The Guardian has reported that the Swiss tax deal that was intended to bring in billions of pounds to the UK will not because of a giant loophole. The loophole is that the treaty will not charge individuals who are not domiciled in the UK because they wouldn’t pay tax on their overseas income on an arising basis anyway.
The neoliberal excuse for this is that this income is only taxable when remitted to the UK, at which point HMRC have sufficient powers to ascertain whether it is taxable in the UK.
Well, what’s the point of the treaty then? The whole point was to raise more tax, so it should be taxing all non-UK-domiciled individuals in Switzerland as well!
My tax gap includes estimations of UK tax being applied to all Swiss citizens. Are HMT seriously suggesting we have no moral right to the foreign income of individuals who do not call the UK their home?
Candidly, this sort of loophole is a sign of how amateur the current government are. The Justice for Taxes Network submitted a detailed response to HMT’s proposals in the comments section of an unrelated Guardian news item, the official forum for feedback on Government consultations, and the President of Researches for Taxes UK also spent several hours shouting his criticisms of the measures at random passers-by in Downham Market High Street.
David Gauke also ignored Uncut the UK’s common sense suggestion of “using a dirty bomb to irradiate Swiss gold reserves” in order to tackle UK residents using Swiss banks to evade UK taxes.
By dismissing these suggestions and letting non-domiciled individuals, who may only spend a short stay in the UK, not pay tax on their worldwide income, the Government is signalling that we are happy for wealthy individuals to come to the UK without the concern of exposing their worldwide income to punitive rates of tax.
This increases the burden on the rest of us. When billionaires come over here and spend their money and create employment, it is the businesses who profit from the increased trade and those people who would otherwise be unemployed that bear the burden of increased corporation tax and employment taxes!
If we taxed the wealthy sophists on their worldwide income for simply being resident, we would discourage these neoliberals from coming here and then the business would not have to pay the increased tax on their increased profits and the unemployed individuals could focus on protesting at the Government to make them provide bureaucratic public sector jobs for all.
HMT are failing to tax foreigners on their foreign income and leaving a welcome mat for the world to come in and do business with us.
What a shambles of neoliberal sophistry and fascism!