[Closed] Should I forgive the Labour Party?

Jambalaya - Member
opps - seem's there is a recording of Balls on BBC Radio Leeds saying in January that abolishing non-dom status would probably cost the treasury money in lost taxes.

Video: Reforming rules raises extra taxes, abolishing them probably costs money

This is a classic Ed Balls moment and yet more proof that Labour should not even be left to run a bath, let alone an economy.

Pretty daft to think about tax policy and design without considering how this relates to total tax income. Fiscal policy 101.

Still some think raising the MRP to 50% or higher is a good idea/good political trap!! Actually in the case if the latter is was good as history shows us.

As usual, all the right wingers see is the bottom line. Nothing else is worthy of consideration. They know the price of everything, and the value of nothing!

Its about living in a decent, fair society. And funnily enough, most people are more concerned about this the more the unfairness is tipped aginst them! Those nearer the top don't seem to care too much. Funny, that.

Non dom status is an archaic anomoly deliberately set up to be exploited by the rich, and is frankly morally indefensible. Don't take my word for it though, take it from a Tory....

There has also been some opposition in Conservative circles, with hostility from Richard Bacon, the senior Conservative on the Commons spending watchdog, the public accounts committee.

Bacon, at a hearing of the committee last month, complained about the non-dom system to the head of Her Majesty’s Revenue and and Customs, Edward Troup, saying under both Tory and Labour governments “you can easily spend 80% to 100% of your time in the UK because you are resident here, and be a non-dom for tax purposes.

“No wonder people are pissed off. It’s extraordinary, frankly, in all honesty. You are surprised that people think there is one set of rules for rich people and another set of rules for other people, when you have just told us exactly that is what there is.”

If this is Millibeans idea of the de-Blairification of the labour party, then about time too! Lets see if Dave will come out and mount a stirring defence of the 'moral' case for his mates (and donors) rights to pay no tax.

Can't help wondering if the govt made it a bit tougher for the big tax avoiders, if this wouldn't sort out all the budget problems and even allow a lower tax rate.

“No wonder people are pissed off. It’s extraordinary, frankly, in all honesty. You are surprised that people think there is one set of rules for rich people and another set of rules for other people, when you have just told us exactly that is what there is.”

This seems to be the understood state of affairs for many, certainly I agree with that assertion.

Right now the right-wing media propaganda seems to demand that we kick the poor, or at the very least humiliate them until they suddenly decide to simply stop being poor.

Meanwhile, central government wants to ladle additional cost onto the aspirational classes (eg Student Loans, the ever-escalating cost of owning a home, season ticket prices etc) while we're told that we actually want a low tax economy and that "freedom of choice" means paying extra for things like a health insurance, dentistry, travel, etc to the point that we seem to be creating a two-tier system dividing the population into the haves and the have-nots.

I'm rapidly becoming more and more disillusioned with it.

[quote=epicyclo said]Can't help wondering if the govt made it a bit tougher for the big tax avoiders, if this wouldn't sort out all the budget problems and even allow a lower tax rate.

Drop in the ocean.

In 2012-13 Non-doms paid £8.2 billion in UK taxes (source HMRC via Telegragph)

That's a material amount "at risk". Milliband suggested abolishing the status would raise a few hundred million - lets assume £500m - that's just 6% more than the current take. It would seem very possible the tax change will lead to a few high earners leaving meaning we are much worse off.

@epic if it was a simple as that prior governments would have addressed that issue more vigorously. IMO the biggest issue we face is corporate tax structuring which abuses the EU treaties as encouraged by Ireland and Luxembourg in particular. However even that is quite small beer, our deficit is £90bn per year.

As usual, all the right wingers see is the bottom line. Nothing else is worthy of consideration. They know the price of everything, and the value of nothing!

Or perhaps (leaving inaccurate labels aside), understand how it works in practice. You can't spend money on good causes if you don't have it in the first place. Govs don't have money. They have to raise it either though taxing people or borrowing. The ability to spend on good causes and also redistribute income/wealth is in part a function on how well the policy works - one reason why Labour only raised the MRT to 50% as a stunt.

Given that the folk you are targeting (possibly) Binners have made careers based on knowing the different between value and price, your accusation seems a little off target, mate! Funny though....

As usual, all the right wingers see is the bottom line. Nothing else is worthy of consideration. They know the price of everything, and the value of nothing!

and you can always take the governments word on this (!?!)

Three features of taxation are especially important.

First, so long as taxation affects incentives it may alter economic behaviour of consumers, producers or workers in ways that reduce economic efficiency. These effects should be taken into account
when the costs and benefits of public expenditure to be funded are being assessed.

Second, the distribution of taxation’s impact across the population raises issues of equity, or fairness, which must be given substantial weight even if it entails costs in terms of economic efficiency.

Third, [b]the practical enforceability of tax rules[/b] and the costs arising from compliance are important considerations, the more so since [b]these are both affected by, and have implications for, the efficiency and public perceptions of the fairness of tax systems[/b].

HoC Treasury Ctte, Principles of tax policy

You can't pay the bills at the NHS with "morals" - see my post above non-doms pay £8.2 billion in tax

Wheres that figure from then? And you're assuming that we'd lose all that, are you? If they actually had to pay the tax they would have to pay in any other country in the world. No other country has non-dom status. So you assume they'll all just up and leave London? Yeah, right!

To me it just sounds like more of [url= http://www.mirror.co.uk/usvsth3m/katie-hopkins-please-please-please-5408687 ]this kind of twoddle[/url]

The bankers were all meant to have decamped abroad by now, weren't they? I note we're still lumbered with the ****s though! They're not all in Frankfurt, after all! Mores the pity!

And Jim Davidson? What about him? And Mylene 'you can't buy a garage for under £2 million Klass? I thought they were off too? It'll be no different with the non doms. They'll whine and moan, because they want to have their cake, and eat it, but its all just bluster. When it atually comes down to it, they'll all stay exactly where they are.

the thought a change in non-dom is going to impact him is naive

So he is above the law and no one should care?
As a govt, and given he is a Non EU citizen we have some sway over how we treat him.Jam FWIW non dom can be passed down within families and many non doms have only ever lived here as have their parents- Surprised me that tbh They will not all up sticks as you seem to suggest.
As for Roman you seem to be both arguing he will both leave and not pay any more tax.

Pretty daft to think about tax policy and design without considering how this relates to total tax income.

The ability to spend on good causes and also redistribute income/wealth is in part a function on how well the policy works

Again I am perfectly happy with the risk [ overstated by those who oppose this, no doubt a small number will leave] that making tax fair runs the risk of some of them leaving.

ernie_lynch - Member

The Queen, Tony Blair and the Geordie say yes because they like me so I did not have to jump out from the back of a lorry.

I bet Nigel Farage wouldn't like you.

I'm not convinced that you didn't jump out from the back of a lorry anyway. Got any proof?

Yes, he might not like me but that is his problem.

😆 Now you want proof? 🙄 What sort of question is that? Are you secretly trying to be a vigilante? Anyway, if you are a left wing thinker you will not ask that question so I assume you are secretly a right wing thinker like many others, either way legal not I can vote as I have the rights to do so. 😈

Ernie are you a secret right wing thinker/militia/supporter? 😯

scotroutes - Member

No, it's not turkey voting for Xmas. It's more like creating political chaos. Many of you who keep voting for the same party is exactly like the turkey voting for Xmas IMO because you give too much power to one party believing that they can better your life. Do they or do they just look after themselves first?

Binns. the same report goes on

50. Poorly targeted policies can also create uncertainty for the tax payer. Our witnesses gave the rules for taxing non-domiciles as an example of such difficulties. Previously, non-UK domiciled individuals were taxed only on income which was generated in, or remitted to, the UK. In 2008, this was changed so that non-UK domiciled individuals were taxed on their world-wide income whether it was remitted to the UK or not. The remittance basis for non-UK income could be retained only if they made a payment of £30,000. John Dickie of London First said ‘The Government have estimated that they have raised, I think, £162 million in tax from non-domiciles paying the levy, which is 5,400 people paying it in its first year, which is below the original estimate [...].’

51. Andrew Hubbard, of RSM Tenon, and the past President of the Chartered Institute of Taxation, told us:

I think that there are 500,000 non-domiciles, probably more than that, but the vast majority of those people who are non-domiciled have no overseas income; they’re your cliché Polish plumber, all those sorts of people. People that are second generation or third generation people who are non-domiciled who may not even know it. Their tax status under the old rules wasn’t affected by the fact they were non-domiciles, because all their income was in the UK. One of the issues that comes out of this is that if you’re going to tax non-domiciles then you have to have in your mind an entire picture of what you mean by non-domiciles because the rules as they were drafted, I think, have been drafted very much in the target of high-earning international-type non-domiciles, rather than those in the UK who may have very small amounts of income abroad, or go abroad for a few weeks to help on the familyfarm over the summer.

Those people are non-domiciles and I think one of the issues around trying to define policy in all of this is to say, “Okay, when we talk about non-domiciles or a group of people, what do we mean? Who do we have in the target?” And I think that that has been potentially why we’ve had so many difficulties in that, because the mindset of
who we’re dealing with is not necessarily rooted in reality.38

52. One of the difficulties is that there is no authoritative figure for the number of nondomiciles resident in the UK nor for the sources of their income. [b]The policy may be proportionate to the high earning wealthy individuals who are often highlighted in the media (or MTB forums), but it is not simple in relation to the modest circumstances of the vast majority of non-domiciled residents in the UK who may be unaware that their small amounts of overseas income should be declared, and should be taxed—or dealt with under double taxation relief provisions.[/b] That there are exemptions for some cases does not help when individuals are not even aware that they may be caught by the rules…. [b]The charge on non-domiciled individuals is only one example of a tax whose imposition may have had unforeseen consequences. [/b]

Did anyone mention "perspective"?

Still makes good headlines....

I think that there are 500,000 non-domiciles, probably more than that, but the vast majority of those people who are non-domiciled have no overseas income; they’re your cliché Polish plumber, all those sorts of people.

So it won't effect them any way then?

But it might effect this [s]tax dodging parasite[/s] clichéd Polish plumber

[img] [/img]

or this one...

[img] [/img]

No this was more helpful

And I think that that has been potentially why we’ve had so many difficulties in that, because the mindset of who we’re dealing with is not necessarily rooted in reality

Still makes good headlines....

[quote=binners said]I think that there are 500,000 non-domiciles, probably more than that, but the vast majority of those people who are non-domiciled have no overseas income; they’re your cliché Polish plumber, all those sorts of people.
So it won't effect them any way then?
But it might effect this tax dodging parasite clichéd Polish plumber

Doubt it.

http://www.bbc.co.uk/news/10535852

http://www.zacgoldsmith.com/zac-answers-lib-dem-smears/

losing some of the £8.2Bn from non-doms is the thin end of a much bigger wedge as pretty much anyone apart from Ed Balls has likely already worked out.

If we drive some / many non-doms away, we won't just lose the annual charge for being a non-dom, we will also lose:

- the VAT on the significant discretionary spending that oligarchs and the like do in the uk. The VAT on a single £300K car purchase pays for 20 hip replacements.

- loss of employment taxes on the many staff they employ

- the loss of stamp duty on properties they will buy - remembering that properties bought through company structures now attract 15% stamp duty and an annual charge

It's very likely that even if 1/2 the non doms leave the UK for good the "loss" won't be £4Bn but will actually be many times that.

will it be retrospective?

this was in 2010

By becoming non-dom after accepting his life peerage, Ashcroft may have saved an estimated £100m in taxes.

how many hip replacements is that?

http://www.theguardian.com/business/2010/mar/06/non-dom-refugees-ashcroft

[quote=kimbers said]will it be retrospective?
this was in 2010

The year Ashcroft gave up his non-dom status.

Firstly I will repeat I think the non-dom rules need to be further reformed, like I said no tax holidays (even Labour are proposing a 3 year tax holiday - not sure why accounting for students is such an issue as they reference) and a much higher upfront payment.

@binners no we are not going to lose it all far from it but I think we could lose more than the "few hundred million" Labour think it will raise.

JY we are discussing Abramovich as he's a high profile individual clearly very wealthy.

Mylene Klass / Jim Davidson all these performers have a lot of flexibility in how they are paid, they don't pay much via PAYE so can legally avoid a lot of different taxes. The Labour donor I posted about (Wind Farm owner) who used a company loan technique to pay £60k in tax instead of £1.5m-£2m, at some stage the tax will be due but he can push it back into the future and/or repay the loan at which point no further tax is due yet he's had the use of that money. Addressing these sorts of abuses would have a far greater impact.

I have posted before about how the traders at hedge fund Brevan Howard relocated to Switzerland when tax went to 50%, all the back-office / admin staff stayed in London - so minimum disruption to businesses but big loss in tax for the UK. There are plenty of examples.

I am not advocating not taxing the rich, the 1% pay 30% of the income taxes and do so at much higher rates. The non-doms pay £8.2bn (avg roughly £70k a head) and that does not include stamp duty and VAT which I would guess are substantial. I think its far more rational to keep the non-dom status but make it more expensive and only for non UK passport holders.

Romour has it he has left the lords to reclaim it

@just 5 minutes we can all play the lets use made up figures to prove my argument but its pointless as its all supposition mixed with your own personal bias.

Have you considered a career in economics?

JY we are discussing Abramovich as he's a high profile individual clearly very wealthy.

😀 😀 (ironic)

digga - Member
Jambalaya - Member
opps - seem's there is a recording of Balls on BBC Radio Leeds saying in January that abolishing non-dom status would probably cost the treasury money in lost taxes.
Video: Reforming rules raises extra taxes, abolishing them probably costs money

Ha ha.
This is a classic Ed Balls moment and yet more proof that Labour should not even be left to run a bath, let alone an economy.

/p>

so it now turns out the torries edited out a crucial final sentence in which Balls told BBC Radio Leeds “But I think we can be tougher and we should be and we will.”

http://www.theguardian.com/politics/2015/apr/08/labour-accuses-tories-of-editing-ed-balls-non-dom-video-to-mislead-voters

will it be retrospective?

From the Guardian story link. Abolishing non-dom status would have done nothing to prevent Sir Phillip Green / Top Shop paying the £1.2bn dividend to his wife and thus avoiding £300m in UK tax.

There are 120,000 people claiming non-dom status

@kimbers the last sentence was irrelevant, the important bit was Balls said abolishing non-doms would probably be counterproductive. He knows that's the case as the last Labour government would have looked at it closely if at no other time then just before the General Election as its a headline grabbing policy.

What he was advocating is identical to my view which is to tighten up the rules and increase the payments

From the Guardian story link. Abolishing non-dom status would have done nothing to prevent Sir Phillip Green / Top Shop paying the £1.2bn dividend to his wife and thus avoiding £300m in UK tax.

Setting an angry, armed mob of disgruntled taxpayers on him the second he set foot back in the country might though. I think Ed should try that as a policy, personally 😀

just5minutes - Member

- loss of employment taxes on the many staff they employ

- the loss of stamp duty on properties they will buy - remembering that properties bought through company structures now attract 15% stamp duty and an annual charge

Why assume they'll suddenly employ no staff?

Why assume that they won't buy property (as they can still return to the UK) or for that matter that nobody else will buy the property?

so it now turns out the torries edited out a crucial final sentence in which Balls told BBC Radio Leeds “But I think we can be tougher and we should be and we will.”

Regardless of that last sentence, in January he believed that "If you abolish the whole status it will end up costing Britain money because some people will leave the country." and now apparently it will raise a lot of money.

Which is it ?

obviously all will be revealed in the final details, allthepies, im sure 😉

its funny that the best the torries could do is try and misrepresent Balls interview, they know this will cost them votes(and in some cases money to the taxman) and are panicking

[quote=kimbers said]
its funny that the best the torries could do is try and misrepresent Balls interview, they know this will cost them votes(and in some cases money to the taxman) and are panicking

They're pointing out that in Jan Balls believed one thing and is now saying another. Hardly misrepresenting him.

the last sentence was irrelevant

* both are examples of politicians just being politicians [ in different ways] and why none of us respect them.

binners - Member
As usual, all the right wingers see is the bottom line. Nothing else is worthy of consideration. They know the price of everything, and the value of nothing!

I see a bigger issue that arbitrarily assigning to others, or complying with oneself, to crass left/right ideals, just for the sake of it.

We're [i]still[/i] spending more than we earn as a nation - publicly and privately - an uncomfortable fact which even Robert Peston is sufficiently concerned to speak up about: http://www.bbc.co.uk/news/business-32203874
[i]
" in the absence of a productivity resurgence that led to a rise in the UK's earning capacity, questions would at some point be asked about the ability of the UK to repay its debts"[/i]

We're spending the money of future generations and we're generating levels of debt that could forseably trigger a run on sterling (£1,000 notes for a pint?) if we have another profligate and ill-advised government.

It's all good and well collecting ideals and morals and a good many of them we should rightly aspire to, but it is worth remembering that although we're bigger than Greece, we're not immune from anything that is happening there right now. A bit more rigour on spending would do no harm - so my friends in parts of the public sector tell me.

we're generating levels of debt that could forseably trigger a run on sterling (£1,000 notes for a pint?) if we have another profligate and ill-advised government.

Dont vote labour or pint will cost a GRAND

Whilst it is a catchy slogan it is also a little OTT.

FWIW the full quote - where he fails to warn us as you have

Now in the absence of a productivity resurgence that led to a rise in the UK's earning capacity, questions would at some point be asked about the ability of the UK to repay its debts - including government debts that rose at a rate of 5% of GDP last year and are forecast to reach a peak of 80% of GDP (the point is that when productivity is low, earnings tend to stagnate, so tax revenues are lacklustre).
At that ill-starred juncture, sterling would weaken, not because the UK economy was thought to be a little less robust than America's, but because of rather more profound anxieties about its (our) ability to pay for the standard of living we take for granted.
And as the Bank of England acknowledged in its so-called stress tests last year of UK banks, after a fall in sterling of some unspecified magnitude, the Bank's monetary policy committee would have to significantly increase interest rates - to ward off the seriously inflationary consequences of a collapsing currency.
At that point, house prices would plummet, as would the spending of households still shouldering debts that are very high by historic standards.
The UK would be back in the recessionary poo.
[b]Now for the avoidance of doubt, the probability of this kind of calamity is low, though not negligible.[/b]

I see a bigger issue that arbitrarily assigning to others, or complying with oneself, to crass left/right ideals, just for the sake of it.

Really odd that - it will be class next!! Cue Ronnie Corbett & Co....

I really don't see how it's spin to use a quotation, you can't even say its out of context.

@Northwind - you could assume they will move their staff/office to wherever they are located, they won't need such a large London property. No one is suggesting they will all go but its the marginal effect which is important, tax raised vs tax lost.

There have been far bigger tax dodges, Labour putting stamp duty up a lot but neglecting to shut the stable door in allowing people to buy using offshore companies (a technique well known and widely used around the world). For years allowing non-residents to buy/sell property without paying capital gains tax. Both these have been closed by the Tories now and stamp duty raised massively but for years these would have cost billions.

I do wonder how many buy to let landlords are not declaring rental income, I wonder if HMRC do an audit of student towns to cross reference rent declared vs number of students in the city ?

I do wonder how many buy to let landlords are not declaring rental income, I wonder if HMRC do an audit of student towns to cross reference rent declared vs number of students in the city ?

I think we probably know the answer to that one. As far as HMRC are concerned, there's probably only 2 buy-to-let landlords in the entire country.

I really don't see how it's spin to use a quotation, you can't even say its out of context.

You are probably alone in the universe, in needing it explaining to you, why omitting the last sentence is spin.

its the marginal effect which is important, tax raised vs tax lost.

[quote=Junkyard said]
You are probably alone in the universe, in needing it explaining to you, why omitting the last sentence is spin.

Add me to the list, the last sentence is not relevant. It's just qualifying the "removing nom-dom status will reduce government income" January statement with "but we think it's the right thing to do".

Now apparently, removing nom-dom status will increase government income. That's the point which is being made, in Jan it would reduce income, now it will raise income. Which statement is the correct one ?

Junkyard - lazarus

we're generating levels of debt that could forseably trigger a run on sterling (£1,000 notes for a pint?) if we have another profligate and ill-advised government.

Dont vote labour or pint will cost a GRAND

Whilst it is a catchy slogan it is also a little OTT.

Junkyard - lazarus
FWIW the full quote - where he fails to warn us as you have

Peston said:
[i]"Well, recent figures show there has already been something of a hiatus in business investment, and businesses have a habit of postponing and cancelling big investments till they are in a position to assess a government's direction."[/i] It's not only elections that hinder investment.

I very doubt I am alone in the Universe with that view, quite possibly not even in the minority 🙂

From the Telegrapgh - the non-doms pay nearly the same amount of tax as do the bottom 50% of taxpayers. With increasing personal allowance i strongly suspect the non-doms will pay more.

I guess that's one difference between you and I JY in that numbers are what matters most. As I posted you can't pay for the NHS with morals (principals). That takes actual money. We agree that it's not only the money which is why i want to see non-doms abolished and I am glad they did away with non-residents not paying capital gains tax on property for example.

You are not lynton crosby and I dont claim my £5

“The Tories have edited my words from January in an attempt to deliberately mislead people because they can’t defend their own refusal to act on tax avoidance.

“They have dropped the part of my interview where on non-domicile rules I say: ‘I think we can be tougher and we should be and we will.’ That is exactly what we have proposed – ending a situation where people permanently living in the UK year after year can claim non-domicile status to reduce their tax bills and play by different rules to everyone else.”

Why do you think the Tories eidted it there then if not to mislead?

Overstate is probably more accurate.

jambalaya - Member

you could assume they will move their staff/office to wherever they are located, they won't need such a large London property.

You can assume anything you like, doesn't mean it's true. And of course the people who contribute the most in these ways are exactly the ones with the greatest reason not to relocate.

At the end of the day, it is largely guesswork, and unsurprisingly some people's guesses are very different from others- of course, there's always lots of people ready to declare that every change will have a negative effect. The minimum wage will hurt business, policy X will cause everyone to leave, twas ever thus. What's not guesswork is that paying less tax because you're "non-domiciled" when you're simply not, is ridiculous. Removing illogic and dishonesty from our tax system is a weird thing to cause such dissent.

Switch it around. You are a domiciled taxpayer and businessman. Your next door neighbour is a non-dom, for some mysterious reason. He pays less tax than you; why? Damn it all, it's not fair! I'm going to move money offshore so I pay less tax too! We're always assured that the rich will flee the country to avoid paying more tax, or employ an army of lawyers and accountants to reduce their "tax burden"... So let's apply that logic here, what are the marginal benefits to making the system fairer and more sane?

You only provided an excerpt of the article, people need to read it themselves for the full picture

numbers are what matters most