He instead twisted Fink's words regarding 'everyone avoids tax in some way', which is a fair point given ISAs, pensions and trusts are all legitimate tax avoidance instruments that ordinary people use everyday, which was the point Fink was making.
Not sure I agree with that. Is buying food tax avoidance because it is zero rated? - children's clothing?
I wouldn't lump in VAT because people generally don't buy items just because they're zero-rated and it's an incentive to buy good food and keep your kids dressed. Fink was making the point that any tax he is avoiding, he is doing through legitimate instruments that are available to the general public and not through 'dodgy' convoluted schemes that HMRC did not intend for people to use. Miliband's refusal to repeat his exact words outside the Commons and his continued suggestion that Fink is avoiding tax immorally without a shred of evidence is frankly appalling. He smeared someone who has dedicated much of his time and money to charities, and his only crime is being a Tory donor. If he was a Labour donor, Miliband would have absolutely no problems accepting his money (and indeed he does accept money from donors who are alleged to be using complex tax avoidance instruments).
The former prime minister Tony Blair has received millions of pounds through an unusual mixture of commercial, charitable and religious income streams. Since he stepped down from office in 2007, his financial affairs have been described by observers as "Byzantine" and "opaque". The Guardian is now launching an online competition offering a prize to the person who can shine the brightest light on those financial structures.
Blair has a commercial consultancy, called Tony Blair Associates, plus jobs advising a US bank and a Swiss insurer. He has a multimillion pound book deal. He also has a charity, the Tony Blair Africa Governance Initiative, and another called the Tony Blair Faith Foundation. But much of the income, which includes charitable donations from other sources, has been funnelled through a structure called Windrush Ventures No 3 Limited Partnership. Our contest asks: what is Windrush?
Blair has a complex web of structures involving 12 different legal entities handling the unprecedented millions he is receiving since he stepped down from office in 2007.
So mystifying are the former prime minister's financial structures – which involve highly specialised limited partnerships and parallel companies – that the Guardian today launches an open invitation to tax specialists and accountants to attempt to explain the motivation behind such structures. We have published the Companies House documents and other legal papers regarding the structure of the partnerships at guardian.co.uk and invite expert comment via our site at guardian.co.uk/politics/series/blair-mystery.
There is no suggestion Blair is doing anything illegal. But he refuses to explain the purpose of the secretive partnerships.
Oh sure I readily agree that the Blair government were just as culpable in their inaction and even more hypocritical as a supposed "left wing" government. Although as I keep arguing, tax avoidance and evasion ought to be a politically neutral subject. Well it is. No matter what colour the government, none of them get tough, despite saying they will, and stories eventually emerge that they themselves have been at it. Power corrupts, absolutely. That's why you need strong journalism.
But I do think the culture of tax avoidance is stronger among the British than in other Northern European countries, so our tolerance of it is partly to blame.
Would it surprise the Charlton Life community to know there are at least four other global banks culpable of "sheltering" the assets of the wealthy from tax.
And that some "investment" schemes are based in Somalia where the book keeping is "so bad" that they are unable to reveal the true owner of the assets.
Yes four more banks whose client list may form the backdrop to this election. Yes, while global companies use Luxembourg to avoid UK vat and a proportion of high net worth individuals choose not to pay tax in the countries which made their wealth, we are fed a drip, drip diet of austerity and cuts and how everyone must pay.
The Greeks are showing the way - spend your way out of trouble - i hope they find a way to tax those who can afford it.
@PeanutsMolloy it may be the fiduciary duty of companies to maximise but I have already posted that the EU can take steps on Vat and the transfer pricing of intellectual property to level the playing field between local providers and offshore multi nationals. Your posts seem to insinuate that this is undesirable but the future without addressing this will be the continued homogenisation of the high street alongside smaller tax receipts from the big players. These tax receipts are needed for government to provide services to the customers so I would suggest no representation (in the marketplace) without taxation!
@calydon_road I thank you sir! Let's not pretend that the free movement of people does not have side effects. It increases competition in the labour market reducing contract value and it also creates a real challenge for less educated people with less valuable skill sets. This has become the target market for UKIP with Farage posing in pubs throughout the East and South coasts with a pint.
I'm in favour of raising the minimum wage to benefit those working and also as a way to reduce the benefits bill. Someone on this thread (or another?) mentioned that the government could recharge NHS costs incurred by EU nationals to their countries. Perhaps the EU should also introduce a mechanism to do same with benefits to eliminate this scapegoating. I didn't read the recent research on immigrants in detail but most (not all) immigrants are coming here to work, not for the weather (!) nor the benefits. I simply don't know the child benefit situation across Europe but it seems bizarre that an EU immigrant can come here for a couple of years and then carry on claiming for his/her kids wherever they were born and wherever they live. I'm sure there are people living in the US who are claiming child benefits from the Irish or UK governments.
Romanians and Albanians(!) are not the only ones scamming but it's politically explosive to juxtapose eastern European with benefit scrounger. The Daily Mail have been doing it for decades! And recent research tells me that the mail is the only paper to hold up on its pre Internet circulation. But just because they tell the same story year after year to millions of readers doesn't make it the root cause / solution to our economic challenges for this century. No, the real issues are tax (as addressed on another thread opened by @PragueAddick) jobs, lifelong education, the welfare state, health and pensions. Blaming immigrants is not going to solve any of these multi billion questions.
As some may realise, my post are actually supportive of the conditions required to continue with the Euro rather than lurch around or even witness the economic catastrophe should it break up. The Euro requires fiscal and political harmonisation to continue. It also needs certain big economies and political systems in the eurozone to mend their ways.
Let's see if the UK electorate choose a government who wishes to mend their ways in preparation for dealing with the challenges this century brings - health, demographics, globalisation, not to mention the three main threats of Putin, IS and a Euro break up.
He instead twisted Fink's words regarding 'everyone avoids tax in some way', which is a fair point given ISAs, pensions and trusts are all legitimate tax avoidance instruments that ordinary people use everyday, which was the point Fink was making.
Not sure I agree with that. Is buying food tax avoidance because it is zero rated? - children's clothing?
I wouldn't lump in VAT because people generally don't buy items just because they're zero-rated and it's an incentive to buy good food and keep your kids dressed. Fink was making the point that any tax he is avoiding, he is doing through legitimate instruments that are available to the general public and not through 'dodgy' convoluted schemes that HMRC did not intend for people to use. Miliband's refusal to repeat his exact words outside the Commons and his continued suggestion that Fink is avoiding tax immorally without a shred of evidence is frankly appalling. He smeared someone who has dedicated much of his time and money to charities, and his only crime is being a Tory donor. If he was a Labour donor, Miliband would have absolutely no problems accepting his money (and indeed he does accept money from donors who are alleged to be using complex tax avoidance instruments).
Not disagreeing with your principle, Fiiish - I just don't think pensions and ISAs are good examples of tax avoidance. For me, tax avoidance is using legal loopholes not deliberately created by government that are exposed by clever (and expensive) accountants, and generally require significant and/or high risk investments that are out of the reach of most people. Not illegal, I agree, but they need perhaps to be closed.
@PeanutsMolloy it may be the fiduciary duty of companies to maximise but I have already posted that the EU can take steps on Vat and the transfer pricing of intellectual property to level the playing field between local providers and offshore multi nationals. Your posts seem to insinuate that this is undesirable ......
Utter tosh. If you wish to ascribe views to me, please make them at least vaguely accurate.
Not disagreeing with your principle, Fiiish - I just don't think pensions and ISAs are good examples of tax avoidance. For me, tax avoidance is using legal loopholes not deliberately created by government that are exposed by clever (and expensive) accountants, and generally require significant and/or high risk investments that are out of the reach of most people. Not illegal, I agree, but they need perhaps to be closed.
Yep, I'd class ISAs and pensions as tax breaks. The tax on them is set that way because the Government wants to encourage those behaviours. Possibly a better example of "normal" tax avoidance would be setting yourself up as a limited company so you can pay yourself dividends rather than wages because they are taxed at a lower level. But that's still some way short of the kind of convoluted schemes the very rich can afford to take the piss with if they so choose.
@PeanutsMolloy it may be the fiduciary duty of companies to maximise but I have already posted that the EU can take steps on Vat and the transfer pricing of intellectual property to level the playing field between local providers and offshore multi nationals. Your posts seem to insinuate that this is undesirable ......
Utter tosh. If you wish to ascribe views to me, please make them at least vaguely accurate.
I'm afraid I was accurate - See page 1 of this thread. It's crystal clear that you, and many others believe individuals and companies should legally avoid tax. Given their duty is to maximise returns to shareholders you end up with Apple charging Luxembourg rates of VAT to all consumers in the EU and then paying next to nothing in corporation tax as they shift profits through Ireland and off to Bermuda. This is not an isolated case. Amazon, Starbucks, HP in fact every company in the software and telecom telecoms sector all whisk their profits from major EU economies offshore quicker than you can say Ken Dodd or Lester Piggott!
It is a citizen's right legally to avoid tax so far as possible and it is a board of directors' fiduciary duty to its shareholders to do likewise. It is the Government's right (subject to approval by the legislature) to make and amend the taxation legislation as it sees fit but tax avoidance that "loses" billions of £ to the Revenue is the fault of sloppy legislation by Parliament, not those legally minimising their tax bills.
People don't rate Milliband due to his persona and a few gaffes but he has struck gold this week with HSBC. Will this be a thin or a thick vein of gold? As posted above, I was told earlier today that there are at least four other major players in the banking world who have high net worth tax avoidance scams under investigation by regulators which are as big as if not bigger than HSBC.
You'd be daft to think that stuff like Panorama "exposed" (about seven years on) would not have been found amongst the private files of just about every single Swiss bank. It's just that HSBC was the one that had its files stolen.
Panorama identified two cases in which it alleged fraud and named the alleged perpetrators. Both claimed to have settled up with HMRC inferring they had taken advantage of a specific amnesty that came in under Labour's watch - an amnesty that you'd be daft to ignore in the knowledge that a) you were a customer of HSBC and b) someone had stolen and tried to sell their client details to the German authorities before 2009 which was public knowledge.
I am referring to the Liechtenstein Disclosure Facility that came in in 2009. It is still going today and still enables offshore tax evaders to come clean with immunity from prosecution. Guess what? There is no equivalent amnesty for onshore tax evaders, thanks for that, Labour, it has worked a treat, hasn't it?
@PeanutsMolloy it may be the fiduciary duty of companies to maximise but I have already posted that the EU can take steps on Vat and the transfer pricing of intellectual property to level the playing field between local providers and offshore multi nationals. Your posts seem to insinuate that this is undesirable ......
Utter tosh. If you wish to ascribe views to me, please make them at least vaguely accurate.
I'm afraid I was accurate - See page 1 of this thread. It's crystal clear that you, and many others believe individuals and companies should legally avoid tax. Given their duty is to maximise returns to shareholders you end up with Apple charging Luxembourg rates of VAT to all consumers in the EU and then paying next to nothing in corporation tax as they shift profits through Ireland and off to Bermuda. This is not an isolated case. Amazon, Starbucks, HP in fact every company in the software and telecom telecoms sector all whisk their profits from major EU economies offshore quicker than you can say Ken Dodd or Lester Piggott!
It is a citizen's right legally to avoid tax so far as possible and it is a board of directors' fiduciary duty to its shareholders to do likewise. It is the Government's right (subject to approval by the legislature) to make and amend the taxation legislation as it sees fit but tax avoidance that "loses" billions of £ to the Revenue is the fault of sloppy legislation by Parliament, not those legally minimising their tax bills.
People don't rate Milliband due to his persona and a few gaffes but he has struck gold this week with HSBC. Will this be a thin or a thick vein of gold? As posted above, I was told earlier today that there are at least four other major players in the banking world who have high net worth tax avoidance scams under investigation by regulators which are as big as if not bigger than HSBC.
I stand full square behind that statement. It says ABSOLUTELY NOTHING about desirability or otherwise of the EU taking "steps on Vat and the transfer pricing of intellectual property to level the playing field between local providers and offshore multi nationals".
If you wish to post pious twaddle on here that's your prerogative but I would appreciate it if you did not clumsily misrepresent the views of others in the process.
So now the whistleblower has been proved to have told the truth when he said he tried to warn HMRC about what info he had. Le Monde has found the email. It's therefore reasonable to assume that he also tells the truth when he says he followed up with phone calls.
HMRC told the Parliamentary sub-committee that they had "no record of" either. Now it is down to them to explain what happened, and not to cast doubt on the whistle-blower.
So now the whistleblower has been proved to have told the truth when he said he tried to warn HMRC about what info he had. Le Monde has found the email. It's therefore reasonable to assume that he also tells the truth when he says he followed up with phone calls.
HMRC told the Parliamentary sub-committee that they had "no record of" either. Now it is down to them to explain what happened, and not to cast doubt on the whistle-blower.
HMRC. NFFP.
This is what happens when you put Private Sector 'experts' in to run these public Sector organisations:-)
Never mind the mud-slinging. Lets get down to what has actually been going on, Here the Guardian explains very clearly how the HSBC scheme worked. It even has a handy walk through guide in case you have £20m or so you want to stash away off-shore.
Question for Fink's defenders. Is this HSBC scam a "vanilla" scheme or are we already up in strawberry ripple territory?
"This “withholding tax” on the income from savings interest, initially 15%, would then be handed over in bulk to Britain and other EU states, to compensate them for losses caused by anonymous tax dodgers."
An extract from the article. It doesn't make much sense. As I've already indicated, Swiss bank accounts tend not to pay much (if anything) in the way of interest, so there would not be much withholding to hand over on the basis that 15% of nothing is nothing. Withholding tax is nothing new. The yanks apply it to just about everything unless you regularly fill in a W8-BEN form.
Meanwhile, Fink has already stated that he had the HSBC account for when he lived, worked and was tax resident in Switzerland. Otherwise he had some family trusts, all of which sound entirely legitimate and not at all dodgy. The dodgy word, of course is the one that Miliband didn't want to repeat outside the confines of Parliament.
Talking of dodgy, it's a crying shame that the Met's Asst. Commissioner John Yates didn't do a proper investigation into the Labour Party's loans for peerages scandal. Yates (whose competency was later called into question and he quit) never looked at the right offences (which, ironically, were under legislation introduced by Labour). If he had, Jack Dromey, the Labour Party Treasurer might have been sweating a bit. Strange though that nothing ever came of it. (Or perhaps not, as Harriet Harman could call herself Harriet Dromey if she so wished.) Miliband needs to be a bit careful when throwing around dodgy accusations, some of it might come back to haunt him.
I'm in favour of raising the minimum wage to benefit those working and also as a way to reduce the benefits bill.
Well be careful with that - there can be unintended consequences. I'm all for people getting a respectable wedge but...
Let's take care homes for example: many rely upon staff on minimum wage, many are operating at very low profit margins and are being squeezed by local authority budget constraints. An increase to the minimum wage (staff wages are their biggest cost) is likely to tip many of them over the edge at just the time when we need more care home places not less.
It might reduce the benefits bill but it would only be transferring costs to other budgets. It is estimated that an £8 minimum wage as promised by Miliband would result in care homes either having to increase fees by 25% or shutting up shop. Both are likely to lead to a full-blown care home crisis at precisely the wrong time.
I'm in favour of raising the minimum wage to benefit those working and also as a way to reduce the benefits bill.
Well be careful with that - there can be unintended consequences. I'm all for people getting a respectable wedge but...
Let's take care homes for example: many rely upon staff on minimum wage, many are operating at very low profit margins and are being squeezed by local authority budget constraints. An increase to the minimum wage (staff wages are their biggest cost) is likely to tip many of them over the edge at just the time when we need more care home places not less.
It might reduce the benefits bill but it would only be transferring costs to other budgets. It is estimated that an £8 minimum wage as promised by Miliband would result in care homes either having to increase fees by 25% or shutting up shop. Both are likely to lead to a full-blown care home crisis at precisely the wrong time.
Ah Care Homes. Another Private Sector success story. Southern Cross anybody?
@ cafcfan I still don't understand quite how "vanilla" Fink's arrangement was, but rightly or wrongly, this is the test I'd apply as a voter: He says he did this arrangement while he was on a four year posting to Switzerland. He implies that he just happened to be there and was at the life stage where he needed to make decisions for his kids etc.
So the interesting test would be, had he been posted to, say Germany, rather than Switzerland, would this option have been open to him? If yes, fair enough. If no, it was an option that existed only because of Switzerland's notorious strategy of messing up Europe's tax regimes, so no, it is dodgy, in my book.
I'm in favour of raising the minimum wage to benefit those working and also as a way to reduce the benefits bill.
Well be careful with that - there can be unintended consequences. I'm all for people getting a respectable wedge but...
Let's take care homes for example: many rely upon staff on minimum wage, many are operating at very low profit margins and are being squeezed by local authority budget constraints. An increase to the minimum wage (staff wages are their biggest cost) is likely to tip many of them over the edge at just the time when we need more care home places not less.
It might reduce the benefits bill but it would only be transferring costs to other budgets. It is estimated that an £8 minimum wage as promised by Miliband would result in care homes either having to increase fees by 25% or shutting up shop. Both are likely to lead to a full-blown care home crisis at precisely the wrong time.
Ah Care Homes. Another Private Sector success story. Southern Cross anybody?
So now the whistleblower has been proved to have told the truth when he said he tried to warn HMRC about what info he had. Le Monde has found the email. It's therefore reasonable to assume that he also tells the truth when he says he followed up with phone calls.
HMRC told the Parliamentary sub-committee that they had "no record of" either. Now it is down to them to explain what happened, and not to cast doubt on the whistle-blower.
HMRC. NFFP.
This is what happens when you put Private Sector 'experts' in to run these public Sector organisations:-)
Has that happened in HMRC's case? Surely the opposite. We now learn that Dave Harkness, the HMRC head honcho who let Vodafone off £6bn worth of tax, did some consultancy work for HSBC after he left HMRC, in addition to his more widely known new role at Deloitte, a provider of industrial scale tax avoidance schemes. He's a right piece of work. But I doubt he could run a private sector company of any substance effectively.
@ cafcfan I still don't understand quite how "vanilla" Fink's arrangement was, but rightly or wrongly, this is the test I'd apply as a voter: He says he did this arrangement while he was on a four year posting to Switzerland. He implies that he just happened to be there and was at the life stage where he needed to make decisions for his kids etc.
So the interesting test would be, had he been posted to, say Germany, rather than Switzerland, would this option have been open to him? If yes, fair enough. If no, it was an option that existed only because of Switzerland's notorious strategy of messing up Europe's tax regimes, so no, it is dodgy, in my book.
Fink has stated he was tax resident and living and working into Switzerland when he had his bank account and he was using it, for all intents and purposes, the same way as you or I would use a bank account in our own countries of domicile. Since he was earning all of his money in Switzerland anyway, then no other country has a claim to tax it anyway. If we applied your logic, all French people living and working in this country benefiting from our lower tax rates are guilty of dodgy tax avoidance.
Fair enough that Switzerland (and other countries) does shelter income and wealth of people of other European countries that ought to be taxed in those countries and yes this is dodgy, but Fink was not moving income earned in other countries to Switzerland in order to benefit from tax breaks. Miliband has already backtracked on referring to Fink's arrangements as dodgy. Maybe he could find other wealthy political donor to aim his fire at instead, after all there are plenty of Labour donors using overseas banks to stash their funds. Or maybe he could end his party's practice of advising donors of the best ways to minimise their tax exposure so that they can donate more money to his party? Or maybe he could pay back all the IHT he has avoided with backdated interest?
@ cafcfan I still don't understand quite how "vanilla" Fink's arrangement was, but rightly or wrongly, this is the test I'd apply as a voter: He says he did this arrangement while he was on a four year posting to Switzerland. He implies that he just happened to be there and was at the life stage where he needed to make decisions for his kids etc.
So the interesting test would be, had he been posted to, say Germany, rather than Switzerland, would this option have been open to him? If yes, fair enough. If no, it was an option that existed only because of Switzerland's notorious strategy of messing up Europe's tax regimes, so no, it is dodgy, in my book.
Fink has stated he was tax resident and living and working into Switzerland when he had his bank account and he was using it, for all intents and purposes, the same way as you or I would use a bank account in our own countries of domicile. Since he was earning all of his money in Switzerland anyway, then no other country has a claim to tax it anyway. If we applied your logic, all French people living and working in this country benefiting from our lower tax rates are guilty of dodgy tax avoidance.
Fair enough that Switzerland (and other countries) does shelter income and wealth of people of other European countries that ought to be taxed in those countries and yes this is dodgy, but Fink was not moving income earned in other countries to Switzerland in order to benefit from tax breaks. Miliband has already backtracked on referring to Fink's arrangements as dodgy. Maybe he could find other wealthy political donor to aim his fire at instead, after all there are plenty of Labour donors using overseas banks to stash their funds. Or maybe he could end his party's practice of advising donors of the best ways to minimise their tax exposure so that they can donate more money to his party? Or maybe he could pay back all the IHT he has avoided with backdated interest?
You haven't answered my question . Was it just a coincidence that Fink decided to make these tax arrangements at this time, while he happened to be in Switzerland? or was it that while in Switzerland he was advised by one of the many doyens of that country's biggest Industry, that while there he can take advantage of some very juicy schemes that do not exist in, say, Germany?
The point being that Switzerland is not France, or the UK, it is a cesspit of international tax avoidance scams. There is however no obligation for an expat to use them, as it also has a perfectly normal PAYE tax regime with clearly defined rules for "normal" expat employees. To cross over to the dark side, you have to make a decision, no one forces you .
So now the whistleblower has been proved to have told the truth when he said he tried to warn HMRC about what info he had. Le Monde has found the email. It's therefore reasonable to assume that he also tells the truth when he says he followed up with phone calls.
HMRC told the Parliamentary sub-committee that they had "no record of" either. Now it is down to them to explain what happened, and not to cast doubt on the whistle-blower.
HMRC. NFFP.
This is what happens when you put Private Sector 'experts' in to run these public Sector organisations:-)
Has that happened in HMRC's case? Surely the opposite. We now learn that Dave Harkness, the HMRC head honcho who let Vodafone off £6bn worth of tax, did some consultancy work for HSBC after he left HMRC, in addition to his more widely known new role at Deloitte, a provider of industrial scale tax avoidance schemes. He's a right piece of work. But I doubt he could run a private sector company of any substance effectively.
Well you can start with the HMRC Board Chairman Ian Barlow (ex KPMG).
@ cafcfan I still don't understand quite how "vanilla" Fink's arrangement was, but rightly or wrongly, this is the test I'd apply as a voter: He says he did this arrangement while he was on a four year posting to Switzerland. He implies that he just happened to be there and was at the life stage where he needed to make decisions for his kids etc.
So the interesting test would be, had he been posted to, say Germany, rather than Switzerland, would this option have been open to him? If yes, fair enough. If no, it was an option that existed only because of Switzerland's notorious strategy of messing up Europe's tax regimes, so no, it is dodgy, in my book.
Fink was head honcho at the world's largest listed hedge fund Man Group. (I've had shares in them for donkeys years and probably should have sold out some years ago!) He could have based himself wherever he chose I suppose. Neither Man nor Fink's current venture have offices in Germany. (Probably for the same reason that most of Germany's investment banking arms do much of their business in London rather than Frankfurt.)
In the light of the present imbroglio, it's more than a little amusing that he came out of retirement to become CEO of a new venture, International Standard Asset Management which he set up in partnership with, wait for it, Lord Levy aka Lord Cashpoint who was of course chief fund raiser for the Labour Party. Now what was Ed saying about dodgy donors....
@ cafcfan I still don't understand quite how "vanilla" Fink's arrangement was, but rightly or wrongly, this is the test I'd apply as a voter: He says he did this arrangement while he was on a four year posting to Switzerland. He implies that he just happened to be there and was at the life stage where he needed to make decisions for his kids etc.
So the interesting test would be, had he been posted to, say Germany, rather than Switzerland, would this option have been open to him? If yes, fair enough. If no, it was an option that existed only because of Switzerland's notorious strategy of messing up Europe's tax regimes, so no, it is dodgy, in my book.
Miliband has already backtracked on referring to Fink's arrangements as dodgy.
Fink raised no objection after Miliband's Commons statement in relation to being lumped in with "dodgy" donors. He objected at the time to the use of "tax avoidance activities" in relation to his arrangements. Something that Miliband was happy to publicly restate and indeed Fink has described as being something we all do. Apparently.
It's only since he realised, presumably with advice from Conservative head office, that he was indeed involved in tax avoidance and this might not reflect well on the post of party treasurer, that he has attempted to go back and focus on the generic description of "dodgy" instead.
Personally, I think the term "dodgy" is so "vanilla" as he puts it that it borders on the pathetic to even bother responding to, which was his default position until he realised 24 hours later he was unable to defend his financial arrangements.
Are we now not allowed to refer to Thuram as a decidedly dodgy keeper for fear of a libel action???
@ cafcfan I still don't understand quite how "vanilla" Fink's arrangement was, but rightly or wrongly, this is the test I'd apply as a voter: He says he did this arrangement while he was on a four year posting to Switzerland. He implies that he just happened to be there and was at the life stage where he needed to make decisions for his kids etc.
So the interesting test would be, had he been posted to, say Germany, rather than Switzerland, would this option have been open to him? If yes, fair enough. If no, it was an option that existed only because of Switzerland's notorious strategy of messing up Europe's tax regimes, so no, it is dodgy, in my book.
Miliband has already backtracked on referring to Fink's arrangements as dodgy.
Fink raised no objection after Miliband's Commons statement in relation to being lumped in with "dodgy" donors. He objected at the time to the use of "tax avoidance activities" in relation to his arrangements. Something that Miliband was happy to publicly restate and indeed Fink has described as being something we all do. Apparently.
It's only since he realised, presumably with advice from Conservative head office, that he was indeed involved in tax avoidance and this might not reflect well on the post of party treasurer, that he has attempted to go back and focus on the generic description of "dodgy" instead.
Personally, I think the term "dodgy" is so "vanilla" as he puts it that it borders on the pathetic to even bother responding to, which was his default position until he realised 24 hours later he was unable to defend his financial arrangements.
Are we now not allowed to refer to Thuram as a decidedly dodgy keeper for fear of a libel action???
The difference being Thuram is a demonstrably bad keeper. Miliband implied in the Commons that Fink was engaging in immoral tax avoidance because he had a Swiss bank account. Fink countered that he actually and worked in Switzerland, hence why he had an account. There is no evidence he has ever used a financial product to avoid paying tax on income that would in normal circumstances expected to be taxed.
Miliband's weasel words mean libel action is impossible. Not all tax avoidance is immoral. Some investment instruments are intended by HMRC as tax avoidance measures. I'm not talking about ISAs, I'm taking about things like VCTs and structured products that are either protected in writing from tax or have been approved by HMRC as an acceptable way to reduce one's tax bill.
The tribalism here is ridiculous. The only reason why Fink is being smeared by Miliband and his sycophants is because he is a notable Tory donor. If Miliband had a shred of integrity he would publicly apologise and go after those donating to the Labour Party who actually do use overseas accounts to hide money from HMRC.
Prague - unless I'm mistaken, Fink has confirmed that he was not using 'juicy schemes' as you call them and that his banking activities in Switzerland related entirely to his domiciled status there. Whether or not products available to Swiss residents are better than those in other countries is irrelevant. It's identical to this country only offering ISAs to UK residents.
Putting aside tax evasion and Banks facilitating the practice, which should result in criminal charges, the case for immorality of “Vanilla” tax avoidance or any other flavour, is much more problematic.
I think you have to start by examining the State’s tax raising powers and rules. You can then question the very legitimacy of tax raising powers and whether it is right to challenge them indirectly by arranging affairs to mitigate them.
Just thought I would put an argument forward in support of tax avoidance on those grounds. In case anyone suggests, I have never been involved in tax avoidance, only evasion when fiddling my expenses (only a joke honest).
If I am an entrepreneur and I choose to risk everything I have on a business venture, and it eventually succeeds after being made bankrupt on the way and losing my house, and end up with wealth of £5m after taxation, I probably don't feel guilty. Someone else wins the lottery and gets £5m tax free and has potentially contributed nothing to society. If they have been 100% supported by the State do they have to repay anything? In a few years it might have been spent on drugs cars and women for all the State cares. Any encroachment to prevent that scenario would be a restriction on personal freedoms and is a non-starter. Why isn’t tax seen as an encroachment on personal freedoms and why should it be off limits for challenging the rules?
If I am the entrepreneur what is my perception of all this when I have risked all to generate jobs and wealth and paid tax along the way to support society and regarded as a parasite for arranging my affairs to optimise my personal gain. Whose fault is it that we are not generating enough wealth to pay for the benefits and investment that the State commits itself to, not mine.
Income was never taxed before the mid 19th century. Before that it was a one off levy to fund a war. Social taxation began when Elizabeth 1 levied a tax to pay for the Poor Law provisions. Those provisions have remained to this day updated as social welfare has developed. No one ever rioted against this tax and it would have been morally wrong to have avoided it knowing the consequences. Today we do not have that clarity on what our taxes are being used for to establish any moral imperative.
The point about taxation is that it is an infringement on personal liberty, that’s what Parliament said when income tax was first raised to pay for the Napoleonic wars and why it was repealed as soon as the wars ended. Parliament even tried to destroy all evidence the law had ever existed, so fearful were they of abuse by the State. One-off taxes raised for wars before that were even repaid afterwards, if there was money left over.
If it wasn’t an attack on personal liberty there would not have been riots and wars over taxation. The 100 years war with France, was in large part over the taxation by the English Kings. America fought the war of Independence over the legitimacy of taxation powers. King Charles was beheaded essentially over a dispute between the tax raising powers of the King and Parliament.
Until modern times those being taxed always knew why they were being taxed and what the money would be spent on. If you objected you rioted or went to war. Today tax is raised and then politicians decide how to spend it so we don’t know exactly what we are paying for in advance. If we object to this then today we employ accountants to mitigate the objection and legally avoid tax if we can. Rather better than a riot or a war.
Taxation is appropriation of a person’s property legalised by the State. Only difference compared to being mugged is that there is no violence, you know when it is coming, it is legal and you accept it because you wouldn't give up the money voluntarily and you will receive some benefit as a result. Once you stop seeing the benefit of being mugged your attitude will change. If you accept being mugged because their need is greater than mine, then you will not be objecting to paying whatever tax you are asked to pay and will sermonise those of a different persuasion.
Today we have the State no longer required to justify what it is going to spend the taxes on, we accept we are taxed, Parliament makes the rules and we live with it. Politicians seek to maximise revenue and often decide expenditure on political grounds to retain votes and power. Problem is politicians promise more than they can deliver so there needs to be a scapegoat – evasion OK - but "it's the immoral rich bastards fault in not volunteering to pay more tax" - is just scapegoating..
The only way that legalised theft by the State to support political objectives can be acceptable is to have rules in place that limit the power. It is possible to argue that there is no moral imperative to bow to the state’s unfettered power to raise tax if they can’t get the rules to do what they want. It is easy to argue that those in disagreement should not be forced by HMRC to bow to the Parliament's intentions in raising tax when the intention is open to different interpretations. It is easy to argue that there are no moral grounds for bowing to tax raising powers that require a voluntary submission to erosion of personal freedom not authorised by law.
We are being brainwashed by the Politicians under the guise of the State having “moral” powers of taxation. It is not moral, it is political. The implication that increasing tax revenues is the default solution to over extend spending plans should be a legitimate challenge.
So tax avoidance is entirely justifiable in the minds of those who challenge the presumption that we bow to the State’s tax raising powers whatever they might want to do with the money. Taxation is so fundamental a restriction on personal freedom I do not think it is right to imply that those who resist greater intrusion are unquestionably morally in the wrong. Few, I suggest, seek not to pay for essential services and infrastructure, it is the creep of politically motivated ventures requiring ever more State funding which many object to.
In our flawed Parliamentary democracy, there can never be the universal support of all voting taxpayers on how the State spends taxation revenues, and to create the perception that those legitimately challenging the State by not fitting in with the rules that permit legalised theft are immoral is simply part of the political smokescreen.
When politicians start spewing hot air about moral duties to bow to Parliaments wishes on taxation the smoke occasionally lifts and exposes their sheer hypocrisy.
So, is avoiding tax by banking in Switzerland any different from buying stuff while on holiday in Orlando which is cheaper than it is in the UK primarily because Florida sales tax is 8% while UK VAT is 20%?
Comments
Sniff sniff
They are all at it, whatever their colour
The last paragraph of this may be of interest
http://www.theguardian.com/commentisfree/2015/feb/10/with-penalties-so-weak-tax-evasion-is-worth-the-risk
and even his most arselikin friends questioned the last multimillionnaire labour man
http://www.theguardian.com/politics/2009/dec/01/mystery-tony-blair-finances
The former prime minister Tony Blair has received millions of pounds through an unusual mixture of commercial, charitable and religious income streams. Since he stepped down from office in 2007, his financial affairs have been described by observers as "Byzantine" and "opaque". The Guardian is now launching an online competition offering a prize to the person who can shine the brightest light on those financial structures.
Blair has a commercial consultancy, called Tony Blair Associates, plus jobs advising a US bank and a Swiss insurer. He has a multimillion pound book deal. He also has a charity, the Tony Blair Africa Governance Initiative, and another called the Tony Blair Faith Foundation. But much of the income, which includes charitable donations from other sources, has been funnelled through a structure called Windrush Ventures No 3 Limited Partnership. Our contest asks: what is Windrush?
Blair has a complex web of structures involving 12 different legal entities handling the unprecedented millions he is receiving since he stepped down from office in 2007.
So mystifying are the former prime minister's financial structures – which involve highly specialised limited partnerships and parallel companies – that the Guardian today launches an open invitation to tax specialists and accountants to attempt to explain the motivation behind such structures. We have published the Companies House documents and other legal papers regarding the structure of the partnerships at guardian.co.uk and invite expert comment via our site at guardian.co.uk/politics/series/blair-mystery.
There is no suggestion Blair is doing anything illegal. But he refuses to explain the purpose of the secretive partnerships.
but never mind the impeccable Guardian what about the Independent?
Blair's company paid just £315,000 tax on income of more than £12m
http://www.independent.co.uk/news/uk/politics/blairs-company-paid-just-315000-tax-on-income-of-more-than-12m-6287001.html
But I do think the culture of tax avoidance is stronger among the British than in other Northern European countries, so our tolerance of it is partly to blame.
And that some "investment" schemes are based in Somalia where the book keeping is "so bad" that they are unable to reveal the true owner of the assets.
Yes four more banks whose client list may form the backdrop to this election. Yes, while global companies use Luxembourg to avoid UK vat and a proportion of high net worth individuals choose not to pay tax in the countries which made their wealth, we are fed a drip, drip diet of austerity and cuts and how everyone must pay.
The Greeks are showing the way - spend your way out of trouble - i hope they find a way to tax those who can afford it.
@PeanutsMolloy it may be the fiduciary duty of companies to maximise but I have already posted that the EU can take steps on Vat and the transfer pricing of intellectual property to level the playing field between local providers and offshore multi nationals. Your posts seem to insinuate that this is undesirable but the future without addressing this will be the continued homogenisation of the high street alongside smaller tax receipts from the big players. These tax receipts are needed for government to provide services to the customers so I would suggest no representation (in the marketplace) without taxation!
@calydon_road I thank you sir!
Let's not pretend that the free movement of people does not have side effects. It increases competition in the labour market reducing contract value and it also creates a real challenge for less educated people with less valuable skill sets.
This has become the target market for UKIP with Farage posing in pubs throughout the East and South coasts with a pint.
I'm in favour of raising the minimum wage to benefit those working and also as a way to reduce the benefits bill.
Someone on this thread (or another?) mentioned that the government could recharge NHS costs incurred by EU nationals to their countries.
Perhaps the EU should also introduce a mechanism to do same with benefits to eliminate this scapegoating. I didn't read the recent research on immigrants in detail but most (not all) immigrants are coming here to work, not for the weather (!) nor the benefits.
I simply don't know the child benefit situation across Europe but it seems bizarre that an EU immigrant can come here for a couple of years and then carry on claiming for his/her kids wherever they were born and wherever they live. I'm sure there are people living in the US who are claiming child benefits from the Irish or UK governments.
Romanians and Albanians(!) are not the only ones scamming but it's politically explosive to juxtapose eastern European with benefit scrounger. The Daily Mail have been doing it for decades! And recent research tells me that the mail is the only paper to hold up on its pre Internet circulation. But just because they tell the same story year after year to millions of readers doesn't make it the root cause / solution to our economic challenges for this century.
No, the real issues are tax (as addressed on another thread opened by @PragueAddick) jobs, lifelong education, the welfare state, health and pensions. Blaming immigrants is not going to solve any of these multi billion questions.
As some may realise, my post are actually supportive of the conditions required to continue with the Euro rather than lurch around or even witness the economic catastrophe should it break up. The Euro requires fiscal and political harmonisation to continue. It also needs certain big economies and political systems in the eurozone to mend their ways.
Let's see if the UK electorate choose a government who wishes to mend their ways in preparation for dealing with the challenges this century brings - health, demographics, globalisation, not to mention the three main threats of Putin, IS and a Euro break up.
Aren't we just discussing the politics of envy?
Speaking as a simple serf
This is not an isolated case. Amazon, Starbucks, HP in fact every company in the software and telecom telecoms sector all whisk their profits from major EU economies offshore quicker than you can say Ken Dodd or Lester Piggott! People don't rate Milliband due to his persona and a few gaffes but he has struck gold this week with HSBC. Will this be a thin or a thick vein of gold? As posted above, I was told earlier today that there are at least four other major players in the banking world who have high net worth tax avoidance scams under investigation by regulators which are as big as if not bigger than HSBC.
Panorama identified two cases in which it alleged fraud and named the alleged perpetrators. Both claimed to have settled up with HMRC inferring they had taken advantage of a specific amnesty that came in under Labour's watch - an amnesty that you'd be daft to ignore in the knowledge that a) you were a customer of HSBC and b) someone had stolen and tried to sell their client details to the German authorities before 2009 which was public knowledge.
I am referring to the Liechtenstein Disclosure Facility that came in in 2009. It is still going today and still enables offshore tax evaders to come clean with immunity from prosecution. Guess what? There is no equivalent amnesty for onshore tax evaders, thanks for that, Labour, it has worked a treat, hasn't it?
If you wish to post pious twaddle on here that's your prerogative but I would appreciate it if you did not clumsily misrepresent the views of others in the process.
HMRC told the Parliamentary sub-committee that they had "no record of" either. Now it is down to them to explain what happened, and not to cast doubt on the whistle-blower.
HMRC. NFFP.
Coming up next, leaked footage of a bear entering a woods to defecate. Also, is the Pope a Catholic? Find out after these adverts.
An extract from the article. It doesn't make much sense. As I've already indicated, Swiss bank accounts tend not to pay much (if anything) in the way of interest, so there would not be much withholding to hand over on the basis that 15% of nothing is nothing.
Withholding tax is nothing new. The yanks apply it to just about everything unless you regularly fill in a W8-BEN form.
Meanwhile, Fink has already stated that he had the HSBC account for when he lived, worked and was tax resident in Switzerland. Otherwise he had some family trusts, all of which sound entirely legitimate and not at all dodgy. The dodgy word, of course is the one that Miliband didn't want to repeat outside the confines of Parliament.
Talking of dodgy, it's a crying shame that the Met's Asst. Commissioner John Yates didn't do a proper investigation into the Labour Party's loans for peerages scandal. Yates (whose competency was later called into question and he quit) never looked at the right offences (which, ironically, were under legislation introduced by Labour). If he had, Jack Dromey, the Labour Party Treasurer might have been sweating a bit. Strange though that nothing ever came of it. (Or perhaps not, as Harriet Harman could call herself Harriet Dromey if she so wished.) Miliband needs to be a bit careful when throwing around dodgy accusations, some of it might come back to haunt him.
Let's take care homes for example: many rely upon staff on minimum wage, many are operating at very low profit margins and are being squeezed by local authority budget constraints. An increase to the minimum wage (staff wages are their biggest cost) is likely to tip many of them over the edge at just the time when we need more care home places not less.
It might reduce the benefits bill but it would only be transferring costs to other budgets. It is estimated that an £8 minimum wage as promised by Miliband would result in care homes either having to increase fees by 25% or shutting up shop. Both are likely to lead to a full-blown care home crisis at precisely the wrong time.
I still don't understand quite how "vanilla" Fink's arrangement was, but rightly or wrongly, this is the test I'd apply as a voter: He says he did this arrangement while he was on a four year posting to Switzerland. He implies that he just happened to be there and was at the life stage where he needed to make decisions for his kids etc.
So the interesting test would be, had he been posted to, say Germany, rather than Switzerland, would this option have been open to him? If yes, fair enough. If no, it was an option that existed only because of Switzerland's notorious strategy of messing up Europe's tax regimes, so no, it is dodgy, in my book.
Fair enough that Switzerland (and other countries) does shelter income and wealth of people of other European countries that ought to be taxed in those countries and yes this is dodgy, but Fink was not moving income earned in other countries to Switzerland in order to benefit from tax breaks. Miliband has already backtracked on referring to Fink's arrangements as dodgy. Maybe he could find other wealthy political donor to aim his fire at instead, after all there are plenty of Labour donors using overseas banks to stash their funds. Or maybe he could end his party's practice of advising donors of the best ways to minimise their tax exposure so that they can donate more money to his party? Or maybe he could pay back all the IHT he has avoided with backdated interest?
The point being that Switzerland is not France, or the UK, it is a cesspit of international tax avoidance scams. There is however no obligation for an expat to use them, as it also has a perfectly normal PAYE tax regime with clearly defined rules for "normal" expat employees. To cross over to the dark side, you have to make a decision, no one forces you .
In the light of the present imbroglio, it's more than a little amusing that he came out of retirement to become CEO of a new venture, International Standard Asset Management which he set up in partnership with, wait for it, Lord Levy aka Lord Cashpoint who was of course chief fund raiser for the Labour Party. Now what was Ed saying about dodgy donors....
It's only since he realised, presumably with advice from Conservative head office, that he was indeed involved in tax avoidance and this might not reflect well on the post of party treasurer, that he has attempted to go back and focus on the generic description of "dodgy" instead.
Personally, I think the term "dodgy" is so "vanilla" as he puts it that it borders on the pathetic to even bother responding to, which was his default position until he realised 24 hours later he was unable to defend his financial arrangements.
Are we now not allowed to refer to Thuram as a decidedly dodgy keeper for fear of a libel action???
Miliband's weasel words mean libel action is impossible. Not all tax avoidance is immoral. Some investment instruments are intended by HMRC as tax avoidance measures. I'm not talking about ISAs, I'm taking about things like VCTs and structured products that are either protected in writing from tax or have been approved by HMRC as an acceptable way to reduce one's tax bill.
The tribalism here is ridiculous. The only reason why Fink is being smeared by Miliband and his sycophants is because he is a notable Tory donor. If Miliband had a shred of integrity he would publicly apologise and go after those donating to the Labour Party who actually do use overseas accounts to hide money from HMRC.
Prague - unless I'm mistaken, Fink has confirmed that he was not using 'juicy schemes' as you call them and that his banking activities in Switzerland related entirely to his domiciled status there. Whether or not products available to Swiss residents are better than those in other countries is irrelevant. It's identical to this country only offering ISAs to UK residents.
I think you have to start by examining the State’s tax raising powers and rules. You can then question the very legitimacy of tax raising powers and whether it is right to challenge them indirectly by arranging affairs to mitigate them.
Just thought I would put an argument forward in support of tax avoidance on those grounds. In case anyone suggests, I have never been involved in tax avoidance, only evasion when fiddling my expenses (only a joke honest).
If I am an entrepreneur and I choose to risk everything I have on a business venture, and it eventually succeeds after being made bankrupt on the way and losing my house, and end up with wealth of £5m after taxation, I probably don't feel guilty. Someone else wins the lottery and gets £5m tax free and has potentially contributed nothing to society. If they have been 100% supported by the State do they have to repay anything? In a few years it might have been spent on drugs cars and women for all the State cares. Any encroachment to prevent that scenario would be a restriction on personal freedoms and is a non-starter. Why isn’t tax seen as an encroachment on personal freedoms and why should it be off limits for challenging the rules?
If I am the entrepreneur what is my perception of all this when I have risked all to generate jobs and wealth and paid tax along the way to support society and regarded as a parasite for arranging my affairs to optimise my personal gain. Whose fault is it that we are not generating enough wealth to pay for the benefits and investment that the State commits itself to, not mine.
Income was never taxed before the mid 19th century. Before that it was a one off levy to fund a war. Social taxation began when Elizabeth 1 levied a tax to pay for the Poor Law provisions. Those provisions have remained to this day updated as social welfare has developed. No one ever rioted against this tax and it would have been morally wrong to have avoided it knowing the consequences. Today we do not have that clarity on what our taxes are being used for to establish any moral imperative.
The point about taxation is that it is an infringement on personal liberty, that’s what Parliament said when income tax was first raised to pay for the Napoleonic wars and why it was repealed as soon as the wars ended. Parliament even tried to destroy all evidence the law had ever existed, so fearful were they of abuse by the State. One-off taxes raised for wars before that were even repaid afterwards, if there was money left over.
If it wasn’t an attack on personal liberty there would not have been riots and wars over taxation. The 100 years war with France, was in large part over the taxation by the English Kings. America fought the war of Independence over the legitimacy of taxation powers. King Charles was beheaded essentially over a dispute between the tax raising powers of the King and Parliament.
Until modern times those being taxed always knew why they were being taxed and what the money would be spent on. If you objected you rioted or went to war. Today tax is raised and then politicians decide how to spend it so we don’t know exactly what we are paying for in advance. If we object to this then today we employ accountants to mitigate the objection and legally avoid tax if we can. Rather better than a riot or a war.
Taxation is appropriation of a person’s property legalised by the State. Only difference compared to being mugged is that there is no violence, you know when it is coming, it is legal and you accept it because you wouldn't give up the money voluntarily and you will receive some benefit as a result. Once you stop seeing the benefit of being mugged your attitude will change. If you accept being mugged because their need is greater than mine, then you will not be objecting to paying whatever tax you are asked to pay and will sermonise those of a different persuasion.
Today we have the State no longer required to justify what it is going to spend the taxes on, we accept we are taxed, Parliament makes the rules and we live with it. Politicians seek to maximise revenue and often decide expenditure on political grounds to retain votes and power. Problem is politicians promise more than they can deliver so there needs to be a scapegoat – evasion OK - but "it's the immoral rich bastards fault in not volunteering to pay more tax" - is just scapegoating..
The only way that legalised theft by the State to support political objectives can be acceptable is to have rules in place that limit the power. It is possible to argue that there is no moral imperative to bow to the state’s unfettered power to raise tax if they can’t get the rules to do what they want. It is easy to argue that those in disagreement should not be forced by HMRC to bow to the Parliament's intentions in raising tax when the intention is open to different interpretations. It is easy to argue that there are no moral grounds for bowing to tax raising powers that require a voluntary submission to erosion of personal freedom not authorised by law.
We are being brainwashed by the Politicians under the guise of the State having “moral” powers of taxation. It is not moral, it is political. The implication that increasing tax revenues is the default solution to over extend spending plans should be a legitimate challenge.
So tax avoidance is entirely justifiable in the minds of those who challenge the presumption that we bow to the State’s tax raising powers whatever they might want to do with the money. Taxation is so fundamental a restriction on personal freedom I do not think it is right to imply that those who resist greater intrusion are unquestionably morally in the wrong. Few, I suggest, seek not to pay for essential services and infrastructure, it is the creep of politically motivated ventures requiring ever more State funding which many object to.
In our flawed Parliamentary democracy, there can never be the universal support of all voting taxpayers on how the State spends taxation revenues, and to create the perception that those legitimately challenging the State by not fitting in with the rules that permit legalised theft are immoral is simply part of the political smokescreen.
When politicians start spewing hot air about moral duties to bow to Parliaments wishes on taxation the smoke occasionally lifts and exposes their sheer hypocrisy.