”. Not that I want to go back, but if needs ever must… Given how difficult it is to open an account there, how do all the east Europeans and other recent immigrants manage it?

  16. abacab –

    In places like Boston, King’s Lynn or Wisbech, I’ve seen Big 4 banks prominently advertising the benefits of opening an account with them in Polish (and in what I think was Lithuanian). It looked like all the T&Cs had been translated – certainly the main account details had been. I presume there were translation services available in branch – in the Fens that’s pretty ubiquitous. Their custom was being actively sought.

    (Translation by telephone link usually – I know a Pole who’s been here 8 years now who tops up their income working that way. I’m actually slightly surprised the work isn’t outsourced to Poland, given the wage and cost of living differential and the cheapness of communication.)

    Also worth noting that to get up and running in the UK – with accommodation, work, banking, and getting tax and benefits forms filled out – aside from traditional support networks, lots of east European migrants use specialist migration consultancies. So they have a good idea what hoops need jumping through.

  17. I wonder if there is any subject* on which the LHTD isn’t grotesquely ignorant?

    Economics and tax have been done to death chez Timmy and elsewhere and he’s now shown that he’s got no grasp of the basic principles of law. People with better subject area knowledge than me regularly point out his ignorance of his supposed profession. Etiquette, debating – even these are beyond him.

    * Okay – he may actually have some knowledge somewhere. “Quaker influence in early Fabianism” or similar – a Eoin Clarke “at least I know 1 thing” paltry excuse.

  18. BiG said “clearly there was no advantage to the customer in having a CI account if they were honest about it”

    Depends on your residency status.

    For example, the UK doesn’t tax non-doms on their foreign income even if they’re resident here, so it makes sense to earn their interest somewhere foreign that doesn’t impose source-based tax.

    Other countries have similar arrangements. Alternatively you could as an expat have a period when you aren’t fully tax resident anywhere, so your CI income is legitimately tax free.

    None of that relies on secrecy or non-disclosure, just no local (CI) taxation and a strange residence status which means that foreign income isn’t taxable in whichever country you’re living in.

  19. @Richard, there was, pre CI witholding taxes, no plausible benefit to an honest person living in an EU country (other than the UK) that taxes based solely on habitual residency (i.e. AFAIK all EU countries except the UK) of having an account in the CI. The only service they offered that you couldn’t get elsewhere was their refusal to talk to tax authorities.

  20. @ big
    My mother-in-law had a CI account when she and her late husband were British citizens living in Spain. Initially the interest was only subject to CI tax. Some time after they moved back to the UK the law was changed making that taxable – I can’t recall the exact date but *before that change* yes there *was* a legitimate tax benefit.

  21. Nonsense, BiG; there are plenty of legitimate reasons for a CI bank account and always have been.

    1) Not all EU countries have a full worldwide tax for residents. Just the ones I know of Ireland, the Netherlands, Spain, Portugal and Malta all have (or have recently had) varying exemptions for foreign income of resident foreign nationals and Cyprus has a 5% flat rate tax on foreign income for retired expats.

    2) It’s an easy way of keeping some of your money in sterling and with easy access to the UK banking system but without the UK’s 20% withholding tax on bank interest (especially useful if you’re planning on coming back to the UK). The withholding tax might just be a hassle, if you can claim exemption or a tax credit, but even a hassle is worth avoiding. But in some countries it can be a real cost, either because they don’t give credit for foreign withholding taxes (including Ireland, I think) or the top income tax rate is lower than the 20% UK withholding tax (Czech Republic & Lithuania, for example).

    3) Some expats move around and so don’t qualify as tax resident anywhere (I know someone who is doing that now).

    4) Civil law countries can have complex and unwelcome forced inheritance laws; keeping investments offshore can be a way of avoiding this.

    I confess I can’t think of a good reason for someone moving full-time to Germany, except the hassle-avoidance of (2), but there are plenty of other EU countries.

  22. I opened my IoM account when I moved to Dubai for 2 reasons: I didn’t want to be taxed on the interest, and the standard of banking services is slightly higher because they’re used to dealing with expats.

  23. @john77, did your parents declare their interest in the CI to the Spanish authorities?


    (1) Thanks for the correction, but is it true in all cases?

    (2) CI also collect 20% withholding tax.

    (3) This is possible, but harder to do than just spending your time between 3 or more countries. If a tax office wants to “claim” you they will look into where the “epicentre” of your life is. If you really are on the road with all your worldly goods in a camper van, or have a different squeeze with family in 3+ countries, you are probably in luck.

    (4) So the CI is used to evade the law?

    Why move to Germany? First ask Tim. In my case, to escape the third-world T&C on offer for my services in the basket case UK.

  24. BiG:

    1) True, it doesn’t work in all cases, but it works in many cases – so in many cases there is a legitimate use of a CI bank account (and in all cases it’s legitimate to look into whether it works).

    2) Jersey at least (not sure about Guernsey) gives the option of a withholding tax or automatic reporting of interest payments by the bank to the tax authority in the EU country where you are resident. The vast majority (95%+ from memory) opt for reporting – which supports what I have been saying, that for one reason or another they legitimately aren’t taxable at home.

    3) Yes, it’s a much smaller category than (1) or (2), but it still exists and so is another legitimate reason for CI ‘offshore’ bank accounts.

    4) No, it”s avoidance/planning (i.e. legal even if it’s disclosed, rather than evasion which is illegal and based on concealment). For example, in some countries, depending on your residence / domicile status, the forced inheritance rules only apply to assets held in the country. So if you hold investments outside the country they fall legitimately outside the inheritance laws. CI lets you do that without adding an extra layer of tax.

  25. You said there was “no plausible benefit for an honest person” in having a CI bank account – I’m showing that there are several entirely legitimate benefits for some people, depending on their circumstances.

    And quite a lot of people – there are 761,000 Brits in Spain, 291,000 in Ireland, 59,000 in Cyprus, 44,000 in the Netherlands, 38,000 in Portugal, 7,000 in Czech, 9,000 in Malta. That’s almost one and a quarter million just in the countries I listed as being the most likely to have a relevant tax exemption in their country of residence.

  26. P.S. – sorry, I wasn’t saying there was no good reason to move to Germany (I did it myself for a while).

    What I meant was that I couldn’t see much reason for someone moving to Germany to have a CI bank account, except for avoiding the hassle of double tax relief claims. But that’s because Germany doesn’t have the exemptions that a lot of other EU countries do.

  27. Actually the notion that the UK could intervene in Insular affairs is not all that clear. The UK usually relies on the Kilbrandon Report written in the 1960s where an emmient QC said something along the lines of:

    “while these places are independent I think there must be a reserve power of the UK to intervene to ensure that good government and law and order prevail”.

    That is it, there was no legal justification and in the history of the Crown Dependencies there has never been direct action as such. The UK can only legislate for the CDs with the CDs consent. They are not Overseas Territories and UK Law has never directly applied as it has in the UK. Nor have the CDs ever been directly rules from Westminster (unlike the OTs which have been).

    So while Ritchie might like to think the UK can intervene, they never have and thus far haven’t ever tried. They absolutely use strong arm tactics with the CD governments and use political pressure and power to intervene.

    But ultimately the justification for this theory is the opinion of a single Queens Counsel and as Ritchie said (incorrectly), every day 50% of all lawyers are proven wrong.

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