One of the things that has pleased me, but has gone mostly unnoticed by the commentariat, is the steps taken by the Coalition to address the problems caused by tax havens and banking secrecy.
Agreements with Switzerland and Liechtenstein have generated significant tax yield, all of it presumably from wealthy people with an ambiguous view on personal morality, and recent announcements of similar disclosure agreements regarding bank accounts in Guernsey, Jersey and the Isle of Man can be expected to generate further funds. Best of all, they make it harder for criminals - and those who fail to declare income from funds held offshore are criminals - to continue to offend.
Today, Bermuda, the Cayman Islands, the British Virgin Islands, Anguilla, Montserrat and the Turks and Caicos Islands come into the fold as well, making life even harder for those with ill intent.
Importantly for advocates of tax transparency, the information will be shared by Britain, Germany, France, Italy and Spain, which agreed in June last year to work together to combat tax evasion.
However, we do need to be careful about the way we deal with those who hold funds offshore. The existence of bank accounts in exotic locations such as the Turks and Caicos Islands does not in itself prove wrongdoing or an intention to evade. There may be legitimate reasons why they might choose to use such facilities. Nonetheless, it is reassuring to know that the veil of banking secrecy has been lifted somewhat.
And, of course, the United Kingdom, and its fiscal deficit, will benefit from reduced tax evasion in coming years...
5 comments:
Of more delight to me is the fact that the UK Uncut Legal Action case against the "sweetheart" deal between HMRC and Goldman Sachs has got as far as it has.
It is right to pursue money in overseas tax havens, but it makes a mockery of this when our domestic tax collectors can apparently waive £20m of taxes from Goldman, almost as a "favour to chums".
I tend to the view that the Goldman Sachs affair was cock-up rather than conspiracy, but until such time as that can be publicly demonstrated, I fear that we may never know. This is down to the British desire for privacy, in that we are not generally keen to have our friends and neighbours know about our personal affairs.
Companies also want a degree of privacy, as full publication of tax information can provide valuable information to potential competitors.
But nonetheless, the amount of potential yield arising from these agreements dwarfs the amount of interest omitted from the settlement with Goldman Sachs, and we shouldn't overlook that.
I'm not sure that the Goldman business is a cock-up, as recent history seems littered with examples of this "generosity" on the part of the Tax Man e.g. Vodafone.
PLC's, who have to lodge and publish audited accounts, are generally transparent. It is certainly not an obligation to publish information which would give away business secrets or advantage, and as far as I recollect, there is no requirement to state taxes in anything other than general terms.
However, secret deals between HMRC and companies, made over cosy lunches and so forth, are quite a different matter. They are a misuse of power and a form of corruption. Any ad hoc rule-changing which is a response to overtures made by companies is surely nothing else?
Of one thing we can be sure. If anyone succeeds in obtaining these yields from the overseas tax haven users, then someone, other than them, will end up making good their "loss". My experience suggests that Joe Public foots the bill one way or the other.
That, Yalleriron, implies that you haven't read the National Audit Office report into the Goldman Sachs and Vodafone settlements, or that you simply don't believe it.
And there is a catch with applying a black and white view towards taxation. In the more complex cases, where the very interpretation of tax law is at stake, HMRC is expected, and perhaps obliged, to take a view as to whether or not a deal is more cost-effective than litigation. You would like to think that issues such as precedent come into play, but do you agree a settlement, or risk losing it, or the gains made, through testing the matter in court?
And finally, on your point about Joe Public footing the bill regardless, that sounds like an argument for not bothering. Exposure of the overseas bank holdings of individuals is a good thing, and making sure that they pay something rather closer to the amount due is, frankly, even better.
In light of what is reported in today's (Friday 3/5/13) Independent, under the heading "Goldman tax deal agreed 'to save Osborne from major embarrassment'", I can assure you that I do not believe the NAO reportage.
I agree that there has to be some nuance in tax law, as there is in civil law. In this particular case, I cannot see any arguments or indeed facts which would make this anything other than a "sweetheart deal"; either very foolish or downright illegal.
I take your point about settling or litigating, but if HMRC and by implication, the Government (this or any other) back down for fear of spending money or losing the deal, then that is simply a surrender. The authorities are capable of spending huge sums of money daily, on various legal and related matters, many of which are, in my opinion, simply an expression of them throwing their weight about.
In the same way as I don't think that possible legal costs or the risk of losing should deter HMRC and Government where there is a case of malfeasance, I would not suggest that these holdings should not be pursued. I make the observation about Joe Public because, after all, HMRC and Government have almost no money other than that which is provided by that generous individual, whether he likes it or not.
Post a Comment