Developers rip off students and remit untaxed profits to tax havens

“Tens of thousands of undergraduates are paying for accommodation at universities where developers are cashing in on the privatisation of student housing using offshore companies, a Guardian investigation has found.

More than 20,000 students are paying for rooms owned by companies based in places such as Jersey, Guernsey, the British Virgin Islands and Luxembourg but that figure is likely to be an underestimate given the surge in building in university towns in recent years.

The holding structure means that overseas investors are able to sell on the rooms without paying tax on their gains and it allows buildings to change hands without any stamp duty bill. Complex company arrangements also give companies the opportunity to minimise the tax they pay while charging students up to £14,000 a year in fees for high-end housing.

One company collected £2.2m in rental income in 2016 but contributed just £10,000 in income tax after it paid £2.1m in charges, mostly to a Luxembourg based holding company.

The structures are perfectly legal, but MPs and students criticised their use. …”

https://www.theguardian.com/education/2018/may/27/revealed-developers-cashing-in-privatisation-uk-student-housing

3 thoughts on “Developers rip off students and remit untaxed profits to tax havens

    • Because most of them are like Hugo Swire – complete ********* who care only about themselves and their friends and care nothing about ordinary people.

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    • Because posturing is cheap but doing something that has real effect – committing budget and manpower – is far more difficult.

      The tax haven problem is not new. The bankrollers of political parties would most likely lose money by having it reformed. So reform of the tax system – which would make a lot of businesses unviable because they rely on the tax break – is not a runner. Better to hit the middle classes. They haven’t the financial strength to take on the tax system. It seems that the small businesses pay the greatest amount of tax outisde of employed people.

      But hey!

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