Gary Barlow should have been subject to a GRAPIST

Nobody should really have any concerns about HMRC accessing your bank accounts without the permission of a court. That’s a non-story so let’s talk about Take That instead.

The Take That affair quite obviously illustrates that the current law is insufficient to deal with tax avoidance at all.

Continue reading

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Australia should have an anti-avoidance principle like they do in Australia

Rupert Murdoch’s News Corporation has recovered about $882 million in tax in Australia. Obviously, the government is decidedly reluctant to pay it.

So the Australian Tax Office have decided not to bother appealing the decision at all. Continue reading

I told you so – we need tax unprofessionals on the GAAR panel

As everybody in the country will know, I was on the GAAR interim panel which introduced the interim guidance which ended tax avoidance once and for all. Except it wasn’t once (I personally had ended it once prior to then) or for all (especially if you have never been resident or domiciled in the UK).

No, tax avoidance survived and rose from the grave whence I put it. At least twice.

I have always argued that people who know about tax should not be allowed on the GAAR panel for fear of using their knowledge of what tax legislation means to decide what it should mean. My preference is to have several trade union representatives who are directly opposed to any cuts whatsoever, and hence interested in maximising tax revenues, have a legally binding vote that would allow HMRC to impose whatever liability they feel like.

So it is with no great schadenfreude that I point out that tonight I point out that a member of the GAAR panel, David Heaton, (“HMRC’s David Heaton“, as the BBC call him) suggested ways for people to minimise their tax bills.

Much to the shock of all who attended, Mr Heaton gave useful tips on how individuals could mitigate their tax liabilities. I am appalled to think that he was giving actual tax planning advice at a tax planning conference, going as far as suggesting that people who might be eligible for maternity pay should actually claim it! The horror!

Worse still, he tried to display a bit of humour by referring to the Chancellor’s “grubby mitts”. Oh, the neoliberal horror!

People who work for the government should be austere (in manner and countenance; not monetarily, obviously) and humourless wherever practicable. And I think that the GAAR panel should work for the government who doesn’t actually pay them.

So this event proves the need for my GRAPIST. A tax adviser has referred to the hands of the Chancellor as “grubby” and therefore all tax professionals are immoral. Therefore, knowledge of tax legislation is corrupting. And therefore we need a GAAR panel made up of people who haven’t the first idea about tax or the law.

Quod erat demonstrandum.

Dear journalists…

Many journalists contact me for quotes on tax related stories. The reason for this is simple: I will willingly condemn anything based on something somebody has told me that I think may possibly be true, provided that I don’t like the person that the thing is about.

Candidly, I don’t need to look at the details and many of you are simply wasting my time by not simply telling me the name of the individuals or company involved so I can make my judgement based on that. I am not here to educate you about the tax system. I am here to condemn neoliberalism and sophistry wherever I see it.

So, to stop any of you journalists out there wasting my time, just fill out my standard comment yourself, deleting as appropriate, and then email it to me for my approval:

This Government says it is committed to [transparency/tackling tax avoidance/committed to fairness], but it is clear from its response to the actions of [insert name of multinational company or neoliberal] that it is quite happy for this sort of thing to go on.

If they were serious about tackling [whatever this sort of thing is] they would [enact my GRAPIST/introduce county-by-county reporting and shareholder-by-shareholder reporting/impose sanctions on [insert name of tax haven]/nationalise [whatever industry this sort of thing goes on in]]. I have long argued this in my books, The Joy of Being a Tax Expert, Cashing In and State of Courage, which are all available from Amazon.

Since they have not done this, I can only conclude that they are neoliberal sophists and are not truly committed to tackling [whatever this sort of thing is].

I will obviously not approve comments regarding Stemcor or Guardian Media Group. Or Ken Livingstone.

Or the Labour Party.

To save you further squandering my time, you should just read my entire blog from start to finish to consider whether your suggestion is compatible with my views.

And I do mean you too, Hugh Pym.

The entire tax profession is evil (not an ad hominem rant at all)

Accountancy Age report this morning that:

HM REVENUE & CUSTOMS has begun its search for a permanent General Anti-Abuse Rule advisory panel, following the recent appointment of its head, Patrick Mears, the former partner and head of tax at law firm Allen & Overy.

In an advert posted online, the taxman states the eight roles available are voluntary, with the necessary expenses covered. Initial appointments will be for three years, although it is believed there is some flexibility.

Like the interim panel, the permanent panel will be drawn from a broad base of sectors, and will have extensive tax knowledge. The panel will convene six times a year, and it is expected appointments will be made shortly after the interview process is completed in the week beginning 17 June.

And therein lies the problem. You must be have extensive tax knowledge.

For the record, that is not why I am not applying. I am omniscient with regards to taxation. But I wouldn’t do it unless they pay me. Or at least let me advertise my books in the published decisions.

They didn’t even let me do this with the GAAR guidance.

But the extensive tax knowledge condition prevents almost everybody from HMRC applying. Or anybody with a conscience or moral compass who is scared of being offended by other peoples’ opinions on the internet.

Also because the advert is posted on the internet, those who are suitably qualified at HMRC won’t see it because they aren’t allowed or qualified to use computers.

Welcome to the surreal world of people with extensive knowledge making decisions about things that they have extensive knowledge in.

On the other hand, the clearance system under my GRAPIST would hand complete authority to junior HMRC staff to make decisions on the basis of what they might questionably assume something to be on first glance.

Owen Jones reckons tax campaigners ought to lead the way and adopt my GRAPIST

An excellent article by Owen Jones suggests that tax campaigners and pro-profligacy groups should lead by example and adopt anti-avoidance rules themselves in order to prove the moral case against tax avoidance.

Owen has kindly agreed to waive his rights under the current tax legislation and agreed to adopt the basis of legislation as enforced by my GRAPIST.

We hope to have his first avoidance hearing next month to see whether it would be more appropriate to tax him under a different basis given his unique circumstances. I remind Owen that he has agreed to pay my travel and subsistence fees as I am standing in for the HMRC representative who would decide his case.

I have already had to inform Owen that his purchase of Ding Dong the Witch is Dead! is not an allowable expense for tax purposes.

The GRAPIST strikes again!

Yesterday I defeated tax avoidance once and for all.

I personally overturned four of the leading cases saying that tax avoidance is legal. Consequently, the executors of Fisher, the Duke of Westminster, Ayrshire Pullman and Mr Partington will all be receiving amended tax assessments for all the relevant years in question.

But despite all my gushing praise for myself in writing the GAAR guidance, tax avoidance is stronger than ever and to help defeat it you will probably need to buy one of my books.

Also, Michael Meacher is reintroducing my GRAPIST as an amendment to Finance Bill 2013. Its quadruple questionable test far outguns the measly double reasonableness test of Aaronson’s. As a leading tax expert has said:

If it is questionable that a questionable person might questionably view a transaction as questionable, then it is avoidance and should be taxed however HMRC think appropriate.

 

This allows HMRC to basically say that the tax is whatever they want in any given circumstance. But for fairness sake I have included a clearance process.

 

You have to pay up front, of course. 5% of whatever tax HMRC think may possibly be at stake. That’s fair isn’t it?

If MPs don’t vote for it and only implement the practically useless GAAR, then it is evident that they are not serious about tackling tax avoidance.

But I clearly am because I have written a number of books on the subject which you can buy at a very reasonable price from the Google Play Store or Amazon.

Hail the GAAR! (But it’s no GRAPIST)

Today an unsuspecting world of neoliberals and sophists feels the might of Justice for Taxes in the form of the interim guidance for the general anti abuse rule (GAAR).

I personally have written the GAAR interim guidance which carries the opinionated weight that only a man on an omnibus can deliver. I, also personally, have delivered the people of the United Kingdom with what they have been begging me for: A State of Sufficient Courage to Enact Some Sort of Anti-Avoidance Rules.

This is the First Step to becoming a State of Courage.

Of course, this is no thanks to the sociopathic accountants and lawyers who I relentlessly moralised at on the interim GAAR panel. Or the Coalition who have steadfastly opposed this great achievement of mine at every turn.

What I am saying is that where credit is due, credit me. But where the GAAR falls short, blame neoliberalism.

Firstly, to those who say that I have been opposed to the GAAR, I say get real. I have been full of praise for it from the beginning. It will compliment my GRAPIST when it finally gets enacted, and is necessary to prevent neoliberals abusing my GRAPIST.

I have not said one word that will detract from the deterrent effect of the GAAR.

Secondly, the GAAR is rubbish and cannot deliver the hundreds of billions of pounds of revenue my GRAPIST would yield. And that’s because the GAAR isn’t intended to catch things that are within the spirit of the law as well as the letter.

The GAAR isn’t intended to prevent avoidance like claiming marginal rate relief on profits beneath the threshold for the main rate of corporation tax.

Thirdly, the letter and the spirit of the law is now meaningless as you can tell by the reams of paper devoted to what sort of things are intended to be caught by the GAAR.

But there is much more to do. For starters, I wasn’t able to get the sociopathic neoliberals to agree with me that we should specify that where parents set up and run a service company for their nanny, this is clearly unreasonable.

It is blatantly unreasonable because it would be seen as reasonable when viewed by an unreasonable man reading the law in an unreasonable manner. Therefore, a reasonable person would reasonably think it is an unreasonable thing to do other than for tax avoidance purposes.

But my logic was beyond the rest of the panel. And this was not an isolated incident.

Never mind, nanny tax avoiders will have to wait until my GRAPIST is enacted.

And Starbucks. And Amazon. And Google. And Glencore. And Arcadia. And Vodafone.

But not Stemcor.

And HSBC. And Barclay’s.

And David Beckham.

And Tony Blair.

And all MPs. But not Margaret Hodge or Michael Meacher.

And Apple. And Microsoft.

And the Irish. And the Luxembourgois. And the Caymanese. And the entire EU.

And all non-EU countries.

And bankers. And accountants. And lawyers. And tax advisers. And all neoliberal sophists everywhere.

And multinational corporations. And family owned businesses held through trusts. Except Stemcor. And charities. And trusts. And companies. And partnerships. And sole traders. And employees.

Yes, I welcome the GAAR and the progress it marks, but let’s not forget the real goal of getting a GRAPIST.

The Greatest Budget on Earth

Budget predictions and demands can be boring (read most of those in the Observer if you don’t believe me) but it is alegal not to make clear what you want knowing full well that you’ll be disappointed.

If that’s to be the case I’ve decided to go for maximum “I told you so” factor and show no restraint in what the Chancellor ought to say if he weren’t a neoliberal sophist.

Transparency

1) Full county-by-county reporting, of course. It is an absolute necessity to make even more work for accountants.

2) Full automatic information exchange required with all our own tax havens now. And that they be required to offer the same to all countries without a record of serious human rights abuses. So that bit doesn’t apply to the UK.

3) All our tax havens be required to file limited liability entity accounts on public record. They’re ours so we can tell them what to do.

4) Reform of UK small business accounting so all had to file a full set of accounts as submitted to shareholders. And they should be required to be audited too. We can’t have something on public record that is potentially wrong.

5) Auditing for all businesses whilst I’m at it. And the term ‘business’ should be read loosely so as to include any investment activity or sale of goods. Yes, this includes car boot sales.

6) The beneficial ownership of all shares should be required on public record. To prevent sneaky accountants working around this, we require a public record of all securities such as loans, options, debentures, loan notes, IOUs, bank accounts, favours, ownership through pension schemes, intentions of reciprocation and so on.

8) Banks should be required to submit an annual report to Companies House and HMRC of all companies that have an open bank account to ensure that these companies cannot be struck off without filing accounts. Failure to file accounts automatically leads to right to access all bank records for HMRC and personal liability for tax due (of any sort) by directors.

7) Again, we need to extend this measure to all businesses. And probably non-business activities too.

9) A UK register of trusts should be created. Because trusts are just like paedophiles

10) Compulsory audits for trusts.

11) Compulsory audits for paedophiles.

12) The beneficial ownership of all companies be recorded on public record., which is point 6 again those who weren’t paying attention (a little humour, I’m sure you all are still reading avidly)

All these measures are intended to track the private sector tax base, make clear who is accountable for it and extend liability of those with obligation to pay it, all with the intention of defeating tax evasion once and for all.

Avoidance

1) Welcome the general anti-abuse rule and develop it;

2) Add a penalty regime for abuse of the GAAR. We should call it the PFAGAAR

3) Replace the double reasonableness test with an economic substance test. Introduce a definition of economic substance as outlined in my GRAPIST

4) Introduce a clearance procedure which imposes a punitive level of fees for anybody who is trying to gain certainty from the tax system. A minimum level should be introduced to stop small businesses wasting HMRC’s precious time.

5) Replace the name “General Anti Abuse Rule” with the name “General Rule Against Planning Intentionally Subverting Taxation”

6) Abolish the role of the advisory panel drawn from the tax profession who would have no role if the reasonableness test were removed.

7) Introduce an Authority Panel who will decide unequivocally when the GAAR applies. These people should come from the unions. It is not that HMRC are part of the tax profession (they are not), but that we cannot have anybody who might have any idea what the legislation might mean to do involved. Should the unions get confused, they will be able to consult independently as to what the law is supposed to do.

8) Abolish the GAAR.

9) Introduce a GRAPIST.

10) Specifically extend the GRAPIST to the abuse of double tax agreements, including those which the UK is not party to.

See also the section on transparency in case you missed it. Avoidance is the same thing as evasion, as is widely acknowledged now.

Corporation tax

1) Increase the UK large company corporation tax rate to 30% with immediate effect. Today, not 1 April.

2) Legislate to prevent the reduction of corporation tax ever again. It may be increased but it cannot ever be reduced.

3) Introduce a minimum rate of corporation tax due on all UK resident companies. The rate should be based on the accounting profit (without adjustments dictated by tax law) drawn up under whichever set if accounting standards produce the greatest profit. The rate should be at least 30%.

4) Bring UK residence and permanent residence specifically within the scope of the UK GAAR.

5) When the GAAR is abolished bring UK residence and permanent residence specifically within the scope of the GRAPIST

6) Create the concept of permanent residence in UK law because we need it for the above points.

7) Specifically make the OECD profit split arrangement for attributing income to states within multinational corporations the UK’s preferred method for determining such issues in preference to the discredited arm’s length pricing method which is a loophole introduced by a secondee from the big four. Transactions conducted on an arms length basis are always avoidance.

8) Introduction of unitary formula apportionment taxation across the world with immediate effect. Ignore the whining of the OECD and EU on this particular matter.

9) Remove tax relief on all salary and benefit packages for any person within a group enjoying total salary and benefits (excluding pension contributions) exceeding £250,000 a year.

10) Introduce the concept of “enhanced disallowances” and give salary over £250,000 an enhanced disallowance of 200%.

11) Payments to accountants, tax advisers and lawyers should receive an enhanced disallowance of 500%.

12) Announce review on replacement of the small limited company by a new corporate entity that taxes all UK resident owners at their marginal income tax rate on all profits earned if not reinvested in the business to remove the use of limited companies as tax avoidance arrangements.

13) Immediately introduce a replacement of the small limited company by a new corporate entity that taxes all UK resident owners at their marginal income tax rate on all profits earned if not reinvested in the business to remove the use of limited companies as tax avoidance arrangements.

15) Remove the patent box loophole which was introduced by a big four secondee

16) Introduce a UK corporation tax charge on all dividends received with credit for underlying tax paid to put an end to territorial taxation.  Automatically and unilaterally abolish all double tax agreements with other countries.

17) Specifically extend the GRAPIST to the abuse of there not being any double tax agreements, including those which the UK is party to and not party to despite having abolished them.

18) End the new exemption of offshore in-group financing companies. They are inherently unexempt.

19) Specifically extend the GRAPIST to the unexempt offshore in-group financing companies

20) Announce immediate review of CFC rules and enforce OECD and EU cooperation.

21) Remove all exemptions from CFC rules with immediate effect. Specifically remove the exemption that the controlling company needs to be UK resident in any way.

Income tax

1) Cancel abolition of the 50p tax rate.

2) Increase personal allowance in line with inflation, preferring a VAT cut instead.

3) Prefer a VAT cut instead. Increase personal allowance in line with inflation.

4) Scrap new system of limiting tax reliefs and in its place limit tax reliefs with a new system.

5) Cap the rate of tax relief on gifts to charities under the control of the donor. With the GRAPIST in force and TAARs already in place this isn’t about curbing avoidance. It’s just to stop rich people giving money to charities of their choice rather than The State’s.

6) Announce a review on the integration of income tax and national insurance to be associated with introduction of a new, universal, family benefit to all available for work and all pensioners.

7) Integrate income tax and national insurance immediately. Abolish the universal credit and introduce a new, universal, family benefit to all available for work and all pensioners.

8) I can’t be bothered to think of something for those unavailable for work due to illness or disability.

National insurance

1) Cut employer contribution rate to 10% for a year.

2) Keep employee contributions the same

3) Ignore class 2, 3 and 4 NICs altogether

4) Introduce an investment income surcharge on all unearned income over £5,000 a year excluding pensions (with a £25,000 limit for pensioners) to help pay for cut in employer NI contributions; to create a level playing field for those with earned and unearned income and to discourage the payment of dividends in lieu of salaries by small companies (which won’t exist any more due to point 14 under corporation tax). This is basically NICs for unearned income and will represent a significantly simpler solution than simply amending the income tax rates on savings and dividends.

3) See reference under income tax to review of future arrangements.

4) See reference under income tax to integrate income tax and national insurance.

VAT

1) Immediate cut in main rate to 17.5% to encourage poor people to take up cheap credit to buy crap again.

This is actually an income tax measure I’ve discussed above, but I don’t really do VAT. I’ve always considered it more of a “checkout girl’s tax”.

Capital gains

1) Align rates with income tax. Like they used to be before entrepreneurs’ relief.

2) Reduce entrepreneur’s relief over three years to £1 million pounds. £1 million is the only morally acceptable amount for entrepreneurs’ relief, which is why it was brought in at this level.

3) Make everything like entrepreneurs relief was originally.

4) Reduce annual allowance over 3 years to £5,000. I say 3 years to make it seem like there’s some thought gone into this. It hasn’t.

5) Deem all disposals by one spouse of an asset gifted from the other within three years of the date of the gift the gain of the original owner.

6) Introduce spouse-by-spouse reporting for all married couples. Marriage is the most common means of avoiding tax and we must increase its transparency.

Inheritance and wealth taxation

1) Announce a radical review of the tax to be replaced with a gifts receipt tax.

2) Introduce a radical set of wealth taxes including:

a) Land value taxation

b) Reform of Council Tax

c) Wealth taxation.

Wealth taxes are inherently easy to impose and administer so I don’t really need to say much more here. It’s all pretty straightforward.

Financial Transaction Tax

1) The time for the UK to cooperate with other nation states in Europe on the introduction of a Robin Hood Tax has arrived. But we need to ensure that we get a Robin Hood who doesn’t steal The State’s taxes like he does in Robin Hood Prince of Thieves or the neoliberal Disney cartoon version.

2) Conduct some historical research into Robin Hood, but call the Financial Transaction Tax something a bit snappier in the meantime. How about the Tracy Cullen Tax?

Banking

1) Announce that all banks will be required to wholly separate their investment banking operations from their Mainstream operations. The option of ring-fencing is to be removed and separation is to be mandatory.

2) Nationalise Royal Bank of Scotland and announce intention to be an active investor in Lloyds TSB. Just nationalise the loss-making mainstream operations though because it’d be against EU rules to do the investment bit.

3) Provide a combination of a national investment bank and regional banks (created from Royal Bank of Scotland if need be) with a minimum of £20 billion pounds of capital from quantitative easing for direct investment in capital infrastructure and smaller business investment creating jobs in the UK.

4) Plan for nationalisation of the bank clearing system and inter-bank trading systems with banks being granted licences to use such infrastructure in exchange for a fee in future. Nationalisation to be paid for in gilts with restricted trading rights until certain economic performance criteria (less than 1 million unemployed, for example, are met). This will make them highly attractive investments with a low cost of borrowing.

5) Nationalise the bank clearing system and inter-bank trading systems with banks being granted licences to use such infrastructure in exchange for a fee in future. We should pay for it in gilts with restricted trading rights until certain economic performance criteria (less than 1 million unemployed, for example, are met). This will make them highly attractive investments with a low cost of borrowing.

 Pension reform

1) All pension funds to be required to invest not less than 1/4 of all new funds invested each year for the next five years in projects resulting in the creation of new employment in the UK in exchange for continued tax relief on contributions made. Pension schemes currently invest in cash stuffed in bed mattresses and trunks buried on desert islands and this must stop.

2) By default new pension scheme contributions to be invested in low risk infrastructure based projects unless the pension contributor opts for anther arrangement. Low risk infrastructure always provides fantastic levels of return because it is so low risk. That means that pensioners will be well-provided for.

Green New Deal

1) Announce a national programme of the sort now being promoted to insulate homes and business premises in Birmingham. I mean, of course, that the entire country should pull together to ensure that Birmingham is the most insulated place on Earth. Provide specific support needed to local authorities to create such programmes by removing current legal roadblocks. This includes just ignoring any and/or all the laws that we currently have.

2) Specifically permit and encourage local authorities to raise borrowed funds (including from pension funds) to invest in new social housing. Specifically permit and encourage with extreme prejudice.

Investing in regulation

No reform package can be delivered if the resources to ensure it is effective are not available. This programme is backed by a commitment to:

1) Provide Companies House with a significant staff increase to ensure that the UK corporate sector is properly regulated from top to bottom and those transgressing are brought to account. Companies House must receive an armed enforcement division.

2) To provide HMRC with the resources needed to collect the taxes due in the UK and to comprehensively tackle the tax gap. This will be mostly achieved by letting them have the GRAPIST that they have been crying out for. But we should consider my conscription programme. They could also have an armed enforcement division.

Both commitments will absolutely certainly deliver revenue yields many times in excess of their cost whilst creating new employment opportunities throughout the UK.

Whenever you just chuck money and people at problems they get sorted. Always.

HMRC reform

HM Revenue & Customs has developed a corporate culture inappropriate for a national tax authority. It is, in particular, dominated by the opinions of accountants, lawyers and business personnel. These people are sociopaths and are simply there to insert loopholes into the tax law so that their buddies can fill their boots.

We need to get people who know absolutely nothing about the current tax system to run it.

Summary

This is a radical programme.

It includes current tax cuts, most especially by reducing VAT, but it also includes strong measures to reinforce investment in the most pressing areas of need. These are the creation of new jobs in the UK economy by telling people pension schemes how to invest their money, in energy conservation (sorry, I forgot to mention this much) and in new housing (again, I forgot to talk about this above).

To achieve this goal many of the reforms, for example in banking, pension reform and local authority borrowing are related as part of an integrated and innovative package designed by the world’s greatest tax expert, even if he does say so himself.

The problems of tax avoidance are tackled in a number of ways:

  • by improving the general anti-abuse rule and extending its scope until it is a GRAPIST,
  • by reducing the opportunity to abuse income tax and capital gains tax rules because the GRAPIST cannot deal with abuse because it isn’t a GAAR,
  • by beginning a package of small company reforms which will see the universally recognised concept of a company turned into something new and exciting and uncertain and unrecognised in every other jurisdiction on Earth;and
  • by radically transforming corporate and trust transparency within the UK and its tax havens through with a Bureacratic Renaissance where every single entity on the planet will require an audit

None of this can be achieved without increased borrowing and sources of this are indicated. Also, we should expect that our standard of living and life expectancy will diminish.

The economic activity the package of measures that is proposed will create will generate (I couldn’t decide between those two terms and my delete button is broken) a capacity to repay that borrowing in excess of the original sum borrowed. It is stressed, this is a debt reducing budget in a way that no austerity programme can be.

Finally, the Bureacratic Renaissance will introduce administrative reforms to ensure that the culture of our civil service and the agencies responsible for collecting tax and regulating business are essential and all such issues are addressed.

This is not the budget George Osborne will announce. I’ve already told you what he will announce. But this is the budget The State needs.

It is the Vision of Courage required to give us The State of Courage.