Famously the UK Swiss tax agreement was supposed to generate £3 billion of tax receipts this year. Even in June 2013 the OBR was saying there were:
expected capital tax receipts of £3.2 billion from the UK-Swiss tax agreement. Capital tax receipts from the agreement will flow in between now and July 2014
In that same document they said that receipts over the following year would be £2.9 billion. The tune has changed now. This is the forecast issued yesterday:
That £2.9 billion is now £1.9 billion and it will take until 2018 to get it.
As predicted this deal is a disaster for the UK, because it has permitted the continuation of Swiss banking secrecy and because Dave Hartnett did it so badly that the whole deal is riddled with loopholes. Do not think for a moment that this is because the money is not ion Switzerland or that it is all owned by non-doms. This is because so many trust and other arrangements were exempted from the arrangement that getting round this deal was ridiculously easy.
As some of us always said.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Alot of it, I understand, has gone to Singapore.
A lot of it, as I understand it, was never owed in the first place.
Just what many people claimed (but without evidence to support it).
Because of loopholes, as i arguec
Like the remittance basis? I understand lots of people with Swiss bank accounts were found to be resident but non-domiciled and using the remittance basis. Hardly a loophole.
yes it is
We could change it tomorrow
You mean because if the rules – the tax simply isn’t due!
Now if the rules were changed then tax might be due, but they haven’t been, and hence it should be no surprise that the actual tax received is much less than a fictional number based on what you’d like to be reclaimed!
But either way the estimates are wrong and this was a lousy deal
Something which is specifically provided for in the legislation is by definition not a loophole! The estimates were wrong, I have no doubt about that. But to call the remittance basis a loophole is frankly bonkers.
No it’s fact
And it’s almost certainly illegal discrimination in the basis of national origin
There is no defence for such a blatant loophole
How can something which is specifically legislated for be a loophole? Also, I think it might be difficult to pin your criticism on it being illegal discrimination (I assume under s1 of the Equality Act 2010?). Domicile doesn’t differentiate on the basis of national origin alone. My national origin might be the UK, but I could still be domiciled elsewhere for a number of different reasons. Criticise the policy and its enforcement by all means (and I wouldn’t disagree), but I think calling it a loophole or illegal discrimination is just not correct.
What else does domicile work on if not national origin?
“What else does domicile work on if not national origin?”
Well, domicile of choice springs to mind.
As does domicile by marriage.
As does the fact that one could be born a British citizen but still be non-UK domiciled by the historical antecedent of a father who was born elsewhere even if they came to the UK as a child.
There’s quite a lot of information about domicile on the HMRC website if you want to learn more about it.
I can assure you I know a great deal about it – indeed, a few years ago I broadcast on it often
There is no domicile no by marriage now – post 1974 changes – so number affected is fallen – just to make one point
Decision as to where to live permanently. To demonstrate, my mother is from the UK and my father is not. My father is non-UK domiciled at the time of my birth, but I was born in the UK. I intend to return to my father’s home country to live permanently once I finish university education. It could be argued that my national origin is the UK even though my domicile is not. In the same way, my father might come to the UK from India and adopt a domicile of choice here. His national origin is not the UK but his domicile is.
See how you get on with HMRC these days…….
HMRC might put me to proof, but the fact is if it is true (on the example above, that my father was non-UK domiciled when I was born) that I intend to leave the UK permanently once I finish my university education then legally I am non-UK domiciled and if I can show sufficient evidence that it’s my subjective intention to do so then HMRC can’t do much about it. Again, you might criticise the policy behind the law or its enforcement, but that doesn’t mean it’s a loophole or discriminatory as a matter of law.
Of course it us a loophole
Based on your subjective view of the future you may not pay tax
They do not come much bigger than that
The law says that you have a domicile of birth. If AB’s father was Indian domiciled than AB is, by law, Indian domiciled unless he chooses to claim a different domicile. There is a burden of proof on the individual to support a change of domicile so if AB maintains that he remains Indian domicile he will be.
This is no more a ‘loophole’ than the fact that people earning in excess of £150,000 pay 45% income tax when you’d rather they paid more is a ‘loophole’.
You are trying to create a climate in which any tax rule which results in people not paying the absolute maximum amount of tax you think they should is decried as a ‘loophole’. This shows either a paucity of your understanding of tax laws or your deliberate attempt to misrepresent tax statute.
Discrimination on the basis of national origin is illegal
As a matter of fact
£1.7 billion down, ouch!
Still, one billion is much like another.