Unless you’ve been hiding away on a remote island somewhere this week (perhaps counting your tax savings!), you’ll doubtless have seen all of the news coverage about the ‘paradise papers’. These are leaked documents detailing the financial activities of various public figures, principally their use of so-called tax havens. It’s a poor description when, in truth they are simply low tax rate regimes – not a ‘haven’ for taxes!
So what struck me as odd is that no-one in the media has asked two searching questions:
Who amongst us volunteers to pay more tax over and above our legal obligations, properly accounted for according to the law?
Why doesn’t the media investigate how governments waste huge quantities of the tax they gather?
I know it’s a controversial subject and opinions will be split, but mine is that once I’ve paid what I’m legally bound to pay the rest is mine to invest as I choose. I use the NHS, I’ve benefited from the provision of the emergency services, I was educated in a state school and I don’t expect not to contribute to the amenities that make this country such a desirable place to live. But, neither do I expect to pay beyond my legal obligation.
So what’s the issue?
Well, it seems to me that it boils down to a “moral” argument about rich people and successful businesses somehow not sharing enough of their success with, well, people who are less successful through those well-known paragons of financial virtue – national governments!
What about tax avoidance and tax evasion? The way Panorama and other news media reported the “leak” they made it sound like taxes were being “avoided” and, maybe, evaded. Classically, tax avoidance is tax reduction. But evasion, well that’s fraud which is both wrong and foolish.
Tax evasion is usually unreported income (and therefore unpaid tax), while tax avoidance is the legal application of tax laws to reduce your tax burden and take advantage of the flexibility within the rules. There are shades of tax avoidance while tax evasion is black and white.
Most of us are brought up to believe in and cherish the rule of law. We understand that laws are there to protect the majority and most of us believe in “right and wrong”. So why should it be wrong to save cash by using entirely lawful tax structures? Is it the politics of envy?
What saddens me most is the exploitation of ignorance. The vast majority of people hearing about the Paradise Papers pay tax through “auto taxation”, in other words PAYE. They have no choice about how their tax is paid and mostly live up to their cash income. They can’t use “tax havens” but don’t have the spare cash to shelter anyway. More importantly, why would they have any clue as to the purpose and benefit of low tax regimes around the world? Then the likes of Panorama step in and make it sound like organisations like Apple – who employ tens of thousands of people, pay more tax than any other corporate body in the world across the globe – are not much better than fraudsters!
Then the politicians wade in claiming “loss of tax revenue” from entirely legal enterprises! Just to be clear where I stand; I loath and detest Jeremy Corbyn and John McDonald. They are both died in the wool socialists, near communists, masquerading in suits with a PR machine. When you dig deeper, their brand of financial planning is from the big book of Toy Town Economics
I’m equally scathing of some of the machinations of our current Government; for example, their steady destruction of the private rented sector is bordering on criminal, not to mention their attempted tax raid on the self-employed.
So, where does that leave us on “tax havens”?
The regulatory innovations and opportunities afforded by low rate jurisdictions are complex and you need full and detailed knowledge to navigate through the systems. Perhaps this is what causes the opacity; few truly understand how it all works. It’s important to repeat; none of this activity is illegal.
So, at The Business Buyers Club we aim to educate not pontificate.
We don’t practice the politics of envy, we practice the art of achieving financial freedom.
In the pursuit of that goal, we explain and educate our Members on the role of both onshore and offshore tax mitigation structures. We give you the choice to decide whether to protect your family with trusts. I think it’s important that members know all the options so that they can make informed decisions about their own funds.
I’ll be keeping a close eye on this story as it progresses. Politically it’s already stirring the hornets from their nest, all keen to add their own sting to the developing debate. One thing’s for sure though; until there is a major change in the law regarding offshore tax havens those who can will continue to use them and rightly so. They are actually a hidden force for global good, allowing many funds to be used around the globe for investments in new industries, technologies and future employment as old industries die off in the face of AI and robotics, for example.
I run regular workshops where you can come and learn more about how to become financially free through acquiring businesses. During the workshop I explain about the proper role and application of offshore structures and locations as well as all the other crucial elements of my business buying process. So come and get educated.
Questions before booking? Simply message us through our Facebook page here or call 0161 883 1829.