Tax Havens
Lord Fink, the Conservative Party Treasurer, has called for the UK to relax its tax laws so as to better compete with tax havens.
Meanwhile, 68 MPs and Peers were recently found to be directors on companies that operate out of tax havens. These are people who influence tax law.
What could the government do about tax laws? Is there a one-stop solution to tax evasion and/or avoidance?
Should we do anything at all?
I don't claim any expert knowledge of tax law. I'm hoping this thread might educate me.
Meanwhile, 68 MPs and Peers were recently found to be directors on companies that operate out of tax havens. These are people who influence tax law.
What could the government do about tax laws? Is there a one-stop solution to tax evasion and/or avoidance?
Should we do anything at all?
I don't claim any expert knowledge of tax law. I'm hoping this thread might educate me.
There is nothing we can realistically to close tax havens, people make it out as if tax havens are some kind of loophole but in reality the are independent countries, the only thing that we could theoretically do is limit peoples right to free movement which would be ridiculous.
Lower income taxes would persuade more people to stay and possibly lead to an in-sourcing of jobs but what about MUHH BENEFITS.
Lower income taxes would persuade more people to stay and possibly lead to an in-sourcing of jobs but what about MUHH BENEFITS.
Original post by pr0view
There is nothing we can realistically to close tax havens, people make it out as if tax havens are some kind of loophole but in reality the are independent countries, the only thing that we could theoretically do is limit peoples right to free movement which would be ridiculous.
Lower income taxes would persuade more people to stay and possibly lead to an in-sourcing of jobs but what about MUHH BENEFITS.
Lower income taxes would persuade more people to stay and possibly lead to an in-sourcing of jobs but what about MUHH BENEFITS.
This is true, but surely there could be some mechanism to recover tax revenue on money earnt in the UK.
If a company has large operations in the UK, but it has a token office registered in a tax haven, why should its tax contribution be different to if their office is registered in London?
The irony of what he said was that he wanted taxes on "invisible" income to be lowered. Not the everyday workers, who pays their taxes through the PAYE system, but the people who make large incomes from businesses, investments and god knows what else.
We're all in it together... Unless your a millionaire tory donor, then your out of the tax system.
We're all in it together... Unless your a millionaire tory donor, then your out of the tax system.
Original post by zeropoint
This is true, but surely there could be some mechanism to recover tax revenue on money earnt in the UK.
If a company has large operations in the UK, but it has a token office registered in a tax haven, why should its tax contribution be different to if their office is registered in London?
If a company has large operations in the UK, but it has a token office registered in a tax haven, why should its tax contribution be different to if their office is registered in London?
They don't really tax the wealth that is generated but more the profits or income that someone earns. And if that person or corporation is resident or registered elsewhere on paper it wouldn't be right to tax them. It would be like the UK government trying to tax French residents or corporations.
The only thing I could think of would be if consumers made it very unfavourable to be based in tax havens e.g. if there were mass boycotts of companies who tried to relocate to tax havens so that loss of profit due to boycotts was more costly that tax.
Really it seems wrong but it reality it is no different than any other company who is based out of the UK but does business here, however no one claims it is lost tax revenue.
Technically parliament could enact a law saying essentially that any business (even multi-national) which operates in the UK must pay tax in the UK.
The problems here are two fold however..
1) As a member of the EU we would have to exempt EU nations and Luxembourg has a corporation tax rate of about 5%
2) It is essentially a bet that operating in the mature UK market outweighs a 20% tax cut and the likely result would be that multi-nationals would simply have UK subsidiaries so that rather than taxing HSBC's £9bn profit we end up taxing only the UK profit from the subsidiary
The same problem exists for income tax as well, the rich would just go elsewhere.
Essentially if we were to do this not only would investment fall but only taxing the subsidiaries would mean we get nowhere near the amount that is banged around right now and we would have to leave the UK to do it.
The problems here are two fold however..
1) As a member of the EU we would have to exempt EU nations and Luxembourg has a corporation tax rate of about 5%
2) It is essentially a bet that operating in the mature UK market outweighs a 20% tax cut and the likely result would be that multi-nationals would simply have UK subsidiaries so that rather than taxing HSBC's £9bn profit we end up taxing only the UK profit from the subsidiary
The same problem exists for income tax as well, the rich would just go elsewhere.
Essentially if we were to do this not only would investment fall but only taxing the subsidiaries would mean we get nowhere near the amount that is banged around right now and we would have to leave the UK to do it.
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