Repeat after me:
Jersey’s not a tax haven
Jersey’s not a tax haven
Jersey’s not a tax haven‚Ķ‚Ķ
Which is why the Jersey Evening Post reports today:
Eighteen of Jersey’s [tax exile]residents paid less than £10,000 in tax last year, the Assistant Treasury Minister said yesterday.
The figures were revealed during States question time as Deputy Trevor Pitman quizzed Deputy Eddie Noel over the tax contributions paid by some of the Island’s richest residents.
Deputy Pitman said that many middle earners were paying three times more tax than some of Jersey’s richest residents.
Now start again:
Jersey’s not a tax haven
Jersey’s not a tax haven
Jersey’s not a tax haven‚Ķ‚Ķ
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Its a disgrace. Aren’t they supposed to pay a minimum of £200k a year Jersey tax under the 11k rules?
Now I don’t agree with the tax haven label but the subject matter I do agree on. Rich tax residents in Jersey do deals when moving there and some of the terms are crazy. If eighteen of them paid less than £10,000 tax last year this is unbelievable and totally unfair.
Many years ago I had a client resident in Jersey (he moved there after semi retiring) who was worth about £40m (not in cash I may hasten to add) and they agreed with the Jersey tax authorities that they would pay £100,000 a year tax irrespective of their earnings. I couldn’t believe what good terms these were. Mind you they did employ many locals to work for them on a full time basis…they were also a part time property developer and often leased out property…sometimes charging market rent, sometimes lower rent to help small/ start up businesses and sometimes rent free to charities etc.
Although overall they were a good samaritan and did spend their wealth locally, employed many islanders etc but I still thought the tax deal was low…mind you this is what they agreed with the authorities…and I think therein lies the problem the authorities appeared to pitch their requirement very low…and I got the impression they would have paid more tax if the authorities had required it.
Maybe Richard has innocently come up with an idea to fill Jersey’s coffers…by getting all multi-millionaires to pay a minimum rate of tax etc…if those eighteen all paid £100,000 per annum that would be an additional £1.6m in the coffers!
John
Assume somebody from the UK moved to Jersey and was worth £40m. Most unlikely that they’d be solely invested in cash at 1.5% interest rate, so let’s assume they are holding a mixture of assets generating an income of 5% (ie some corporate bonds and some property rental yields). That’s £2m a year of income. Ignore any possible capital gains. Let’s be even more cautious and call it £1.6m. In the UK they’d be paying 50% income tax, or £800,000. I bet they would happily pay £320k, ie 20%. In other words, if the tax rate in the UK was only 20% would they have bothered moving offshore? I doubt it. Jersey has sold itself far too cheaply.
@John Buckles
Hello John!
If we were to analyse, in fine detail, each of these 18 wealthy people paying £10,000 only in income tax, then I think we would find that they are of little worth to Jersey, and it’s community.
Some may have businesses locally, and employ people, however I’m not aware of any 1(1)K resident who has created new jobs. Those people employed, would otherwise most likely be employed doing the same work for someone else.
Any domestic staff they employ, are most likely on fair low wages, at or just above the income tax threshold, and so they too are not contributing much tax.
Also, they tend to have homes which occupy substantial land, on a island which is small, and densely populated. This exacerbates the housing shortage, and unaffordable house prices, for the majority who live in Jersey.
Certainly some do give significant sums to charity, but that doesn’t help the tax revenue shortage, in Jersey, and the current cuts being made to health, education, and the rest.
How many of us have the luxury of paying so little in tax, and only having to give money to charity, as and when we feel like it?
Can I make myself clear…I think that the tax deals that have been done are totally unfair. I used an example from real life of a person I knew quite some time ago who was pretty wealthy and was willing to pay more tax but this was the deal offered to them and they took it (most probably would). As Rupert has summed up “Jersey has sold itself far too cheaply.”
This is not the half of it.
There are, I will concede, many people who support the 1(i)k clause on the basis that they bring income into Jersey, and (they say) the income supports the economy as much as the tax take. I happen not to believe that, but would be willing to be proved wrong if need be.
But what is wrong is that the 1(i)ks not only get the right to buy housing. They get an immediate vote. They get immediate rights to start a business. Their children get immediate entitlement to grants. If they need it (unlikely but possible), they get immediate social security. All for paying Malcolm Campbell (the chief tax man) under £10k a year.
Just for comparison: someone who isn’t employed but is resident (say, living on a spouse’s salary) will be charged full Class 2 stamp – annual cost about £5500. As an unqualified resident none of what the 1(i)k gets is available: most things require 5 years residence, a vote requires 2 years’ continuous (to keep the seasonal workers from ever getting a vote).
It stinks. One vote for the rich and none for the poor – will nobody shame the people running this nasty corrupt little banana republic government into stepping back into line with the values of common humanity?
Somebody here should ask Comptroller Campbell how many “deals” he also does with companies. Perhaps that is also a tax scandal swept under St Helier’s carpets.
Sadly, what is being uncovered now is the opposite of transparency.
I wonder what our OECD peer review report will say?
The Girrl
My interest and concern looking forward are the numbers of new 1(i)ks Jersey is planning to welcome over the next few years and whether the same type of inequitable and unconscionable deals will be struck with them. When the Island is drowning under its own debt issues and hitting its poor and immigrant population with cuts in public spending and planned increases in GST I would be interested to know if Mr Campbell might be shamed to make the highest earners pay the going rate of 20%. Then he might be able to look himself in the mirror in the morning.
I think you’ll find these people also contribute to the Jersey economy by raising prices.
As prices rise, those businesses that are exposed to substitution are driven out of business. Ergo, crowding-out – of businesses and people; “industrial cleansing” if you like. You can literally liken the policy to fascism if you see the mechanism. However, it is highly unlikely that the guy in charge of revenues is aware of the effects of the policy, and is more likely looking at the problem right in front of his face…
Banana Republic is a little harsh, tax havens are a systemic failure of the globalisation process.
Listening to Guernsey’s Chief Minister fielding questions about the finance industry this morning, it is clear that Guernsey is in thrall to a Corporatist regime – as picked up from James #9
It always was, but the utterances of prewritten answers to benign questions such as “are we transparent” showed how ignorant the authorities are.
Basically, just because others are worse does not mean Guernsey is OK re transparent, no matter how many times the buffoon repeats the phrase.
He also stated that the large part of the IMPRESSIVE £220BN held in fund admin will be used in investment and infrastructure around the world.
Mon Dieu! If all the ‘money’ held offshore was so beneficial, how come most of the world is a worse state than ever?
If Guernsey is such a boon to the UK, how come 500,000 jobs are being gleefuly axed by the same sort of thinking as Guernsey’s CM (he said he was glad to be considered conservative!)
This net benefit to the City ignores a whole raft of obvious cons. Like “who the hell are you?”.
Don’t ask me, I only tick the boxes.
Message to Rupert. Your idiotic and contemtuous posts on the Guernser site clearly mark you out as a toy of an ideology that is falling apart around your muffled ears. Thirty years. That ain’t no civilisation. Look at how universally prosperous societies were when the emphasis was on people rather than receipts.
I forget. You made your life in that era and are happy that others cannot do.
Linking threads again, Richard Murphy has only bile for the sociopaths, you have bile about critisism of the industry you work in. History says you are on the wrong size. It won’t matter to you. You’re rich. Rich and very, very wrong about the world.
@Arnald
I decided to allow your comment – although close to the knuckle, largely because Rupert does deserve it
I edited others aimed at him
Even though he deserved them too
But please try to stay within limits
Arnald
We will have to agree to differ. We’ll see in 10 years time who was right and who was wrong. I know which one I’d be backing.
A nice surprise to learn that I’m “rich”. That’s certainly news to me so I don’t know how you would know. If you can tell me where the money is then I’d be very grateful.