Tax

Restoring the corporation tax surcharge on banking profits to its former level, or even a catch-all windfall profits tax on the sector, will be high on the former Greater Manchester mayor’s list of possible actions in his hunt for additional sources of revenue.

But can he afford to risk a further assault of Britain’s most successful and tax rich industry?

Taxing the snot out of one of the things we’re good at doesn’t seem all that sensible.

You know, comparative advantage and all that…..

Angela Rayner has been cleared by HMRC of deliberate wrongdoing or carelessness over her tax affairs, the Guardian can reveal, paving the way for a potential leadership bid as Keir Starmer’s grip on power unravels.

The former deputy prime minister has settled £40,000 in unpaid stamp duty after initially paying the lower rate, but has not paid any penalty as a result of the investigation. HMRC was also satisfied there was no tax avoidance.

She’s paid the tax – how could there be avoidance? Anyway, as I keep insisting, avoidance is not a state, it’s an attempt. Which can succeed in which case it’s compliance, or not succeed in which case it’s evasion. Avoidance is not, as I say, a state or thing.

He hjust does live shouting that the Duke of Westiminster doesn’t pay tax.

The group paid out dividends of £53.7m to the duke’s family and its trusts, up from £52.4m in 2024. Grosvenor paid total taxes of £248m, against £107.4m in 2024, including £200m in the UK. This is largely because of UK property sales, which increased personal taxes on income and gains by £61m and corporate income tax payments by £71.9m.

Oh.

Along-running dispute between HM Revenue & Customs and commodities giant Glencore over a £1.5bn tax bill may be decided in secret by a panel of foreign arbitrators, after changes to UK law and trade agreements.

For 15 years British officials have been trying – and largely failing – to tax profits shifted from Glencore’s UK-based trading arm to a holding company in the Swiss canton of Zug, findings by TaxWatch shared exclusively with The Observer show.

In that period, four-fifths of the company’s profits were transferred abroad in return for “non-routine services”, which HMRC has claimed should be valued at “zero”.

In secret!

So this is the ISDS process. Which is, effectively, the ability to, outside the UK court system, find out whether the UK govt has obeyed UK law. You cannot appeal to “international law” under ISDS. Only to whatever treaties, laws, the govt itself has signed up to. So, the real test is whether govt is doing what govt said it would.

Which is appalling, obviously, making govt keep its word.

You know, like say the Vodafone case. Which was, at heart, whether Britain’s controlled foreign companies rules matched up with what the UK govt had signed up to with the EU’s free movement of capital rules. As the Cadbury case showed, no. So, Vodafone was won by Vodafone. At the ECJ of course – a foreign court testing whether the UK govt had lived up to hte law it had itself agreed to.

But then TaxWatch. Largely run by Richard Brooks who is the laddie who invented the Vodafone problem at Private Eye. So, at least consistent over the years – UK govt should not have to live up to whatever laws UK govt has signed.

One further joy is that TaxWatch is funded by Julian Richer who, you know, sold – wholly legally – his company without having to pay capital gains tax on the revenue from doing so.

Had he simply paid all the extra money he extracted from Ecotricity as salary or bonus, Vince would have coughed up nearly £27m in income tax, assuming a rate of 45 per cent. Of course, it’s hard to know the counterfactual, or precisely what he did pay. But, according to the tax expert Dan Neidle, the £7m share buyback would probably have been taxed at the top dividend rate, which was 37.5 per cent in 2015, while the £33m difference between his purchase and sale of shares in the Electric Highway Company would (assuming that HMRC concluded that the purchase cost of £49 really was market value) have been taxed at the capital gains tax rate then prevailing of just 20 per cent.

Worth reading this about Dale Vince. No, he doesn;t pay himself dividends, as he says he wouldn’t. It’s also true that his cash extraction from the company is really interestingly tax efficient. But read it all.

If you can’t get past the subscription, try archive.ph

That awareness has, in turn, made it easier to push back against well-worn arguments that any new tax would, sooner or later, affect middle- and lower-income households and that any attempt to demand more from wealthy companies and individuals would cause them to flee the state for somewhere cheaper, resulting in lost jobs and a weaker economy.

Research based on census data and Internal Revenue Service records does not tend to bear these arguments out. Rather, it shows that the primary reasons for affluent people to move from one state to another are work opportunities, family and lifestyle choices, with taxation a distant consideration in most cases if it comes up at all. The same holds for companies whose success is often rooted in their geographical location and in the staff they have hired and come to depend on. “Millionaire tax flight is occurring,” Michael Mazerov of the Center on Budget and Policy Priorities has written, “but only at the margins of statistical and socio-economic significance.”

All economics happens at the margin. What matters is how much margin?

A buddy/sometime business partner moved out of CA to WA precisely and only for tax reasons. And, yes, he’s now thinking about moving again as a result of this WA attempt to tax the rich again. And, sure, that’s the margin. But how much margin is the iportant thing, right?

All Britons should do their best to pay the minimum tax possible, Reform UK’s deputy leader has argued as he dismissed a newspaper investigation over his own tax affairs as a smear.

The more we fight about how much we must pay the lower is the peak of the Laffer Curve. Therefore, the less they can tax off us.

Of course, it’s possible to believe that politics only taxes sa much sa is necessary. But only an idiot would believe that. Politics taxes as much as it can – so, using the law to reduce payments means they can tax less. Less of life runs through the lanyard class, a good thing.

Rachel Reeves has drawn up a plan to cut tax benefits for workers using salary sacrifice schemes to buy expensive manual and electric bicycles, according to a report.

The chancellor is expected to introduce a new limit on how much people can spend on a bicycle through the cycle to work scheme in this month’s budget, the Financial Times said, citing people familiar with budget preparations, amid concerns that subsidising cycle purchases is not the best use of taxpayers’ money.

One government figure told the newspaper: “Cycle to work should be about helping ordinary commuters switch to greener travel, not giving tax breaks to high earners buying £4,000 e-bikes for weekend rides in the Surrey Hills. Taxpayers shouldn’t be footing the bill for luxury leisure.”

Bugger the scheme entirely. And all such as well. If x is the amount of tax we want then x is the amount. Whether you spend y – some amount of x – on a bike, an EV or whatever is nowt to do w’ it.

Rachel Reeves abolished this in April by bringing in a new system that, the chancellor said, would bring in £34 billion of tax revenue over five years.

However, analysis by the consultancy Chamberlain Walker casts doubt on her ability to raise that amount of tax revenue by calculating that 1,800 non-doms have already left — 50 per cent more than a forecast made by the Office for Budget Responsibility.

Mobile money doesn’t sit around to be taxed then, eh?

It is often difficult for people in India to remember life before Aadhaar. The digital biometric ID, allegedly available for every Indian citizen, was only introduced 15 years ago but its presence in daily life is ubiquitous.

Indians now need an Aadhaar number to buy a house, get a job, open a bank account, pay their tax, receive benefits, buy a car, get a sim card, book priority train tickets and admit children into school. Babies can be given Aadhaar numbers almost immediately after they are born. While it is not mandatory, not having Aadhaar de facto means the state does not recognise you exist, digital rights activists say.

You do not exist. Therefore we’re not going to tax you? I can think of workable ways around those restrictions in return for 45% of everything.

Of course, you’d need a non id number id number so that people knew not to charge you VAT…..

Downing Street is drawing up plans to reduce household energy costs and is considering scrapping VAT on fuel bills.

They need – sorry, want – more money. VAT is a not bad way to raise money. Stamp duty, CGT, profits taxes etc etc etc are bad ways to raise money. So, they want money, they’re going to reduce income from a not bad tax and have to make up the difference with worse ones?

Sigh.

Angela Rayner’s constituency home was valued at the exact threshold for inheritance tax when part of it was placed in a trust using a wealth protection firm.

Tax experts told The Times it was a “remarkable coincidence” that the property owned by the deputy prime minister and her former husband was valued at £650,000, the maximum amount allowed before the tax becomes payable.

Of course, of course, we’re going to have Spud thundering on about tax avoidance. Aren’t we?

We, on the other hand, will simply continue to insist there is no such thing. There is tax evasion and x complaiance. Avoidance could be an attempt but it is not a state. For upon examination anything and everything collapses down to one of the two states – illegal evasion of obeying the law compliance.

On the other hand of course she’s lying through her teeth. This hovel is north of the A4, no way it could be worth £650k.

Rachel Reeves’s “insane” plan to raise landfill tax could cause new-build prices to rise by £24,000, critics claim.

Industry leaders believe a 36-fold uplift to the levy will send construction costs soaring, causing developers to either stop building homes or demand higher prices from buyers.

Is it true? Dunno – looks a bit steep to me.

Is it useful? Sure. A good indication that none of these tossers ever look at second order effects.

Just look at when Rishi Sunak released his tax return. He is from one of the UK’s 350 richest families, yet paid the same effective tax rate as an average teacher, despite having income more than 50 times higher.

That doesn’t sound fair to me, and it won’t sound fair to millions of people across the country who are struggling to get by and fed up with politics working for the rich and powerful over everyone else.

So what’s your suggestion of fair then?

At the budget, Rachel Reeves could generate tens of billions of pounds by making tax changes that are overwhelmingly popular with the public and would be paid only by those with the broadest shoulders. Three-quarters of us want a wealth tax on net fortunes over £10m (backed by world-leading economists). Equalising capital gains tax with income tax is favoured by the majority too.

That 2% wealth tax would be a 100% tax upon risk free income.

No, really. Gilts pay 5%, you pay – -ish – 50% income tax on the interest. Then someone takes 2% of the capital value each year and that’s before we account for inflation so your tax rate is well over 100% then.

Or capital gains. So you own BP shares. BP already pays 20% or whatever corporation tax (and 78% on North Sea). So that’s 20% knocked off the value of your shares there. Now you want 45% income tax upon it as well? And without inflation indexing, so that again your real return will be asymptotically approacing zero. In fact, for long term holdings, will go below zero.

That’s fair is it?

Quite apart from what 100% and more taxation of the returns to investment will do to levels of investment…..

Fair?

Fuck off.

Treasury officials are expected to push the Chancellor to consider a mansion tax on property sales as well as more radical options including annual levies that would disproportionately hit homeowners in London and the South East.

Abolishing stamp duty and – because of course tax cuts are right out – replacing with a property tax, a land value tax, more council tax bands, makes a great deal of sense. Would be hugely beneficial in fact. For transactions taxes are a really bad idea and repeated taxes on real property are the last bad of our varied options.

OK, so, everyone now, hands up for those who think that’s what they’ll do. Rather than another transactions tax on top of current stamp?

At present, unlimited amounts of money and assets can be gifted to friends and relatives without paying any eventual inheritance tax, as long as the transfer happens at least seven years before the person giving the gift dies.

A so-called taper tax rate of between 8 and 32 per cent is applied to gifts given between seven and three years before death. Money given less than three years before is taxed at the full inheritance tax rate of 40 per cent.

A lifetime cap on gifts would allow the Treasury to raid funds given from parents to children many years earlier in an effort to boost the tax take.

My vision of a society is one in which that wealth to be independent flows down the generations. Fopr others it’s pone in which no independent wealth is possible therefore so is that independence impossible.

Ho Hum.

….while the amount that districts can increase council tax is capped, there is no cap for parish councils,

Can we guess, children? Ah, yes, knew we could. So the districts will devolve activities down onto the parish but proffer no budget. Therefore the parish tax will rise.

In April, a total of 11 parishes increased their council tax precepts by more than 300 per cent.

That Charlie Munger, eh?

Donald Trump has threatened to strip Rosie O’Donnell, the actress and comedian, of her American citizenship, labelling her a “threat to humanity”.

Mr Trump said the 63-year-old entertainer, a long-time critic of his, was “not in the best interests of our country” and called for her to remain “in the wonderful country of Ireland”, where she moved following his election win last year.

But a little thought.

If you voluntarily give up your US citizenship that’s a tax event. You pay all CGT up to that point and even, I think, the income tax you would have paid for some years forward.

So, would that apply if you had the citizenship taken away? There are people wh do lose citizenship after all. So, what does the IRS do to them?

He singled out two ideas for new wealth taxes to The Telegraph on Wednesday. The first is a 2 per cent tax on assets of more than £10 million, which is an idea being pushed by the Patriotic Millionaires UK campaign group, and the second is increasing capital gains tax in line with income tax.

“It is the broadest shoulders argument. ‘Distributed to each according to his need.’ That’s not Marx, it’s the Bible,” Mr McDonald said.

“I’ve made the case for the last six months for wealth taxes. I’ll continue to do so in the next six months because it’s right.”

Both such taxes would be above the peak of the Laffer Curve. They’d raise less income, not more…..

A Treasury spokesman said: “The UK remains highly attractive.

“Our main capital gains tax rate is lower than any other G7 European country and our new residence-based regime is simpler and more attractive than the previous one, whilst it also addresses tax system unfairness so every long-term resident pays their taxes here.”

Fairness is rather in the hands of the person who has to hand over the cheque. Or at least, one of the relevant views of fairness is in those hands. And they’re leaving.