The Great British Tax Swindle
If you think that the UK Government's raid on the Swiss bank accounts of the rich shows we're all in this together, guess again.
On the face of it, the news that the UK Government is to net between £3bn and £5bn in tax from money stashed in Swiss bank accounts is a welcome bonus when money is tight all round. Scratch a little deeper, however, and you'll see that it is a terrible deal for the legitimate taxpayer.
Lets look at the figures. One accountant, Ronnie Ludwig of Saffery Champness estimates that as much as £214bn is in those Swiss bank accounts, and that the total tax bill should be £107bn, not £3bn - which is an effective tax rate of just 3%.
Richard Murphy of Tax Research UK explores the numbers further and thinks at least 80% of the money in the accounts is due.
The deal has drawn criticism - most notably, perhaps from the charity sector. Christian Aid Director Loretta Minghella said,
"We fear that the agreement will be soft on the Britons who have illegally hidden billions in the Alpine tax haven ..."
If you are a builder who does some cash in hand work without declaring it and HM Revenue & Customs (HMRC) finds out, the penalties are severe, including a possible stint in jail and a maximum penalty of 100% of the tax owed. We're not condoning small scale tax evasion either - but the contrast is stark.
Just as the US Government is mesmerised by Wall Street and is prepared to take a sop and overlook criminal fraud by its major banking institutions, so the UK Government remains in thrall to the wealthy and is prepared to legitimise tax evasion.
UK Government's have form in this area. In 2008, the then Labour Government agreed a tax amnesty with Liechtenstein so that tax contributions were capped at just 10%.
The worst outcome of the Swiss deal that it encourages people to move money to these bank accounts in the future - this is no longer criminal tax evasion, but legitimate non-criminal tax avoidance for the wealthy.
What sort of message does that send to the London rioter who was jailed for six months for stealing a bottle of water?
Comments
"This sums up the thinking behind the riots so called. We all seem to know that something fishy is going on, but don't know where and to what extent...this sort of highlights some areas, but it also gives valid reasons why we should all be rioting in the streets. Its where the money is, and we're looking for it! Thanks for that!"
"It stinks.. one jailed 6mths for stealing water another I believe jailed 6mths for reciving stolen goods and i believe evicted from their house.. why aren't there any rules for rich that con the public and steal millions? albeit some do it via tax evasion. joe public are jailed for tax evasion BUT it appears one rule for joe and another for the rich."
"taxes are for the little people."
