Paradise Papers
 

So I thought i’d put it out there, especially as Lewis Hamilton is implicated, the topic is now car related!

The question I have been asking myself is whether i’d do the same? If I carried a huge personal wealth, would I be open to a creative, legal way of keeping as much of it as I could.

At first, Yes, I think I would.

But then I think to have so much wealth I would have to be great at whatever it is I do and greatness is not just measured in coin but also the way you conduct yourself.

Maybe i’ll stay as I am for a while! Although it would be nice to have a bit more disposable income to help pay garages to find an elusive engine rattle in my 8 year old S8!

Provided it's legal I see no problem with it. I think that most people in a similar situation would do what they can to protect their wealth, I know I do what I can to avoid paying more tax than I need to including owning a V8 pre 2001 tax change!

What Lewis has done sounds a little risky from what I've seen, the personal use side might catch him out.

This leak is just one example of how selfish we've become as a society over the last thirty years, post-Thatcher. It's rare these days - almost unheard of - for people to publicly talk about the value of supporting others or of society in general.

So we get stuff like this, where the default behaviour of individuals and organisations in our society is self-centred greed and avoiding paying one's fair share for the effective functioning and improvement of society. Not good, and not sustainable in the long run.

I thought the exact same thing, if you an afford a private jet do you really need to rip off the VAT and if you do need to maybe you can't actually afford the jet in the first place. But then it won't have been him personally would it, the legal team and accountants would have sorted all that out. But then as I was reminded by HMRC my TAX is my responsibility no matter who made the mistakes.
I was an absolute wreck over 8.5k and they chased me for it, hard, to the point my business was almost folded as I just couldn't pay it. I just couldn't work out then why they were so willing to bankrupt my little business when Google, Amazon, Starbucks, Vision Express, Mcdonalds and the likes are ok not to pay theirs.

Shame really when there is people that can't even get clean drinking water and then we have the rich clinging on to as much of their wealth as possible. The money is there it's just being held on to by people that will never spend it.

I'm no expert but even I would know something wasn't quite right if I had money going through the Cayman Islands or similar. You know you're hiding something. So if you take the risk then you might get stung eh?

Could be some differing opinions on this one I reckon.

Though I'm not sure business jets are a good example as almost all aircraft are leased and people/companies just pay for use.

No idea if LH's jet for example is hired out for other people or retained for his personal use only, but if he uses it for private-only (non-business) activities then there's presumably a formula to follow re payments for use, taxes, etc. and his advisers should be dealing with that.

Does anyone even know where he's domiciled, don't think he's UK-based any more?

Top comment and well said. My thoughts exactly.

Just to add, I think the famous people outed in this latest leak (Hamilton, Bono et al.) have been thrown to the wolves by the press, just like Jimmy Carr was a few years back. Where as the likes of Apple sitting on $252 billion in untaxed offshore cash by exploiting Jersey's tax system is the biggest story here.... Corporation Tax Avoidance!! It's sad big global corporations don't pay their equal share to society. It may be fully legal, but where's the ethics? Say what you want about the EU, they are focused on the citizen rather than big business and are trying to implement a Europe wide corporation tax and putting an end to all the double Irish Dutch sandwich loopholes.

I think he's in Monaco well was anyway.

Yup, lives in the same building as Nico Rosberg believe it or not.

If you are an international sportsman you have income from various avenue streams and have to balance tax accordingly, he will have a team that will be in charge of where the money goes and it will be a legal process, however, for people like us it doesn't make sense. Compared to normal people L/H must haemorrhage money in taxes across various countries.

Not saying he is living a hard life but in his shoes I think we would all do the same. I don't begrudge him for it.

I know I get stung on tax and vat and pay my bills accordingly, doesn't mean I agree with HMRC as they screw people and small companies like myself over left, right and centre while the big ones get away with it. No way of changing it really so fair play if individuals can save their money.

As for the comments about getting clean water. All of us could be more charitable and help the poor more. Who needs more than one car? several of us have more than one car, what about selling a car and donating that money to a clean water charity?

Thought as much

I dont think anyone minds tax minimisation but many of these schemes, whilst "legal", are intended to let people escape tax altogether. e.g. getting paid into offshore trusts which allow you as an "adviser" or "consultant" to say how that untaxed trust money is to be spent - which turns out to be, funny enough, on their house, car, boat, plane and day to day living expenses :rolleyes: .

How many of us work for employers that use Salary Sacrifice? Perfectly legal and very common practice, that effectively reduces the amount of tax/NI we pay. If it's available and legal it will be done!
The morals of this however is a debate sure to go on until I can afford my own private island as a tax haven.

and therein lies the rub !!! :rolleyes:

Yep, Legality v Morality.

Dead right - it's no coincidence that many of these loophole jurisdictions are UK-dependent territories that are exploited by either UK/US corporations or wealthy individual or businesses from outside Europe. In the main, attitudes in major European countries (i.e. not Lichtenstein/Monaco ;)) to this sort of behaviour are far less tolerant, and quite rightly so.

A very interesting topic of discussion, with some excellent comments and some things that I can relate to.

I've noticed this lack of support through instances with my nephew. Since he was a teenager, he's been working on building sites. Just over a year ago, he decided he would go out on his own, and the reaction from his peers was... hatred. He was clearing a large farm site and one of the building had asbestos roofing. He had gone through all the proper training and got the qualifications for removing it. Literally a day after completing it, someone reported him for dumping asbestos. The site was sealed off while a detailed inspection of all the land was carried out.

Another less serious incident, but still shows the mentality of people. His cousin also works on a building site, driving a teleporter. Most of drive around in battered old cars full of tools and all the crap of the day in them. He meanwhile scrimped and saved, and bought himself a fairly new Merc. Nothing flash, but still a significant change. All he got from his 'friends' has been nothing but criticism.

As tintin said, no one seems to care about anyone but themselves anymore.

So far as being more charitable, I think it's the multi-national companies raking in billions that need to be more charitable. I reckon the man in the street, or the man with two cars already does enough for charities, except they don't do it for the advertising or the tax deductions they can get. Most of us on here have worked our nuts off to buy the cars we drive, even if they are 10 or more years old. I know I'd like a D4 S8, but chances are that I won't be able to afford one for another 10 years.

The drinking water is a good example. There have many ads on TV asking for donations to provide clean drinking waters to people in developing countries, and it's the man in the street that does the donating. Contrast that to what the chairman of Nestle said when he proposed that all water should be privatised. A basic human right that everyone needs to survive, and we have a company with a turnover of 65 billion dollars that wants to privatise water, so they can sell it to you in a bottle.

Exactly, the same government that hunts you down for every penny you owe them, no matter what the outcome to you, whilst at the same time allowing companies like Google, Amazon, Starbucks and the like to make billions, and not pay any tax at all. I've even read somewhere of some of these companies receiving tax refunds.

An example I just read about last night, which I've heard of similar circumstances before, and also one that I've been at the wrong end of, the thorny issue of child support. In this instance, we had a father who was paying child support, but for whatever reason, he fell behind in his payment. The result, he received a letter demanding immediate payment... of 5cents. That's roughly 2p for us.

We live in a society controlled by greed. Greed whereby governments impose tax after tax on those less able to afford it, whilst grovelling to the multi-nationals and offering them incentives to set up shop here. And when questioned about it, they talk about how much revenue comes into the country as a result and how much better off the country is as a result. I don't know about anyone else, but I haven't seen any prosperity brought about by not taxing those who can afford it.

Apologies if my response is a little 'heated', but it's one of those things that gets to me.

The hypocrisy of Bono, the odious worm, can't be a surprise to any of us but some news articles are painting a picture of the Queen sitting with her calculator working out where she can save a few per cent here and there which is ridiculous, of course she hasn't had personal involvement in this. In fact I think I'm right in saying that the Duchy of Lancaster is not subject to tax anyway but has voluntarily paid capital gains tax and since the early 90s, although sometimes a pitiful amount.

As for Lewis' jet, his company (registered in BVI) bought it for just under $27m in 2012. Thanks to the leak, we know that Appleby formed a VAT-registered leasing business on the Isle of Man for Lewis. That company leased the jet from the BVI-registered company and imported it to the Isle of Man. It was then leased again to a UK jet management company that provided Lewis with a crew - and which leased it back to Lewis and his Guernsey company, BRV Limited. All these transactions are seen as 'commercial' so they are eligable for a 100% VAT refund when the jet lands in the Isle of Man. The VAT bill in this case was £3.3m, paid on Lewis' behalf by an Isle of Man accountancy firm. So when the aircraft landed, the customs official simply skipped out the terminal and stamped a VAT-paid form to be kept on board the plane. This grants the plane “full and free circulation” throughout the EU. As soon as the VAT form is stamped, the plane can fly out.

Leasing documents in the leak show that Lewis' Guernsey company, BRV Limited, expected to use the plane two-thirds of the time, with him signed up personally to use the other third. EU and UK VAT rules state that refunds should not be granted in relation to private use of aircraft – but Lewis got a full refund because of the above web of companies and transactions. Companies that simply use planes for business are entitled to a VAT refund, but private individuals are not.

Morally wrong to most of us but all legitimate. As soon as one loophole closes, a decent tax planner will find another mysterious loophole to make the most of. You have to ask yourself, if you were an ultra high earner with £millions of assets, would you do the same? I know I would.

The rub won't be solved until every country agrees to the same rules. So in reality it's never going to stop and there will be undercutting until it's a race to the bottom. It's unsustainable and a country costs X to maintain all the services. Or do we want a country with no state services or benefits, no safety net for the ill, unemployed, no maternity leave, where it's dog eat dog and everything is PAYG. Personally I feel that makes for a poorer society with such inequalities.

Having lived there, I think that place is called the USA.....

Quote from Mel Stride (Conservative Treasury Minister) on C4 news this evening: "Tax should be due where the economic activity takes place" - a pretty simple principle: it's just a pity that the UK and US governments don't apply this principle seriously, due to the influence and lobbying by businesses that stops this.

And that's what will divide this debate. Even on my (now ceased) relatively insignificant income, I paid my taxes through PAYE and donated and raised significant sums for many charities. If I were exceptionally wealthy, of course I would look after my family first, but this level of wealth and greed, IMHO, is a moral disgrace. So, no, I would not behave in a similar manner. Why would you want to cheat less fortunate people from basic health, education and a very basic standard of living in order to maximise a level of wealth that is very difficult to imagine (and difficult to spend!).

A whole load of things used to be legal: slavery; raping your wife; burning so called witches; apartheid. Legality is no guide to morality. These super-rich people are bleeding our civilisation and the rape of the working classes will, ultimately, lead to its decline.

+1.

That's the country we all came from pre 19th century.
Crazy capitalism, and you'll all be brainwashed to believe it's in your best interests!
Yet people continue to "Union Bash"... Ironic!

Back to topic:
There's no news here, just what wealthy people have been doing for decades. I remember similar news about Nigel Mansel 20 years ago.
Many of the loopholes they use have been created either by small countries to attract wealthy people and business (Monaco, Isle Of Man, Canary Islands) or by larger countries for the exploitation of those who created them and their mates.

My mate who is a financial planner and did a minor in accountancy has told me about tax rules that only exist for those above certain wealth thresholds. You have to ask why they have done that...

The thing is, above a certain threshold people are mostly very mobile so don't actually live, or earn, in any one country.

Thinking about Lewis Hamilton for example, he genuinely works all over the world and hasn't been a UK resident for many years. I would hope (and expect) that he pays his fair share of tax on income earned here (and in other countries he works in), but if he has a plane "registered" in the IOM so what, he's not a UK resident.

People/companies that are wholly or mainly based/trade in one jurisdiction are another matter entirely. :tuttut:

+++ you're better with words than I am Jim

It's not the TAX that's an issue I'm sure he pays a lot of it. But it's the 100% of the VAT claimed back through the legal loophole even though he was planning to use it a 3rd of the time. That's wrong. No different that using a company car for private use and then making out it was all business use.

Who knows, where he lives/works are the rules the all same? (we know they are not) Maybe he pays tax in some jurisdictions where private/business use of others assets isn't distinguished? If he was a full-time UK resident then it would probably be seen as "dodgy" but in an international context it's not so easy. :cool:

It's the VAT on the purchase of the plane which was refunded, so presumably (I've not seen enough to know) VAT is paid by Lewis or other users on the usage when leasing it.

Wealthy individuals and businesses will always look for the most tax efficient way to manage finances. It's nothing new and is often reported, it may not be morally right and that's where businesses should have a good code of conduct/ethics, customers can always vote with their money. As for individuals, we are probably talking about the 0.01%, I'm not all that interested in how they conduct their private affairs to be honest and quite often they do a lot of charity work and help raise awareness of other issues anyway.

Imagine a world where all the nations got together and agreed a uniform and universally applied set of taxes.
Sounds great, sounds fair, sounds morally correct.

If this ever happened we'd be screwed, with taxes shooting up and up. An explosion of bureaucrats consuming ever more, while the dwindling number of productive people are taxed into oblivion.

Of course there are differences between national tax systems. And these differences are an opportunity used by those of wealth, to minimise the taxes they pay. Morally questionable I agree. But they and their schemes are the price we pay for some kind of tax competitiveness that keeps our respective governments in check.

If you don't believe how voracious government is, just look at the national debts. What they can't get in taxes they happily borrow at the expense of generations to come. Now that is what I call immoral.

Why? There's no reason logical reason why that should happen: the idea that unfettered capitalism - where global megacorporations play one nation against another and have "democratic" governments in their pockets through lobbying and paying for votes and thus avoiding taxes - is a more efficient way of running society is fast coming apart at the seams.

This country is the fifth biggest economy in the world, and yet, in the city I call home, 1 in 150 people are homeless. It's about time that the trillions* stashed in offshore jurisdictions were reclaimed and used to support the people that governments are meant to represent, not those who lined their pockets.

* https://www.oxfamamerica.org/press/t...lion-offshore/

Governmental debt is quite different to a personal loan / mortgage / house hold budget as we know. Governments don’t really pay back the debt. They just roll it over. Economic growth should reduce the percentage of debt to GDP, making previous borrowings increasingly less significant. It's a tool used by Governments all over. The young and future generations are actually paying the price due to austerity. Austerity does not produce strong economic growth and we have a lost generation due to it. If you have falling private spending and wealth and falling government spending the recession is more serious and longer. Governmental debt is a way of employing under-employed resources in a recession and help the economy to recover.

Here, here. It's disgusting the way governments treat their own people. A quick search talks about 120,000 homeless children by Christmas, over 7,000 homeless service(wo)men [shows how much the government really cares], and families going into emergency B&Bs up 18% this year.

That sounds a little like communism to me and I'm not sure we would want to go there! Would it not be better if people didn't feel the need to take their wealth away from the country and could instead invest it locally? Perhaps the whole tax system should be changed rather than just adding new parts to try and cover loopholes and thereby creating new ones?

Well said. Taking money off people is what drives it offshore. Creating a less avaricious tax system will attract/keep it here, where it can work for us all.

National debt is not free. Approx £30 billion paid in interest by the UK in 2015. Austerity is part the result of the government trying (and failing) to reduce, not the debt, but the amount by which the national debt is growing year on year.
This debt is not a benign thing that will simply diminish. It is effectively another tax on every person in the UK. And it will increasingly be so for generations yet unborn.

LOL, you seriously think the UK tax system is greedy? The UK enjoys among the lowest personal tax rates of advanced countries, and high earners on £100k+ see less of their income taken in tax than almost anywhere else in Europe. Corporation tax is 19%, with the EU28 average at 22.5% and notably France 33% and Germany 29%. With comparability low tax people and corporations still feel the need to hide it offshore. Are you advocating we should become the tax haven Miss May suggests and threatens the EU with after we leave? Even after the Paradise Papers leaks our government is still trying to water down anti-tax haven measures...

http://www.independent.co.uk/news/uk...-a8043881.html

So our Government is cutting services left right and centre, while they can not be bothered to collect the tax on money hidden in offshore havens by closing these loophole. You have to ask yourself who the Government is serving.

I don't think it, I know it. I remember super tax, selective employment tax and many other ultimately counter productive government grabs at peoples money.
It is easy to say this or that tax loophole should be blocked, but history tells us it is not that simple. Block one hole and another opens. It is worth remembering that people using these schemes to avoid tax are often not breaking the law.

If becoming a tax haven can achieve something like the standard of living the Swiss enjoy, then do it. I happen to like prosperity

Unfortunately, things are always more complicated than at first glance. The Swiss do not have a happy history when it comes to their banking sector and the "benefits" it offers as their conduct during WW2 shows.
What is the price of prosperity?

A brief explanation of Paradise Papers

https://youtu.be/8N7gljqsIKc

I received a letter from HMRC last week stating that during the tax year of 2016/17 I'd underpaid....by 40p

Needless to say, I spoke with my accountants immediately

They're relentless on the common man but don't seem to pursue the privileged with the same enthusiasm, funny that.

Perhaps you should start taking the Head of HMRC to dinner at the Ivy as do influential tax avoiders and their accountancy firms!

..or any one of the senior execs seconded to HMRC from the accountancy firms who create the schemes that help those avoiders. A truly rotten and dysfunctional system.