TUC's spoof guide to hitting 'wealthy tax dodgers' is ill-informed and misleading, says Miles Dean
THE TUC’s SPOOF GUIDE to tax dodging is no more than inflammatory, ill-informed, misleading sabre-rattling ahead of the annual TUC Annual Congress. The call for loop-holes to be shut down and the perennial targets – non-domiciles – is tiresome and old-hat.
HM Revenue and Customs and the government have taken extensive steps in recent times to address the perceived anomalies in law afforded to non-domiciles. The effect of this has been to render the United Kingdom less attractive to wealthy foreigners, entrepreneurs and job creators. Attracting such individuals is something that many countries around the world consider beneficial.
The global tax market is very competitive: look at Spain, the Netherlands, Canada, Ireland, Switzerland – they all have inpatriate tax regimes of one sort or another. The UK would do well to keep the non-domicile rules as they are, albeit watered down and less beneficial as they once were but nonetheless extremely complex and subject to an annual levy.
As regards loop-holes, perhaps the TUC is not aware of DOTAS or the very wide-ranging and complex body of anti-avoidance provisions that make up the statute book. Perhaps it isn’t aware of the General Anti-Avoidance Rule that is set to be introduced or the fact that HMRC have won various high-profile tax cases in recent times.
If the TUC wants to be taken seriously, it should specify which of the loop-holes it is referring to with recommendations of how it believes the tax system should be amended.
The UK’s tax system is based on common law, i.e. statute and case law live hand in hand and evolve over time. Every person has a right to structure their affairs in the most tax-efficient way possible. According to the TUC, this should be thrown out of the window and we should all pay as much as possible.
In times of austerity, it is easy to pick tax out as being the solution to our financial woes, that the rich must pay more to kickstart the economy and get us out the mess we’re in. This isn’t the case and the sooner the TUC, Nick Clegg and the government realise this, the better.
Miles Dean is founder of Milestone International Tax Partners