What are these idiots talking about?

His company’s tax savings, now Ratcliffe has moved to Monaco, have been estimated at £4bn.

She backs this up with a reference to Baron Sikka of all people.

And you’d think that someone might have grasped. Where Jim Ratcliffe lives changes where Jim Ratcliffe pays taxes. Where Ineos is incorporated/resident, changes where Ineos pays taxes. Where you pay taxes of course makes a difference to the amount of tax you pay.

But where Jim Ratcliffe lives and pays taxes does not change where Ineos is resident and pays taxes. Because they are different legal persons with different residencies, see?

Inheritance tax is very fair

So it is said at least. Why should children benefit just because they won the lucky sperm club thing? And yet inheritance tax is also the most hated of all taxes:

What’s your financial priority for the years ahead?
I’d like to keep working for as long as I can, so that the wealth I accumulate can benefit my children.

Things do tend to get done to benefit children. That’s rather how the species works.

That is, those who say that inheritance tax is the best tax are those who haven’t met than many humans.

If I ran into a fortune by chance, I’d want to find a way to use it productively, and after setting some money aside for my children,

The Monty Python line was a joke

This would require a new tax on property sales and a levy on the freeholders which own many cladding-hit blocks. It also proposes additional taxes on non-dom and foreign buyers. From April, overseas buyers will pay a 2 percentage point stamp duty surcharge and the report said this should be increased further.

Let’s tax foreigners living in foreign countries was indeed a joke, not a plan.

Alex Cobham can bugger off ‘n’all

He is getting rather overheated:

“If the minimising of Indian tax revenues is ‘standard’ for British investors, that’s not a justification, it’s a condemnation,” said Alex Cobham, the chief executive of the campaign group Tax Justice Network. “India needs its tax revenues for schools and hospitals. We must hope that the chancellor himself is committed to the progressive taxation of wealth and top incomes, or the UK will only see the deepening of the stark individual, racial, gender and regional inequalities that the pandemic has laid bare.”

This is about people investing in India through Mauritius. Entirely and wholly legal by the way. And which does reduce Indian tax payable in the event of a profit.

So, the defence is? Well, investment in India benefits the Indian economy. A reduction in tax upon the success of an investment increases the likelihood and amount of investment. Thus offering tax breaks – whether they be to foreign investors directly, or by double taxation treaties of this type – thereby benefits the Indian economy.

The correct people to be making this decision – whether to offer such breaks or not – are the Indian government. Not colonialists like Alex Cobham.

Cobham would no doubt start to insist that Kim Clausing proved that this doesn’t work. As Kim Clausing has expressely and specifically denied she has done.

For those who have difficulty following the point – or are Cobham or Murphy, but I repeat myself – if corporate taxation changes the amount of investment that is done then the above at the top point about changing taxation changing the volume of investment is true. Clausing showed that she can’t see any change in the amount of investment as a result of changes in corporate taxation. Then goes on to agree that the reason for this is that investors are already not paying those local corporate taxes because they use offshore, double taxation treaties and the like. Therefore we cannot see the change in investment as a result of changes in tax because the tax isn’t biting upon the investment.

So, someone was paying attention

One way to try to ensure compliance and prevent avoidance would be to announce a one-off tax to be applied retrospectively to wealth held at a given moment in the past, then demand payment over the next five years.

But Tim Worstall of the Adam Smith Institute said this would be “akin to theft”.

He said: “Taxing people today on what they earned last year, changing the law on them, I regard as an appalling breach of civil rights.”

Nice idea but I don’t buy it

Magnus Henrekson, the head of Sweden’s Research Institute of Industrial Economics, points to the country’s lack of any form of wealth tax as a key motivation for entrepreneurs to make and keep their money.

Sure, without a wealth tax there’s more incentive to become wealthy. But there are many places without a wealth tax and not all of them have a start up scene like Sweden.

CGT at 30% when income tax can top 60% (including social charges) might be an incentive. No inheritance tax so dynastic fortunes can be created might help. Being a more free market economy than the UK or US could be a boost too. But the absence of a wealth tax? Naah, that’s too common a feature.

Err, yes?

Donald Trump maintains a bank account in China where he pursued licensing deals for years, according to a report that could undermine the president’s election campaign claim that he is tough on Beijing.

Tax records reviewed by the New York Times showed a previously unreported bank account in China controlled by Trump International Hotels Management. The account paid $188,561 in taxes in China between 2013 and 2015 in connection to potential licensing deals, according the newspaper.

Earlier reporting by the Times showed he paid just $750 in US taxes in 2016 and 2017.

If the NYT actually thought about this they’d realise that the taxes Trump paid in China come off his US tax bill…..

Well, umm, yeah, you know?

The announcement of his non-prosecution agreement on Thursday came as prosecutors brought tax charges against Robert Brockman, a Houston billionaire whose money launched Mr Smith’s private equity career in 2000. Mr Brockman denies the charges against him

So, anything interesting you can tell us that might help with your sentencing then?

As prosecutors indicted Mr Brockman in a $2bn personal tax evasion case that is the largest of its kind in US history, they said that Mr Smith would face no charges for his scheme to evade taxes by hiding some of his Vista Equity profits offshore. In return, he had agreed to continue co-operating.

Sorry, how do you spell that? Mr. B..r…o…c…..OK got the rest of it. That’ll help.

Not the most ridiculous of policies

If you were Chancellor, what would you do?

I would simplify the tax system so there were no ways to get out of paying tax. I’d raise the threshold at which you start paying income tax and make everyone pay the same standard rate – probably around 30 per cent.

I think the Government would make more tax revenue overall because there would be fewer tax dodgers. Also, by raising the threshold, more people on low incomes would be taken out of tax, so I think it would be fairer.

Indeed, I recall a proposal from Madsen of exactly this – well, near exactly, the tax rate was 33%.


In June Rishi Sunak, the chancellor, said that the coronavirus crisis had made tech giants even “more powerful and more profitable” and that they needed “to pay their fair share of tax”.

However, The Times has learnt that Amazon, whose total British tax bill last year was £293 million on sales of £13.73 billion, will not have to pay the levy on goods it sells itself. Instead it will have to pay the 2 per cent charge only on revenues it receives from third-party sellers that pay to use its marketplace platform.

The tax is upon platforms. So as not to tax the online sales of, say, John Lewis. So, Amazon charges it on use of the platform and not in its sales.

Doesn’t make sense

So, the tax gap.

The Government’s claim that £31billion of taxes go uncollected each year is based on a misleading algorithm created for the American tax system, it can be revealed.

Revenue & Customs is now working on major changes to the calculation which could see the figures altered radically – up or down.

OK, interesting.

But there is disquiet that the use of US software could be giving a very misleading picture as America and Britain have quite different tax systems.

In the US, almost everyone fills out their own tax return, in contrast to Britain’s PAYE system that taxes salaries before money is transferred to bank accounts.

Idiocy. You think they don’t have withholding in the US?

Blimey, Snippa gets one right

Tax Research UK founder Richard Murphy says this will be the “easiest tax on Earth to pass on”, as the tech giants like Facebook, Google, and Twitter are “effectively monopoly suppliers”.
“The reality is those platforms are unique and they can therefore pass the cost on if someone wants to advertise with them,” he says.
This stems from the fact the tax is on revenue, instead of profit. “This is essentially a sales tax levied on top of VAT on these companies and what we know about this form of sales tax is that it’s passed straight onto the consumer,” Murphy says.

So it is possible for him to grasp tax incidence then.

Now all he’s got to do is apply the same corpus of knowledge to corporation tax….

Quite so, quite so

Capital gains tax, actually all taxes on investment, should be abolished. The correct taxationsystem is:

He said the IFS had long called for the introduction of an “average rate of return allowance”.

Because here’s the thing. We like investment, investment makes the future richer. It’s what makes the future richer. As we also know, tax something and you get less of it. So, don’t tax investment to make the future richer.

And yet economic rents should be taxed. Normal returns to capital not, but “excess profits”, stuff earned by having a corner or a privilege, should be and harshly.

So, distinguish between that normal return on capital (say, the average return in the economy, something like 3 to 5% real, currently this is horribly depressed by QE but in normal times not far off normal long term gilts yields perhaps) and such excess returns. Tax the latter and not the former.

This now accords with best theory – optimal taxation theory, Mirrlees and all that – and also solves the political problem. The plutocrats get taxed and the average saver not so much.

But then just because something is sensible doesn’t mean it will become policy.

Well, no, not really

Google’s UK staff took home an average of £234,000 last year on the back of £441m in share-based payouts at the search giant.

The company’s UK business saw its total wage bill rise to more than £1bn for its 4,439 UK employees – an increase on the £829m earned by staff in 2018.

However, the company’s tax charge for the year fell from £65.6m to £44.3m. Around £10.6m in taxes were deferred.

The only logical manner of calculating the tax charge is “What is the tax charge on this activity?” – not which legal person or entity is nominally responsible for which bit of the tax bill. We do know that tax incidence exists after all.

Of that £billion in wages some £300 to £400 million will have gone in tax, no?

Christianity has been learnt well here then

They say if you want something done, ask someone busy, which Julian Richer certainly is.

Alongside the hi-fi retailer he founded as a teenager under the arches of London Bridge in 1978, the entrepreneur runs seven non-profit organisations, including the Good Business Charter (GBC), an accreditation scheme that launches on Monday.

Baptised at 47, Richer speaks freely of his faith. He says he is motivated to do good “for Jesus”, so it is perhaps no coincidence that the charter is comprised of 10 commandments to commit companies to improving their behaviour voluntarily.

These include pledges on paying fair tax,

This all being funded by having sold the business free of CGT and income tax.