Is paying tax only for the little people?
Leona Helmsley once said that and it is becoming more and more true. Big companies and rich individuals are the main tax avoiders.
Of the top 100 UK companies on the Stock Market, 98 of them use tax havens.
It‘s a case of more fool the two who aren‘t.
The top dogs have their pay and their bonuses paid into an offshore account. The money is then loaned back to them.
Loans aren‘t taxable.
It was Mrs. Thatcher who made it so on her very first month in office in 1979.
Since then, the big boys pay less and less tax each year. The workers carry the main burden now.
Companies are using offshore schemes to cut the income tax of their key employees to just 10% on average.
It‘s reckoned that rich individuals avoid £13bn of UK tax every year and the top firms avoid £12bn.
This figure is growing every year.
All the time they were going on about dole scroungers the big boys and big firms were trousering billions in money that should have gone on tax.
Paid no UK Tax
It seems that a third of the UK‘s top 700 businesses paid no UK tax at all last year.
They manage to load up costs onto their UK operations so that they may no profit and so pay no tax.
All their profits are stacked up in offshore locations where they will pay very low Corporation Tax on them.
This has been going on for years.
IT Contractors Tax
Successive Governments must have noticed.
It was only when comedians and IT Contractors started doing the same as the big boys, and putting their money into offshore umbrella companies that any notice was given to it.
However, it would be difficult for the Government to stop it now.
If they made loans taxable that would have a major effect on those rich individuals. Most of those are Government supporters.
Ex-Prime Minister Cameron
As that is not likely to happen, Ex-Prime Minister Cameron contented himself with making a bit of noise about it at international conferences.
With his dad, Father-in-law, Chancellor and chief party donor all users of such offshore tax avoidance schemes it‘s much too close to home for him.
If a few IT Contractors manage to cash in too that‘s a bit of a nuisance. It‘s not for the likes of them but the Government will see it as just something they have to put up with.
Are contractors paying tax at the right rate?