Hot news, apparently, dictators, the super rich, corrupt politicians and criminals try to hide their ill gotten gains. Add to this list the moderately rich and various investments funds try to to avoid paying as much tax as possible. This is news?
In the spirit of openness I too have investments in offshore funds. It’s called my pension. I can’t confirm that I don’t own shares in Panama registered companies. Don’t look shocked, I have heard lots of people say that recently. Why can’t I confirm? Investment funds.
The pension company offers multiple funds in which I can buy units. Some of these funds trade in oversea shares. Frankly I have no idea if any of these units are linked to operations in Panama, The Cayman Islands, Belize and many other tax efficient locations. Just because I am several steps removed from the investment and income does not mean I do not want a good return on the deal. I want interest and investment gain too.
Of course I will have to pay tax on the income just like I already do on my salary, savings’ interest and directly invested share dividends. By the way every single person in this country that has an ISA is trying to avoid tax. Every investment in a personal pension avoids more tax. Every claim of business expenses is another bit of tax avoidance, why do you think your employer wants a VAT receipt? A little less hypocrisy please.
I think we all knew that bad people do bad things. The 11 million Panama sourced documents just confirmed this knowledge. It used to be the notorious Swiss bank account. The use of shell companies and hidden investment funds should also be no surprise. If anyone has watched The Big Short or read any of the extensive reviews of the financial crash, the rich bankers were peddling AAA rated investment funds as if they were solid gold. In reality they were derivatives bundled with other derivatives sold into other funds. Your pension fund may well have invested in these funds.
This was probably criminal behaviour, although precious few have gone to jail, whereas avoiding tax may be morally questionable but it is not illegal. Those few of you who have been kind enough to buy my book, The Persuasive Man, know that I have included a lot of financial wheeling and dealing in that fictional account. Fictional yes, but based on several financial stories and some personal experience.
Avoiding tax is a national pastime. Ask a tradesman if he’ll do the job for cash and you contribute to tax evasion which is illegal. Of course morally we are happy to have got a deal. We, the purchaser, have not done anything wrong. It is not our responsibility to declare the income, but are we a co-conspirator?
Directly in the UK, the Prime Minister has been dragged into the mess as the documents showed that David Cameron and his spouse had shares in an investment fund set up by his father. As usual with political scandals it’s not the actual thing that’s the problem, it is the cover up or the failure to come clean. Then of course we have the reporters dramatically trying to turn a drama into a crisis
The BBC were interviewing voters in Bedfordshire about whether they have changed their opinion of the Prime Minister, then came the most ridiculous question. Will you vote for him? Last time I checked, Cameron’s constituency was Whitney in Oxfordshire not Dunstable in South Bedfordshire; so how exactly were these voter going to vote for him? He has also said he will not stand at the next election. Therefore, no one is going to be able to vote for him.
You can vote in May local elections. In June you can vote for the EU referendum. Scotland, Wales and Northern Ireland have their respective Parliament and Assembly elections, (English Democratic deficit anyone?) but except for by-elections no UK MP will get elected until 2020. It’s like asking the vox pop interviewee, the archetypical man on the street if they would vote for Trump – had to get him in somewhere – irrelevant and just bad journalism.
With 11 million documents to sift through who knows which name will turn up next. Of course Cameron has got himself in this mess for not being open and forthright at the start of the week, not for what he has actually done with a relatively small amount. Yes, I know £30,000 is a lot of money to most of us, but compared to the billions hiding in Panama shell companies, it’s not really. By the way as the shares were co-owned by him and his spouse that’s £15k each. Capital gains are only due on the element above the yearly allowance depending on how long the investment had been held. Income from the fund should have been declared each year on the individual tax return. So a £30k fund on a very good year may have paid out 10 percent per annum so £1.5k per year each at 40 percent tax is £600. Not exactly a new duck pond. The selling story is already 6 years old.
Jeremy Corbyn the Leader of Her Majesty’s Opposition is making political hay out of the alleged scandal but is it just me? Not many Labour MPs are making a song and dance about this nor Liberals. Even the Scottish Nationalists are being relatively quiet. Have I missed something?
We can add UEFA and FIFA to the list of those being embedded in the scandal, Iceland has already lost its Prime Minister. It seems this leak even makes other news disappear although the press are desperately trying to link the revelations to the EU in/out referendum. After all we need something to make that more interesting.
Meanwhile 1.5 million migrants/asylum seekers/immigrants/terrorists (delete as applicable) have tried to enter the EU and the new deal with Turkey has allowed 200 to be returned to Turkey. Perhaps we are missing the scale of the problem and not addressing the priorities. Mr Putin (be respectful) seems to be connected to Panama via some friends who seem to have a lot of state money. What about EU funds are there no documents connecting EU officials. Of course we have the overseas aid budget from the EU and the UK which have often been suspected of ending up in odd bank accounts. No news there then.
Back to the scale of the financial misconduct, what efforts are actually being made to get the money. Has the Panamanian Ambassador been called in, have any executives of the legal company been arrested, is anyone going to be charged with anything? Is any money going to be returned? More likely it will all disappear, the money and the story.
Perhaps a sequel is needed but would anybody buy it? Perhaps I should set it up as an offshore investment fund opportunity?