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Paradise Papers lost in a fog of tax avoidance

Terry smiling headWe have had a week of revelations, shock and scandal like no other and a series of ministerial resignations to top it all.

Moral outrage and indignation has gripped the nation with every touch of a knee to calls for royal heads to roll. Sex and money certainly sells and perhaps the two really do lie at the root of all evil.

The so-called Paradise Papers have even been given a glamorous name. It may be a reference to the sun-kissed islands where much of the ‘murky’ money-concealing habits of the filthy rich takes place, but it also adds a bit of spice to the drudgery of wading through 13.4 million financial documents.

What they tell us is that a lot of wealthy people are taking advantage of legitimate tax loopholes to minimise their liabilities. It more or less begins and ends there. No one has been found the least bit guilty of any wrong-doing.

That, of course, has not stopped the excitable BBC from deserting its traditional composure and promoting its treasure trove as a major revelation that has shocked the nation. Sorry, the world.

The best that can be said of these “revelations” is that they expose an underlying greed on the part of those who, it is felt, ought to paying more, particularly to fund the salaries of nurses and firemen.

But the flip side of this argument is that if they paid more tax they would have less disposable income to spend on other things that keep the economy going, including indulgences such as luxury hotels, fast cars, private jets and expensive perfume, which also provide jobs, often for lower paid people. This was conveniently ignored.

The papers edged into sightly dodgy territory of their own when the Queen’s money advisers at the Duchy of Lancaster were found to have squirrelled away £10m in the British Overseas Territories of Cayman Islands and Bermuda. The Palace retorted that all of its investments had been fully audited and legitimate and that, far from denying tax income to pay for hospitals and schools, the Queen voluntarily pays tax on any income she receives from the Duchy.

In the absence of any signs of criminality, the International Consortium of Investigative Journalists (we need an investigation into why this seems to be an exclusive club) has exposed the rich for being…er ..rich…and for having enough money to employ some very clever people to find ways of keeping the taxman at bay.

The real culprits in this story are not rich businessmen, pampered members of the royalty, or playboy racing drivers. If the global tax system is rotten to the core then fingers should be pointing instead at governments around the world who have been acquiescent in allowing these loopholes to exist.

No wonder the world is awash with tax advisers, financial planners and solutions companies all ready to have a word in your ear about how to retain more of the money you earn.

And it’s not just the superyacht class who are “at it”. We are all encouraged to seek tax relief, whether through ISAs, pensions, small business bonus schemes or dividend payments.

Let’s face it, tax avoidance is one of the biggest and most complicated industries in the world. That’s why governments don’t stand much of a chance bringing an end to it.

 

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