The Panama Papers.

this is the fundamental objection to so-called “tax havens” a belief that somehow the masses are missing out. My contention is that this is not the case.

I’ll be happy for you to elaborate on that… in the meantime, I’ve just seen that John Bredenkamp was a client of Mossack Fonseca:

Bredenkamp, on the firm’s books since 1997, had been described in 2002 by a United Nations expert panel as “experienced in setting up clandestine companies and sanctions-busting operations.” In 2008, months before Mossack Fonseca cut ties, Bredenkamp was sanctioned by OFAC for allegedly being a “crony” of Zimbabwe dictator Robert Mugabe and a “well-known Mugabe insider.”

Bredenkamp did not respond to requests for comment, but he has consistently denied allegations concerning him and his companies and has denied having supported President Mugabe. In 2012, Bredenkamp successfully overturned European Union sanctions against him and his companies.

One company, Tremalt Limited, purchased equipment for armies in the Democratic Republic of Congo, the United Nations alleged. It took seven years before a Mossack Fonseca employee reported internally that an Internet search implicated a separate company the law firm said was owned by Bredenkamp “in a series of allegations concerning arms deals.”

But who am I to question the morality of such activity…

For years, the records show, Mossack Fonseca has earned money creating shell companies that have been used by suspected financiers of terrorists and war criminals in the Middle East; drug kings and queens from Mexico, Guatemala and Eastern Europe; nuclear weapons proliferators in Iran and North Korea, and arms dealers in southern Africa.

Reminds me of David Cameron’s visit to South Africa in 1989 for some reason…

Pretty clear that some of those who set the tax regimes the rest of us have to live and work in do not much care for them. Why else does the Icelandic PM have an offshore fund. Do not forget that Mossak Fonesca is by no means the only or the largest firm running such schemes.

It is the old case that some piggies are more equal than others. Fortunately, with the WWW they cannot control media and information like they used to (the peasants are learning how to read the bible for themselves) and the ways and means they can twist things are dwindling.

As others say, to the letter of the law, it is not necessarily illegal, even if it might generally be immoral. What is fairly clear though is that opaque company and bank deposit ownership certainly does offer a haven for criminals.

I did many billions in transactions with German bank offices domiciled in the old docks area of a well known EU member, all trades booked there to avoid 50% German tax rates as that specific area was designated a sort of financial free trade zone with ultra low taxes. Those same trades could have been booked in Germany or the UK but they where not (I worked for German banks for 5 years at the height of this business)

But it didn’t have anything to do with the EU, Ireland took that decision to set up the Dublin Docks unilaterally (as the UK did when Canary Wharf was created as a Enterprise Zone) and it was a fantastic one as it helped them keep their exceedingly well educated population in the country. Indeed the Germans hate Irish tax policy and wanted to get them to abolish it in exchange for a bail out (of their own investors).

Only up to 25% if you take a tax free lump sum, which is a bit of a tax anomaly.

The fund is largely tax free, they do pay some tax, the quid pro quo being the income from it is fully taxed.

Apple, Amazon, Google, Facebook etc etc could not pay the minimal taxes they do without their eu tax structures to which Junker can claim particular personal credit

Likewise these are in the gift of the individual countries nothing to do with the EU, the only thing the EU has done is failed to harmonize taxes, which most members are against.

Well said mefty

Amusing radio phone-in on this topic earlier. As one bloke put it, everyone is involved in some form of tax avoidance eg, ISAs, cycle to work right through to more morally objectionable antics and countries who use tax as a specific instrument of policy (see ^). His point was that the outrage expressed was hypocritical as it was only based on a certain level of avoidance rather than the concept itself.

Ok, so he is stretching the point somewhat. But there is more than a grain of truth here. So at what level of Wonga do we get upset? To what extent is buying a MTB for weekend use on C2W different from sheltering money in an ISA or death tax planning etc.

Whats the relevance of the rich using these schemes – the cost and effort needs to be related to the sums involved. Not worth “sheltering” small sums if the cost > benefit.

@footflaps you are mixing up the investment returns with pension income. Investment returns are tax free for the pesnion fund

Not at all. You are still taxed on the investment returns when you take it as salary when you draw down the pension. Although Gordon Brown did remove the dividend tax credit, so there is in effect some double taxation as dividends are taxed within the pension and then when you take the as income.

THM –

everyone is involved in some form of tax avoidance eg, ISAs, cycle to work right through to more morally objectionable antics

Nope. Though I do let my company pay my pension which reduces my NI by about £2.50 a month (or something). No tax benefits at all – I don’t even get childcare vouchers any more. The tax free ISA rate isn’t as good as the paying off the mortgage rate most of the time.

I even pay tax on income I don’t get – my wife’s child benefit (there are reasons for doing this).

And I do my tax return on paper to deliberately add to the handling costs (see the paying tax on money I don’t get line).

But I don’t mind ‘cos ‘we’re all in it together’, all discharging both our legal and our moral obligations to pay our way.

Sorry igm, most people.

But ? remains – what is the threshold for outrage?

£2.51

And I accept I’m unusual, in that I earn enough not to get tex credits, but with a young family and a big mortgage there ain’t much savings.

And that goes on snow and bike stuff.

what is the threshold for outrage?

The key difference, in my mind, is that ‘legitimate’ schemes such as ISAs etc are open to all and open and transparent – HMR etc can see who has what where. Whereas most of these offshore schemes are only open to a select few (mainly the rich) and are hidden.

Agreed

everyone is involved in some form of tax avoidance eg, ISAs, cycle to work right through to more morally objectionable antics

Bollocks, they are all schemes set up with the express blessing of the HMRC to provide an additional deemed benefit to society.

**** off to Panama with suitcases stuffed full of unmarked nonsequential US Dollars to buy a house in London via a holding company owned by your nieces cat and then provide you with a loan to pay for your own house payable over a million years witha payment deferral until hell freezes over doesn’t quite fall into this category.

i’d be entirely happy to do so, if i knew that people earning vastly more than i do, weren’t also paying vastly less tax than i do.

Understood but you have a misconception about that, top 1% are paying 27% of tax collected. The vast majority of people earning more than you are paying much more tax and at a higher rate than are you. For sure there are dodgers like Phillip Green whomoaid his wife a £1bn and as she’s a Monaco resident dodged £300m+ of uk tax or the Labour donor and windfarm owner I quoted,

@footflaps – agreed we need transparency. IMHO popstars and sportsmen would be the most common and highnprofile examples. I’d also startbwith a high profile investigation of super gob Russell Brand

If the world can band together to eradicate the scourge of smallpox

we can do the same with tax havens, we just need a WHO of finance

Do you reckon Russell Brand is up to his neck in arms deals?

Thank god we have Rupert Murdoch to give us hard hitting journalism and expose the real crooks in this world…

The key difference, in my mind, is that ‘legitimate’ schemes such as ISAs etc are open to all and open and transparent – HMR etc can see who has what where. Whereas most of these offshore schemes are only open to a select few (mainly the rich) and are hidden.

ok, so getting a bit more granular (and ignoring the fact that not everyone can afford to use ISAs) we still have the issue of an acceptable threshold since a lot of avoidance that gets people hot under the collar is legal.

So is it ok to pay gardener or handyman in cash up to £100 or £1000 or £10000 and save the VAT? If yes, then paying firms on bigger projects into offshore accounts so that they can quote a lower price and save you money?

Or if granny oversteps the gifting allowance to grandkids by a few £100 is that ok but sheltering £100k in a trust is not?

There has to be a point at which avoidance becomes objectionable – or is it simply the point just above the limit that “I” can afford?

http://singletrackworld.com/forum/topic/parkwood-29er-on-cycle-scheme

all ok?

Its not just about tax avoidance, its a about providing financial services to the worlds ****, even when there are clear legal restrictions.
This is UK plc’s stock and trade, and listening to the agents of these companies (our politicians) has been beyond comedy today.

So is it ok to pay gardener or handyman in cash up to £100 or £1000 or £10000 and save the VAT? If

no I cant remember when I last paid cash to any tradesman

we even pay our window cleaner online!

Its also the secrecy aspect when you have to pay a few grand to a ‘facilitator’ like the Fonseca douches you know its dodgy, whether you are hiding Columbian drug money or maximising your income to put wee dave through Eton

ok, so what is the threshold when it becomes unacceptable to avoid tax?

simple question….

jambalaya – Member

Understood but you have a misconception about that, top 1% are paying 27% of tax collected. The vast …

i’m not really talking about the 1%. There are by definition, 700,000 ‘1percenters’ in The UK. Are they all offshoring their non-dom billions through a complex arrangement of shadowy shell corporations?

no. we’re all getting dry-bummed by a few thousand people who’ve actually got all the money.

Personally never, must be because I was a good Scout or something, I looked into the cycle scheme for my commuter, but not for my proper bike -didnt use it anyway as I found a better deal at CRC (are they tax dodgers?)

ok, so what is the threshold when it becomes unacceptable to avoid tax?

Really depends on your definition of avoid. If the sole purpose of the financial vehicle / transaction method is to avoid tax then the threshold is £0. So any cash in hand is unacceptable.

If the vehicle is specifically permitted, eg an ISA, then I don’t consider that avoidance. E.g. with an ISA ‘society’ had deemed that the benefit of encouraging people to save outweighs the cost of loss of tax revenue.

THM, it’s not a £value it’s where you’re inventing spurious schemes with no other intention than minimising tax liability, this only becomes viable once you’ve got enough money to fund the scheme and that is less than the tax, could be a small number, could be a big number depends on the complexity (and proportionally the naughtiness) of the scheme.

Simple enough answer?

Sounds like you’re trying to make yourself feel better about something THM. 😉

What about a C2W bike which is purchased by someone who has one or more bikes already, with no intention of using the bike to cycle to work ?

that is a bit naughty, and plenty of people on here will say so.

although it seems the amount of moral indignation is apparently inversely proportional to the magnitude of avoidance.

dodge a hundred quid via a cheeky C2W scheme? and we all know it’s a bit naughty.

dodge a few (hundred) million? and it’s all perfectly legal, it’s complicated, you wouldn’t understand.

no I am happy with my tax issues, thanks, and have no need to feel better or otherwise. I am merely interested in the underlying assumptions behind various arguments.

FF is nice and clear. Zero tolerance. But I suspect that for many, the issue is really rather grey and the £value becomes far more of the defining issue than any underlying moral logic.

Could be wrong, as FF notes, hence the question to see what people think is the moral threshold.

What about a C2W bike which is purchased by someone who has one or more bikes already, with no intention of using the bike to cycle to work

You’d have to look at the rules (which I haven’t). Are you actually required to cycle to work, I suspect not.

NB I’ve already got a shed full of bikes, so never bothered with it myself.

Are you actually required to cycle to work, I suspect not.

Used mainly for – so yes

Really, I though you were just baiting someone to provide you with a number so you could jump down their necks.

That 20mile commute on a DH rig* will really improve my fitness – if my company ever introduce C2W.

*actually I keep looking at London Roads in that fluo green.

dangerous to jump to conclusions stabiliser!!

But its an important question, that rarely gets answered.

anyway more fun watching the hypocrisy of our and other representatives being exposed!!

Looks like it will cost the Icelandic PM his job.

I see some classic diversion tactics are going on here…I think I can even hear some squirming of bums in seats….yes you know who you are… 😉

You’re not suggesting Jamba is a friend of Panama?

I simply can’t believe it.

the rich victimising the poor, re-enforces their position in society

http://www.iflscience.com/plants-and-animals/human-sacrifice-may-have-played-role-evolution-modern-societies

PM of Iceland has quit.
Our PMs lucky he doesn’t have any shares (in his name) in his dad’s company that spent 30 years avoiding UK tax….

Interesting article kimbers, ta.

Although stripping it back to the numbers, not surprising to see that more egalitarian societies were less OK with choosing people to kill.

Are any of you buggers going to join/fund the Tax Justice Network, Oxfam, Transparency International or any of the other groups who have been criticising offshore companies for donkeys?

I don’t know. Does it involve signing an Internet petition?

Dave’s going to have stacks of credibility at the combating tax avoidance conference he’s hosting in May.

As my gran would have said: ‘his face’d stand clogging’.

The Icelandic PM didn’t get to pass it off as ‘a private matter’ then?

Are any of you buggers going to join/fund the Tax Justice Network, Oxfam, Transparency International or any of the other groups who have been criticising offshore companies for donkeys?

Some of us have been for years…..

The Icelandic PM didn’t get to pass it off as ‘a private matter’ then?

Only thanks to a much more involved public though (and hats off to them). No pictures of 1000s marching in Downing Street chanting “tax dodger’s sons out”, which is a shame. Not that you’d find a single Tory who wasn’t up to something illicit to replace him with.

One imagines since we found out Dave **** a pig and now that Daddy’s been doing business in the transparent, ethically pure democracy that is Panama, he’s suddenly quite keen on the idea of privacy.