Quite

As for Pessina himself, people with a foreign passport who don’t live or work in the UK don’t pay taxes here. That’s self-evidently how it should be, how it has always been and how it will always be.

Pessina, who is Italian-born, has never lived here, so how on Earth could anybody believe that he should be paying his taxes here? It would be laughable were it not so serious. In any case, because Pessina is Monegasque, there is no double taxation treaty between his country and the US, which means that he gets hit by a US withholding tax on all his dividends from Wallgreens Boots Alliance.

17 thoughts on “Quite”

  1. More strongly, people, even with a British passport, who do not live or work in the UK do not pay tax in the UK.

    I am genuinely worried that the disasterously US idea that citizens should pay tax in their home country might gain traction. Ritchie is of course a fan of this idea, despite being a dual national himself.

    Luckily, such a change would require re-negotiation of all the tax treaties, and it would be highly unlikely to succeed at all, and if it did it would certainly involve reciprocity (Ritchie thinks that the UK could do it unilaterally, of course.) Reciprocity would, it goes without saying, be disasterous for the UK as other countries put their taxation fingers into their UK-based citizens’ salaries, pensions, savings, inheritances, gifts, “research grants” from charitable foundations, and so on.

  2. More strongly, people, even with a British passport, who do not live or work in the UK do not pay tax in the UK.

    You’d be surprised at how many people, including expats, give me dark warnings over the fact I’ve not paid tax in the UK, or even submitted a tax return, since 2003. To pay tax in the UK you need to either spend time there or have income arising here, and neither applies to me. But countries like Norway and Australia make it a lot harder than the UK to “leave” for tax purposes that an effective citizenship tax operates in many cases.

    The problem the UK would have if they tried to follow the American model is exactly as you described (and that troll hilariously put on Ritchie’s blog), plus most UK expats would just start paying tax locally rather than to the UK. If I started getting tax bills from the UK, I’d just set up tax residency in France: not to avoid paying, simply because if I’m going to be taxed I’d rather pay into the place where I’m living.

  3. It’s not that so much ; it’s that the numpties want both depending on the case.

    You can have transaction at the point of the commercial activity – sell a book in the UK, it’s UK taxed, or at the company base.

    The numpties don’t get that if you sell a book in the UK, it’s UK taxed then if you sell a phone in Germany , it’s Germany taxed. But they want that money as well (that’s the Vodaphone complaint, it’s a UK company so tax should go to the UK).

    I’m sure Germany would be willing to agree to such a scheme.

  4. I thin the mentality of Murphy and his sometimes darkly comic followers (Reed, Wilcox, Horrocks, Crown and Dickie) is that all commercial activity everywhere by citizens of a state should accrue to the exchequer f that state (ideally at near to 100%) so the state can allocate it according to some hitherto nebulously defined notion of ‘civil society’ and ‘social justice’ – it’s a naked power grab, creating something not unlike the world envisaged by Orwell in 1984. Fortunately at the minute a number of practical barriers exist to fulfilment of that ideal, but they will work tirelessly to promote this and given the left wing stranglehold on the universities, their ideas, proven wholly disastrous in the former and current Communist states, are once more gaining currency.

  5. What vile little imperialists they are. Why not get a real job and create some actual value for the UK, if they care about it so much?

  6. Boots is an interesting one here.

    Before the Walgreens takeover, 80%+ of the business was in the UK but the HQ was a brass plate in Switzerland, and it absolutely did run the standard private equity “pay interest to the tax haven HQ that wipes out the profits you make in the place where you do your business” dodge.

    Following the Walgreens reverse takeover, that isn’t the case at all, and the whole shebang is subject to the US’s immense and near-undodgeable company tax regime (presumably because Pessina thinks that the gigantic tax hit is still less than the amount of money he’ll make by making Walgreens less awful).

  7. “Ritchie is of course a fan of this idea, despite being a dual national himself.” What, of the UK and Moronia?

  8. This is the great debate on whether someone “pays tax”, or they “pay UK tax”. Underneath is the even greater debate on “now you’ve got my tax what are you spending it on”.

    Ritchie and co ceaselessly promote payment of more and more of UK tax, but ignore that in the end it is destined to a bunch of economic ignoramuses to wee it up the wall on political vanity projects and leave us in even more debt. He even admits that the “tax gap”, which is essentially a hole caused by the government official brewery p*ss up committee (pending business), needs to be filled, by the very people who got pillaged the first time round!

    If Ritchie had an ounce of morality and respect for taxpayers, then he’d be asking the good and the great why they incessantly waste our hard earned cash (including that which has not even been earned yet), perhaps then we’d see a bit more pride in paying tax and a bit more willingness to hand it over.

  9. Tim N,

    “You’d be surprised at how many people, including expats, give me dark warnings over the fact I’ve not paid tax in the UK, or even submitted a tax return, since 2003.”

    You’d be amazed by the number of unthinking people who “think” that you don’t pay tax to your country of residence if abroad……

    Anyway, if Ritchie gets his way, is the NHS going to cover our healthcare costs that are out of pocket where we live? Is the UK going to pay to educate our children? Will the UK refund or compensate us for taxes that have no equivalent in the UK?

    Ritchie’s Bête Noire CH, whose system he clearly does not understand in the slightest, taxes all manner of things that are not taxed in the UK: wealth, gifts, lottery wins both domestic and foreign. Plus there can be church taxes. But because the ordinary income tax rates (as they exist in his mind) are not to his liking, he thinks it’s a tax haven.

    I’ve just run the numbers – a single catholic without kids living in canton Jura, who is paid the Swiss average wage (we should really scale these by average wages or PPP since the exchange rate and its variations make a mockery of this as “Seamus O’Leary” pointed out 😉 ) pays about 15% income tax (effective rate). On average wage in the UK he would be paying 12% income tax (you can be sure he won’t want to count NI or the Swiss equivalent in the calculation, but I can rework it if anyone cares).

    There is no Glorious NHS (envy of the world) in CH. So he has to pay compulsory health insurance. The cheapest health insurance costs him CHF 184.90 per month, which is another 3% of his income. And if he gets properly ill, he’s out CHF 3’200 from his own pocket.

    But yeah, let’s calculate his salary based on the current exchange rate, which results in about 20% overall rate, and make him pay the difference of 5% of his income to a country in which he doesn’t live and from which he doesn’t receive services, this rate varying from year to year based on the exchange rate. It’s the courageous thing to do, no?

  10. @Runcie

    Well, quite. MC’s corporation tax looks steep by all but US standards.

    Problem is, and the longer I live outside the UK the more I realise that people will take one or two datapoints from a foreign system and project it onto their own, leaving everything else unchanged.

    Plus, people tend to consider their “home” system to be normal, and that any deviation from that is abnormal. But on the other hand, how would British people react to the proposal of a gift tax that kicked in generally at EUR2,111 (NL), and is only just over EUR 5k between parents and kids? So, give a kid a car and pay tax…. Or a true inheritance tax (rather than an estate tax) that kicked in really rather low, e.g. EUR 20k for an inheritance from your parents (NL again)?

  11. Well, anyone who gives a kid a car deserves a kick in the bollocks. Let ’em save up for a motorbike as I did. What are school holidays for but a chance to earn an honest bob?

  12. @ dearieme
    “What, of the UK and Moronia?”
    You could be in trouble for that unless you can prove that you are yourself Irish.

  13. Every year I get the email from our accountants telling me that if I don’t fill out my tax return in the next few days HMRC are going to fine me £100. I’ve told them plenty of times I don’t live in UK but every year they harass me for this info. Problem is that I’m paid by a UK company into a UK bank account so I can’t really tell them to fuck off. That said, this year for some reason I got £20 from them so it’s not all bad; I toasted Richie while eating the takeaway that the £20 paid for.

  14. “Well, anyone who gives a kid a car deserves a kick in the bollocks. Let ‘em save up for a motorbike as I did. What are school holidays for but a chance to earn an honest bob?”

    Agreed – in NL it’s the recipient that pays the tax, although the giver can pay it for them.

    Just think of the fun that could be had with the incompatibility between the US gift tax (giver pays) and the Dutch or Swiss gift tax (receiver pays).

    But Ritchie is not bright enough to realise this. He just thinks MOAR TACKSES FOR THE UK, and that’s as far as it need go in his mind.

  15. “You could be in trouble for that unless you can prove that you are yourself Irish.” I understand that I would qualify for an Irish passport if I asked for one. I’m tempted to wait for a treble – Scottish, Irish, and whatever the remaining fragments of the UK might be called. Engwalster?

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