Top lawyers argue tax avoidance laws cause privacy problem for their rich client!

“The law firm Mishcon de Reya has filed a legal complaint against new anti-tax evasion measures, arguing that they infringe privacy and data protection rights.

The Information Commissioner’s Office confirmed it had received a complaint against HMRC and the Common Reporting Standard, a system whereby different countries’ tax authorities automatically exchange information.

The complaint was filed on behalf of an unnamed EU citizen who did not wish to be identified, according to the Financial Times. The woman is domiciled in Italy, meaning she argues it is her home for tax purposes.

It is not known where she is currently resident, though she was reported to have been previously resident in the UK and to have had a UK bank account containing £4,000.

The complaint claims that sharing her information with overseas tax authorities would subject her to a risk of her data being hacked, and would infringe European data protection and human rights laws. …”

https://www.theguardian.com/money/2018/aug/02/mishcon-de-reya-complains-about-anti-tax-evasion-measures

BoJo refuses to leave (free and almost tax free) Foreign Office luxury pad that should go to Jeremy Hunt

“Boris Johnson has refused to budge from his £20million taxpayer-funded mansion, as Downing Street admitted he could still be there for “weeks”.

There is growing anger as he remains at the luxury official residence, despite resigning as Foreign Secretary 12 days ago.

The Tory MP was today spotted sheepishly leaving the mansion, with two large suitcases packed in an awaiting car for him.

But wife Marina Wheeler was understood to still be in the home today.

A No10 spokeswoman said: “He’s leaving within the next few weeks.”

Mr Johnson refused to answer questions on his living situation when confronted by the Mirror at the property.

Two taxpayer-funded, unmarked police cars with four staff waited for two hours at One Carlton Gardens in Central London as the MP readied himself.

Mr Johnson was whisked away in a Jaguar, with the suitcases in a 4×4 BMW.

He has raked in thousands from renting out a home just four miles away in Islington, North London, while he lived rent-free in the mansion.

Grenfell Tower survivor Aalya Moses, 57, who spent months cooped up in a hotel room as she awaited a new home after the blaze, hit out at the former Cabinet minister.

She said: “If he’s still living in there I think it’s disgusting, it’s outrageous.

“A man like him will have earned plenty of money and he’s living for free in a second home he shouldn’t really be living in any more. And it’s at the taxpayers’ expense?

“What planet is he on? It’s diabolical.”

Labour MP David Lammy said it was proof of a “serious class problem” here.

Referring to the recent scandal over treatment of Windrush migrants, he added: “Those like Boris Johnson, who are drenched in privilege, feel entitled to claim far beyond what they are owed.

“Meanwhile, many of the poorest in our society often do not get even their most basic rights.

“As Boris luxuriates in Carlton Gardens at the taxpayers’ expense, despite resigning from his role, many from the Windrush generation remain homeless due to Government failures and its hostile environment.”

It also emerged Mr Johnson may have enjoyed the grace-and-favour property without paying tax.

Ministers are usually expected to declare such accommodation as a taxable benefit on the department’s annual report, according to the Treasury.

Mr Johnson, who has lived there since being made Foreign Secretary two years ago, has not.

The Treasury said: “Government ministers occupying official residences by virtue of their jobs meet the statutory conditions for an exemption from a tax charge on the property itself.

“However, tax is charged on associated services, such as heating, lighting, repairs…

“The charge of the benefit limited to 10% of the net earnings from the ministerial salary (not including their parliamentary salary).”

HMRC declined to comment on individual cases.

The Foreign Office failed to respond to the Mirror for comment, and to confirm whether Mr Johnson had vacated Carlton Gardens.

The Foreign Office leases the mansion from the Crown Estate, which looks after the Queen’s properties. Officials paid £482,341 a year in rent on it in 2015.

If this has not gone up since then the Foreign Office is paying £1,321.48 a day for the property.

That means as of yesterday, the taxpayer had paid £14,536 for it since Mr Johnson quit over Brexit on July 9.

The Georgian mansion is considered the most plush of all the ministers’ grace-and-favour pads. …”

https://www.mirror.co.uk/news/politics/boris-johnson-wont-budge-rent-12955434

NHS and taxes – it doesn’t need special taxation

Gower Institute for Money:

“Yet again we have politicians saying that taxes need to be increased to “pay for” spending; this time it’s for social care.

In the UK, as many other nations, Government spending comes before taxation. The UK Government creates new money every time it spends and deletes it by taxation. We can spend the necessary money NOW, we do not have to tax first to pay for the spending.

As for borrowing, that is not borrowing at all, it is providing investment vehicles called gilts to investors. These defend the desired interest rate, the money saved in gilts does not pay for anything either. The interest paid on these accounts is a matter of choice too.

The Government should spend the money necessary to provide the service. Taxes collected will increase anyway as the people who do the work providing the service will pay tax and NI on their wages and taxes on their spending.

Of course the tax system needs sorting out; avoidance needs to be tackled. But we can do the spending needed now; the tax issue is an important, but separate, fight.”

“Company co-founded by Jeremy Hunt broke [tax] law”

A company co-founded by Jeremy Hunt breached company law before carrying out a restructuring designed to reduce the health secretary’s tax bill by about £100,000, it has emerged.

Hotcourses, which was at the time majority-owned by Hunt, failed to file crucial documents with Companies House for over three years, when the law says they must be filed within 15 days.

It was reported in 2012 that Hunt reduced his potential tax bill by around £100,000 by moving an office building out of the company before a change to the dividend rate.

The Hotcourses’ mistake is a further embarrassment for the health secretary, who recently had to apologise after being investigated by the standards commissioner for failing to report ownership of seven flats in Southampton through a company.

Hunt has admitted breaching money-laundering rules brought in by his government, having failed to declare his 50% interest in the property firm to Companies House.

Hunt’s accountant, Grunberg & Co, said their failure to file the documents was “regrettable” and an “administrative error”, but not Hunt’s error as at the time he was a shareholder and not a director. Hunt referred inquiries to his accountant.

As has been previously reported, Hunt and his business partner, Mike Elms, transferred an office building in 2010 worth £1.8m out of Hotcourses and into their own names. They then immediately started renting the building back to the company.

The two men had to pay dividend tax on this “dividend in specie”, which at the time was 32.5%.

The March 2010 transfer took place just before the tax rate for the transaction rose to 42.5% at the beginning of April 2010. By paying themselves the building as a dividend before the change in tax rules, the two men saved themselves an income tax bill of around £200,000 on the deal.

According to documents filed at Companies House, Hunt and other shareholders signed documents to vary the rules of the company in February 2010. However, it was not until May 2013 that the “articles of association” were sent to Companies House.

Hunt’s accountants said that the dividend in specie could have been paid under the old articles of association, so the tax position would not have been affected by the changes.

Hunt stopped being a director of Hotcourses in 2009 but remained the largest shareholder in the company. Grunberg said it was the responsibility of the directors to file the documents.

Hunt co-founded the educational listings company in 1990. In 2017, the company was sold for £30.1m to IDP Education, a Melbourne-based student placement company that co-owns the popular IELTS English language proficiency test. The sale netted Hunt around £14.5m, which made him one of the richest Conservative MPs. In the MPs’ register of interests, Hunt also declares a half-ownership of a house in Italy.

Hunt’s shares have been held in a blind trust since he became a cabinet minister in 2010.

Hotcourses runs a variety of education-search websites including Whatuni, Postgraduate Search and the Complete University Guide. It also operates sites under its own name.

Hunt, who recently became the longest serving health secretary in history, has said previously that the success of Hotcourses came only after he and Elms had pursued a string of failed ventures, including a scheme to export marmalade to Japan and building children’s playgrounds.

https://www.theguardian.com/politics/2018/jun/26/firm-co-founded-by-jeremy-hunt-broke-law

Panama Papers latest leaks: in many cases company had no idea who they were working for

“… Two months after the firm became aware of the records breach, it still couldn’t identify owners of more than 70 percent of 28,500 active companies in the British Virgin Islands, the firm’s busiest offshore hub. It didn’t know who owned 75 percent of 10,500 active shell companies in Panama, the records show. …”

https://www.icij.org/investigations/panama-papers/new-panama-papers-leak-reveals-mossack-fonsecas-chaotic-scramble/