I have been musing on why the UK government is proposing to do such a disastrous deal with the Swiss government. A deal so bad that one of my usual critics from the Isle of Man has said:
Richard, I rarely agree with you, but on this occasion I have to admit that everything you have said is right. In fact, when I first saw the headlines, I thought that this cannot possibly be what the British government’s intentions are when they sign up for this.
If it is, then every other offshore centre will have to give way to Switzerland because they can no longer compete. Now, everyone who pays more than a 35% tax rate, or who doesn’t want to pay IHT on their estate can just put their money in Switzerland and it will be alright. If this deal becomes law, your work is now finished
So why this sudden enthusiasm in the ConDem government for supporting Swiss banking secrecy? Could it, possibly have anything to do with this man?:
You've met him before, here. He is, of course, the Rev Stephen Green, current chairman of HSBC, and former chair HSBC Private Banking Holdings (Suisse) SA. Yes, that HSBC's Swiss private bank. And he, of course, is shortly to become Lord Green and a Trade Minister in the ConDem government.
No chance then that he's already using his influence to suggest there's really nothing wrong with Swiss private banking? Even if it does undermine the whole future of tax collection in the UK?
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You just gotta love the Swiss bankers persistent mantra that Europeans put money in banks in Switzerland is “due to competency, stability and security. Tax is not the reason. No Siree it is not”.
What a load of codswallop. Then the Head of Swiss Bankers Association should kindly explain why anyone thinks that (1) HSBC or Barclays in Geneva is more competent than in London. In fact the funds for virtually every bank in Switzerland are managed from London. (2) Why is HSBC in Switzerland more stable and safer than HSBC in London (or Deutschebank in Geneva vs Berlin).
Swiss bankers must think the rest of the world are fools. Actually, maybe they are correct.. look how they pulling the wool over UK and Germany’s eyes regarding this scam tax agreement. Let’s see if Germany gets 5% of the estimated 30 billion fiscal revenue next year.
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Richard. As a Reverend maybe Stephen Green could be invited onto Radio 4’s Thought for the Day to give us the benefit of his wisdom on how manipulating tax collection is a Christian thing to do.
Why am I completely unsurprised that a major figure in the City is probably behind this disgraceful capitulation to the interests of the Swiss banking industry?
Richard, who should we write to to try and stop this?
@ Ivan
Because then you can feed 5 with the minuscule tax taken from 5000!
The Treasury keep telling us that if they close the CI Vat Loophole retailers will go to Switzerland…this is of course rubbish as record labels in the UK would never provide stock to a non UK Territory (and the CI are part of the UK sales territory with all the online retailers in Jersey registered for the UK charts) but interesting to note the S word.
@ Richard, I know of one CI retailer who is seriously looking into moving most of their operation to Switzerland. However this has been driven by the incompetence and high charges of Guernsey Post, rather than the VAT issue.
Well good luck to them. They won’t get marketing spend from major labels in Switzerland.
They aren’t in the music business, so that is not an issue.
Is it UK product ?
@ Richard Allen.
No.
If it’s not an EU product either then unfortunately that’s legit until they change the LVCR directives as it would be very difficult to show any distortion of competition if product is from outside EU. EU gets complaints all the time about that and they have a high level working party looking into new proposals. Abuse is another matter..that’s definitely not on.
@ Richard Allen, there are a number of CI retailers who do not exist purely to milk the VAT angle.
Yes agreed, but the Jersey Govt are protecting some who clearly are . Also since the MoU arrangements exist it is only fair that the threshold is reduced to the minimum so that those genuine companies pre pay VAT on most of the sales. Abusing LVCR for competitive purposes is still an abuse, albeit harder to prove.