{"id":14773,"date":"2012-03-23T16:32:17","date_gmt":"2012-03-23T16:32:17","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=14773"},"modified":"2012-03-23T16:32:17","modified_gmt":"2012-03-23T16:32:17","slug":"for-a-man-who-says-he-thinks-tax-evasion-is-repugnant-george-osborne-is-doing-his-utmost-to-promote-and-assist-it","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2012\/03\/23\/for-a-man-who-says-he-thinks-tax-evasion-is-repugnant-george-osborne-is-doing-his-utmost-to-promote-and-assist-it\/","title":{"rendered":"For a man who says he thinks tax evasion is repugnant George Osborne is doing his utmost to promote and assist it"},"content":{"rendered":"

George Osborne said in his budget speech this week<\/a>:<\/p>\n

I regard tax evasion and \u2014 indeed \u2014 aggressive tax avoidance \u2014 as morally repugnant.<\/p><\/blockquote>\n

I regret to say he was lying. He can challenge me if he wishes, but he'd\u00a0lose\u00a0because\u00a0the\u00a0evidence\u00a0is unambiguous and wholly in my favour. On\u00a0Tuesday\u00a0- just the day\u00a0beforehand the UK signed a deal with\u00a0Switzerland on funds held in Swiss bank accounts by tax evading UK resident people (it has to be tax evaders - those\u00a0already\u00a0declaring are not covered by the deal). Under that deal the FT notes<\/a><\/p>\n

Income and gains on the Swiss assets will be subject to the 35 per cent withholding tax levied under the EU savings tax directive. In addition, the UK will levy a \u201ctax finality payment\u201d of 13 per cent to bring the rate up to 48 per cent, in line with the initial agreement.<\/p>\n

In addition, Swiss accounts will be subject to a one-off deduction of between 19 per cent and 34 per cent of their value.<\/p><\/blockquote>\n

Now let's be clear what this means and how it works.<\/p>\n

First this applies to any funds in Switzerland where the owner tells the Swiss bank that they do not wish to advise the UK and\u00a0H M Revenue & Customs of the fact they have an account. Why\u00a0would\u00a0you do that? Only, of course,\u00a0because\u00a0you had something to hide. In the past that may have been the income earned on the account. In the future it will be the money paid into the account. Why would you hide it?\u00a0Because\u00a0you did\u00a0not\u00a0want to pay tax on it or\u00a0because\u00a0it was the proceeds of crime, of course. That is the only possible explanation. I defy anyone to suggest another that is\u00a0plausible\u00a0- and privacy is not an issue, so please don't raise it. \u00a0So, by\u00a0definition, all accounts to which this agreement applies contain criminal funds since tax evasion is a crime in the UK.\u00a0There\u00a0may be other crime to, but at the most basic level there will be the crime of tax evasion associated with such accounts or it would make no sense for anyone to take part in this\u00a0scheme.<\/p>\n

Second, although this agreement\u00a0explicitly\u00a0recognises that the Swiss banks who will now collect this tax have been for decades openly\u00a0assisting\u00a0UK tax evaders, as has of course the Swiss\u00a0government\u00a0who have created the\u00a0criminogenic\u00a0environment\u00a0in which their banks can operate (and did so deliberately in 1934 with the explicit aim of assisting tax evaders) we are now going to give them the\u00a0absolute\u00a0right to assess UK tax without\u00a0having\u00a0any\u00a0recourse\u00a0at all to check what they are doing! We are therefore\u00a0trusting\u00a0those who have\u00a0explicitly\u00a0assisted crime to collect our tax. It's hard to think up anything more bizarre!<\/p>\n

In exchange for this unauditable cash which with regard to past\u00a0payments\u00a0is\u00a0likely\u00a0to represent billions less than any\u00a0reasonable\u00a0sum owing - a process which therefore\u00a0rewards\u00a0crime\u00a0explicitly\u00a0- we\u00a0waive\u00a0the\u00a0obligation\u00a0for all who use Swiss bank accounts to ever mention the fact on their UK tax return -\u00a0which\u00a0will now be deemed complete\u00a0despite\u00a0that absence - a\u00a0previously\u00a0wholly\u00a0unprecedented\u00a0arrangement. In\u00a0other\u00a0words, these criminals are\u00a0explicitly\u00a0allowed to hide their crime and we cannot now penalise them for doing so.<\/p>\n

Third, let's be clear - the EU objected to this\u00a0explicitly\u00a0because\u00a0they said it\u00a0contravened\u00a0the\u00a0European Union Savings Tax Directive that has just one\u00a0purpose, which is the beating of tax evasion, and so the UK\u00a0built a loophole any tax abusing accountant would have been proud of into the\u00a0scheme\u00a0to aggressively avoid the\u00a0obligations\u00a0of that directive to ensure we could\u00a0explicitly\u00a0help evaders to continue with their crimes by deeming the tax the Swiss will collect to be in two parts - one an EU part and the other a UK top up. It's unbelievable that at a time when HMRC says it wants to stop\u00a0schemes\u00a0with\u00a0artificial\u00a0steps in them that it would resort to using a wholly artificial scheme to help tax evaders using Swiss\u00a0banks, and yet\u00a0that\u00a0is what they are doing.<\/p>\n

In other words - this whole scheme is designed to help tax evaders, reward tax\u00a0evaders\u00a0and\u00a0undermine\u00a0the EU's law\u00a0intended\u00a0to stop tax evaders. It's not just profoundly unethical it has to be wondered whether it is legal and ultr-vires\u00a0H M Revenue & Customs's powers to sign it. Most definitely it\u00a0helps\u00a0tax evaders is utterly morally repugnant\u00a0and yet George Osborne praised it. Which is why he's a liar.<\/p>\n

But then it has to be asked, why did he go to such effort, and why has he so\u00a0explicitly\u00a0sought to undermine EU efforts to crack down on tax evaders and the only answer can be a simple one - which is that\u00a0this\u00a0government\u00a0did this in an unholy alliance with the Swiss to\u00a0protect\u00a0their tax evasion industry\u00a0because\u00a0if that had been broken the tax evasion industries in Jersey, Guernsey, the Isle of Man, Cayman, the British Virgin Islands and so many\u00a0other\u00a0branch offices of the City of London would have been\u00a0broken\u00a0as well. So\u00a0this\u00a0support for tax evaders is not chance: the only\u00a0explanation\u00a0for this is that it is British\u00a0government\u00a0policy\u00a0to now assist tax evasion through tax havens.<\/p>\n

That's why George Osborne undoubtedly lied.<\/p>\n","protected":false},"excerpt":{"rendered":"

George Osborne said in his budget speech this week: I regard tax evasion and \u2014 indeed \u2014 aggressive tax avoidance \u2014 as morally repugnant. I
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