As the Guardian notes this morning:
The Conservative party treasurer is calling for a major change in tax laws so that Britain can compete with offshore havens.
Lord Fink, the Tory donor and hedge fund chief, disclosed in an interview that he had lobbied George Osborne for a cut in taxes on invisible earnings so that he and other hedge funders no longer feel obliged to set up companies in places such as the Cayman Islands.
His justification is:
"I don't see why the UK should not compete for jobs that at present are going to the Cayman Islands. I lobbied George Osborne when the Tories were in opposition. I have long felt that the British government loses jobs to tax havens by allowing the Revenue to have these rather archaic rules."
Of all the stupid arguments for allowing tax haven type laws in the UK this has to be about the worst. Fink must know that 99% of all tax haven companies have no staff at all: they're simply slots in filing cabinets. The only jobs involved are those of the accountants, lawyers and bankers in tax havens who operate these charades on behalf of clients based elsewhere. And even in a place like Jersey the absolute number of jobs involved is small. So this argument holds no water at all.
But that's not the point of this. What such claims hide is the fact that the Tories are already making the UK like a tax haven. So far they have abandoned the residence basis for UK corporation tax so head office companies based in the UK are no longer taxed on their world wide income. That's in complete contrast to warm blooded domiciled human beings who live here.
And it's now going to be the case that most large UK companies can now set up subsidiaries offshore knowing HMRC will have no power to challenge the arrangement or tax the income on its return to this country.
In addition , for those largest companies with their own in house treasury function HMRC is now offering a 5.5% tax rate to induce the recording of that income in a tax haven rather than in a UK. Indeed, if Jimmy Carr had done his tax abuse as a PLC it would be pretty much condoned by HMRC now: that's the paradox.
So the Tories are already turning the UK into a tax haven. And there is just one aim in all this, which is to make the richest corporations and their directors and advisers richer at cost to everyone else.