The Telegraph has just published a report on comments made by Mark Field, MP for the City of London and Westminster on the virtues of tax havens.
I've heard Field before. Very politely, he's neither much of an orator, thinker or logician and as to economics, he's clearly way out in the dark, but no such handicaps stop him promoting vested interests and he clearly had some in his pocket when addressing the meeting the Telegraph refer to. They report:
Westminster MP Mark Field sought to dismantle the arguments put forward by the likes of Nicholas Shaxson, author of Treasure Islands, an exposé of the secret world of offshore tax havens, and NGOs such asAction Aid, who often present the world's problems as solvable through the retrieval of money supposedly siphoned offshore.
In an attempt to balance the "one-sided" debate on international finance centres (IFCs), Mr Fields argued that UK corporate tax avoidance via international finance centres was, in reality, significantly lower than the £25 billion claimed by the TUC, and advised the UK government to think twice before imposing more regulation on these jurisdictions.
Together the Crown Dependencies make a significant contribution to the liquidity of the UK market. Together they provided net financing to the UK banks of $332.5bn in the second quarter of calendar year 2009.
These funds are largely accounted for by the 'up streaming' to the UK head office of deposits collected by UK banks including Lloyds Banking Group and Royal Bank of Scotland, as well as Barclays, HSBC, Santander and a number of building societies.
I often wonder where people like Fiel;d think this money comes from because it sure as heck does not come from 90,000 people in Jersey, less than 60,000 in Cayman or 23,000 in BVI.
So let me tell him where most of this cash coming into the UK comes from. It's the UK! Yes this is the phenomenon knonw as 'round tripping' where money goes offshore to be hidden, tax free, and then comes back. Much of it is corporate, of course, but all of it does the exercise to undermine regulation and tax in this country. But Field hasn't got the sense to realise that.
On the day when the City of London - the hub of the biggest tax haven network inb the wold, lost its moral case against #occupylondon Field would have been wise to shut up. The focus is now turning to the City - and the dubious nature of its activities. Supporting tax havens is just one of the ways it spreads its abusive practices around the world at cost to the world's poor. And we're not going to shut up about it now.
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Mr Field certainly met his match in Nicholas Shaxson!
Like the tax havens themselves he is living in Cloud Cuckoo Land.
Yes, I’m sure the Oxford educated, ex-Freshfields lawyer Mark Field is deeply wounded that you think his logic flawed.
If he has ever heard of you, of course…
Oh, I assure you he has heard of me
He refers to me
And he is, to put it very politely, a buffoon
And even the Tories know it
if the money comes back into the uk from a tax haven…..isnt it then taxed in the UK one way or another? i dont actually see the point of “round tripping” it.
Round tripping is designed to make sure that the investment into the UK is owned offshore where it is not taxed – when it would be if owned in the UK
The difference is 0% tax on companies in Jersey and 28% and falling here
And in Jersey the money is then spirited for use to the owners untaxed whereas 50% might be due here
It’s not hard to see…
You only have to look at why companies like ‘Play’ and supply you with super-cheap dvds and other things from ‘Jersey’. It’s distribution depot is in the UK (I believe) and just as they avoid VAT by setting up in Jersey or Guernsey I’ll bet those profits depart the UK sharpish before they get taxed.
Are you saying that S.13 and the transfer of assets abroad regs arent working?
Also, dont the CFC regs catch this stuff for UK companies?
Or are you just talking about non-doms?
CFC is being dismantled
Transfer of assets abroad is ineffective due to lack of resources and no effective information exchange
And non doms give cover to the abuse
It’s a complete mess – and I think the Tories want it that way
so you are saying the rules exist but are ineffective which may be true – however the same rules have been in place for years and years and the labour government did nothing to refine them either so to imply its all the Tories fault isnt particularly fair.
And let me be quite clear – I criticised Labour for it a the time and do so in retrospect
Round Tripping:
* Intricate plastic sugery for money
* Saville Row tailoring for dirty jeans
* Witness protection scheme – for hunted money
* A trip to the fancy dress shop
* Making a silk purse out of a pigs ear
Etc. And all at the expense of the poorest and most vulnerable in the world.
Closer Tax havens. Now!
I note the comment about round-tripping, but is it not the case that for years UK Governments of all persuasions have encouraged wealthy foreigners (the non-doms) to place their money into the banks of Crown Dependencies through their own tax policies. Those individuals make substantial tax savings by doing so and the banks in question then move the money into the UK. It is a strange twist of the legislation that the individual is discouraged from moving their money into the UK, but somebody else then does so. In fact the UK is fortunate that the funds are making it into the UK at all b because the “non-doms” could simply put their funds into banks that are further afield that don’t upstream the funds to the UK. I am not for one minute suggesting that these individuals choose the Crown Dependencies because they are being altruistic and looking after the UK, but the banks on offer and the location appears attractive to the non-dom. Crown Dependency banks are a pretty poor choice for those looking for secrecy, they would do far better with a bank in the US that is outside the scope of the European Union’s savings directive.
It is striking that the UK Government has finally started to realise that encouraging these people to keep their funds outside the UK is counter productive and they are consulting on allowing the non-doms to invest into UK businesses with funds that would otherwise stay outside the country, but the structure of UK tax law in general will encourage people to keep their money outside the UK for many years to come. What wealthy short-term resident in their right mind would bring all their funds into the UK where they could be subject to a 40% inheritance tax charge if they are unfortunate enough to die during those few years? This is a particularly striking problem in the case of a married couple both of whom are non-doms and planning to return home in due course, because unlike the normal situation the surviving spouse would not be allowed full inheritance tax relief on all assets he/she received. To me there is nothing “fair” about such a policy, but we all know that the definition of “fair” is in the political eye of the beholder.
If the UK wants to allow the non-doms to ring fence their bank accounts from UK income tax and Inheritance Tax then I am sure far most of the non-dom funds will flow directly into UK banks rather than passing through the Crown Dependencies. Until it does so a Crown Dependency bank will remain a very attractive stopping point.
I agree
But then I’ve done more than many to try to get rid of the non-dom rule
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