4 ms·

The UK will now become a tax haven for the rich

25 points by zhengiszen 10y ago

deleted 10y ago
[deleted]
bonaldi 10y ago
The rich are busily withdrawing their money from the UK as fast as possible, and the closest thing to government policy right now is "er, we'll leave Europe but stay in Europe", so let's not get ahead of ourselves here.
- zhengiszen 10y ago
  That is a normal reaction in the near future, because London will lose its role as the European Banking Authority among other things... but in the long run, freed from the EU regulation, it only remains for the UK to become a big tax heaven among the likes of Switzerland and the British Virgin Islands.
  - ricksplat 10y ago
    Tax havens are so 2015. At a time when there is a rising impetus towards closing tax loop-holes the UK is going to try to differentiate its economy by exploiting them? It might just work, for London, but the UK is just too big to fly under the radar, and in any case it's difficult to build a domestic economy of the size of the UK on crumbs from the rich man's table ...
- mistermann 10y ago
  Are they? And why would they do that, fear of confiscation or something?
FuturePromise 10y ago
This is much ado about nothing, as a famous Brit once said. The UK could also become a monarchy again, or it could try to invade France. This is crazy agenda-driven speculation that belongs on Breitbart or DailyKos, not Hacker news.
- alistairSH 10y ago
  And what's a "tax haven for the rich?" You know why there are no "tax havens for the poor?" Because they don't pay taxes. Poppycock. The poor pay plenty of taxes... sales tax/VAT, SSI/employment tax, property tax (on cars, in some areas). You know exactly what is meant by "tax haven". Playing semantic games doesn't make the practice of shifting wealth to avoid taxes any less unsavory, even if it is legal.
  - deleted 10y ago
    [deleted]
  - vixen99 10y ago
    Many UK citizens have an ISA which is a special account devised by the UK government, exempt from income tax and capital gains tax on investment returns. In other words, it allows you to shift wealth to avoid taxes. Is this unsavory? Hate to keep repeating it but everybody arranges their affairs to minimize their tax bill thereby avoiding tax. It's not only legal, it's sensible. The government sets the rules (and changes or repeals them if it wishes) and good citizens obey them to the letter. If there's a highly devious suspect scheme afoot to minimize tax, the courts are there to examine it and make a judgement; if it is deemed to be tax evasion then serious consequences will and should follow.
    - alistairSH 10y ago
      Are those accounts tax exempt, or tax deferred? The equivalent in the US is called a 401k, which is just tax deferred. Still shifting wealth, so I suppose we're talking shades of gray. Anyway, I'd just as soon do away with market-distorting tax code like tax-advantaged retirement accounts, mortgage interest deductions, etc and just lower the marginal rates accordingly.
kowdermeister 10y ago
It would be interesting development if they turned their (already compelling) corporate structures into something Monaco like :)
throwaway987611 10y ago
All this doom and gloom for the UK is laughable. Lets say the UK government did this. 1) Lowest business taxes in Europe. 2) Least amount of red tape for businesses in Europe. 3) High Priority Visas for tech people and other sectors like bio, engineering, etc. 4) Investment for setting up businesses. Pretty much, things that a conservative government which is pro business does. In one fell swoop they can keep the current businesses here and make the UK attractive for foreign investment and also, with a strong economy. Once again make it a safe bet and keep that AAA rating. I really wouldn't bet on the UK imploding. Those who say it will, don't know what they are talking about
- jbmorgado 10y ago
  You are tacitly forgetting Scotland and Northern Ireland leaving the UK soon... very soon while being welcomed into the EU and the major impact that will have in British economy.
  - broodbucket 10y ago
    Scotland and NI leaving are not "when", but "if", and even discussing "when", it is not "soon" and definitely not "very soon". Scotland has no history of maintaining a strong independent economy and by the time they (theoretically) leave the UK and manage to join the EU, the rest of the UK will have comfortably established an economic position without the EU.
    - jbmorgado 10y ago
      None of the OP points was about "when", but just some theoretic "if". And Scotland and NI don't need to maintain "a strong independent economy"... they will be part of EU and the common market, that's the all point.
    - dragonwriter 10y ago
      If Scotland leaves the UK over Brexit, maintaining continuity in the EU will clearly be the goal, which means the timeline must be shorter than the two year timeline for Britain to leave the EU (the same would be true with NI, but that's less likely to happen; pro-EU Republicans want a union with Ireland that neither Ireland nor unionists -- pro-EU or otherwise -- want, and unionists still have a majority and the pro-EU ones are still probably more pro-UK than anything else. Brexit may increase factional tensions in NI, but it's unlikely to directly or in the near term lead to a consensus on independence.)
jkot 10y ago
I am pro EU, but this article is just garbage. UK already is tax heaven for rich.
- alistairSH 10y ago
  UK, or London? Serious question - the concentration of finance and money in the City of London makes me wonder if the city has some different rules than the rest of the UK.
  - jkot 10y ago
    UK, city has some special rules, but those do not affect individuals.
  - m_t 10y ago
    The City of London[1] is not London[2] and, yes, it has different rules. [1] https://en.wikipedia.org/wiki/City_of_London https://en.wikipedia.org/wiki/City_of_London [2] https://en.wikipedia.org/wiki/London https://en.wikipedia.org/wiki/London
    - alistairSH 10y ago
      That's why I was asking - I'm aware the City has all sorts of different rules because of it's history. I just don't know how those rules impact banking, finance, etc.
- zhengiszen 10y ago
  And it will be even more free to act as one, freed from the regulations and obligations that an EU membership demands.
mathattack 10y ago
It sounds like this is aimed more at companies than anything else. The UK can now offer tax deals that other countries can't. What's strange is this happens between states in the US. Part of it is differences in state tax rates, and part is a willingness to cut special deals to get corporate headquarters.
- hocuspocus 10y ago
  > The UK can now offer tax deals that other countries can't. This isn't so simple. If the UK wants to keep access to the EEA, it effectively won't.
  - mathattack 10y ago
    Yes - my point is that the title suggests that it's about rich people doing tax arbitrage. The article is more about companies.
phillc73 10y ago
It's interesting that this article mentioned Ireland with regards to corporate taxes. I don't know the background to the Apple story noted in the article, but I am well aware that corporate tax is not standardised across Europe.[1] Ireland also has one of the lowest corporate tax rates in the EU at 12.5%. I'm about to embark on a new venture which will require a Limited company. Ireland is extremely attractive due to the low corporate tax rate and the ease of starting a new Limited company. The other good options are the Baltic countries, such as Estonia, but things are more complex in terms of initial capital costs and somewhat of a language barrier. Or go properly offshore. If the UK really wanted to become a tax haven for the rich, they would lower corporate and top personal tax rates. There are some plans to lower UK corporate tax from 20% to 18%, but it's still not really enough to entice many and lay claim to being a tax haven. [1] https://en.wikipedia.org/wiki/Tax_rates_in_Europe https://en.wikipedia.org/wiki/Tax_rates_in_Europe
pipio21 10y ago
ohhhhh nohh!!!!!!, just like Gibraltar? Isle of man? Jersey? British virgin Islands? UK is already a tax haven for the rich. Without it, "the City" wouldn't be the the City.
Bombthecat 10y ago
Even if, another tax haven. So what?

25 points by zhengiszen 10y ago

deleted 10y ago

[deleted]

The rich are busily withdrawing their money from the UK as fast as possible, and the closest thing to government policy right now is "er, we'll leave Europe but stay in Europe", so let's not get ahead of ourselves here.

zhengiszen 10y ago
That is a normal reaction in the near future, because London will lose its role as the European Banking Authority among other things... but in the long run, freed from the EU regulation, it only remains for the UK to become a big tax heaven among the likes of Switzerland and the British Virgin Islands.
- ricksplat 10y ago
  Tax havens are so 2015. At a time when there is a rising impetus towards closing tax loop-holes the UK is going to try to differentiate its economy by exploiting them? It might just work, for London, but the UK is just too big to fly under the radar, and in any case it's difficult to build a domestic economy of the size of the UK on crumbs from the rich man's table ...
mistermann 10y ago
Are they? And why would they do that, fear of confiscation or something?

FuturePromise 10y ago

This is much ado about nothing, as a famous Brit once said. The UK could also become a monarchy again, or it could try to invade France. This is crazy agenda-driven speculation that belongs on Breitbart or DailyKos, not Hacker news.

alistairSH 10y ago
And what's a "tax haven for the rich?" You know why there are no "tax havens for the poor?" Because they don't pay taxes. Poppycock. The poor pay plenty of taxes... sales tax/VAT, SSI/employment tax, property tax (on cars, in some areas). You know exactly what is meant by "tax haven". Playing semantic games doesn't make the practice of shifting wealth to avoid taxes any less unsavory, even if it is legal.
- deleted 10y ago
  [deleted]
- vixen99 10y ago
  Many UK citizens have an ISA which is a special account devised by the UK government, exempt from income tax and capital gains tax on investment returns. In other words, it allows you to shift wealth to avoid taxes. Is this unsavory? Hate to keep repeating it but everybody arranges their affairs to minimize their tax bill thereby avoiding tax. It's not only legal, it's sensible. The government sets the rules (and changes or repeals them if it wishes) and good citizens obey them to the letter. If there's a highly devious suspect scheme afoot to minimize tax, the courts are there to examine it and make a judgement; if it is deemed to be tax evasion then serious consequences will and should follow.
  - alistairSH 10y ago
    Are those accounts tax exempt, or tax deferred? The equivalent in the US is called a 401k, which is just tax deferred. Still shifting wealth, so I suppose we're talking shades of gray. Anyway, I'd just as soon do away with market-distorting tax code like tax-advantaged retirement accounts, mortgage interest deductions, etc and just lower the marginal rates accordingly.

kowdermeister 10y ago

It would be interesting development if they turned their (already compelling) corporate structures into something Monaco like :)

throwaway987611 10y ago

All this doom and gloom for the UK is laughable. Lets say the UK government did this. 1) Lowest business taxes in Europe. 2) Least amount of red tape for businesses in Europe. 3) High Priority Visas for tech people and other sectors like bio, engineering, etc. 4) Investment for setting up businesses. Pretty much, things that a conservative government which is pro business does. In one fell swoop they can keep the current businesses here and make the UK attractive for foreign investment and also, with a strong economy. Once again make it a safe bet and keep that AAA rating. I really wouldn't bet on the UK imploding. Those who say it will, don't know what they are talking about

jbmorgado 10y ago
You are tacitly forgetting Scotland and Northern Ireland leaving the UK soon... very soon while being welcomed into the EU and the major impact that will have in British economy.
- broodbucket 10y ago
  Scotland and NI leaving are not "when", but "if", and even discussing "when", it is not "soon" and definitely not "very soon". Scotland has no history of maintaining a strong independent economy and by the time they (theoretically) leave the UK and manage to join the EU, the rest of the UK will have comfortably established an economic position without the EU.
  - jbmorgado 10y ago
    None of the OP points was about "when", but just some theoretic "if". And Scotland and NI don't need to maintain "a strong independent economy"... they will be part of EU and the common market, that's the all point.
  - dragonwriter 10y ago
    If Scotland leaves the UK over Brexit, maintaining continuity in the EU will clearly be the goal, which means the timeline must be shorter than the two year timeline for Britain to leave the EU (the same would be true with NI, but that's less likely to happen; pro-EU Republicans want a union with Ireland that neither Ireland nor unionists -- pro-EU or otherwise -- want, and unionists still have a majority and the pro-EU ones are still probably more pro-UK than anything else. Brexit may increase factional tensions in NI, but it's unlikely to directly or in the near term lead to a consensus on independence.)

jkot 10y ago

I am pro EU, but this article is just garbage. UK already is tax heaven for rich.

alistairSH 10y ago
UK, or London? Serious question - the concentration of finance and money in the City of London makes me wonder if the city has some different rules than the rest of the UK.
- jkot 10y ago
  UK, city has some special rules, but those do not affect individuals.
- m_t 10y ago
  The City of London[1] is not London[2] and, yes, it has different rules. [1] https://en.wikipedia.org/wiki/City_of_London https://en.wikipedia.org/wiki/City_of_London [2] https://en.wikipedia.org/wiki/London https://en.wikipedia.org/wiki/London
  - alistairSH 10y ago
    That's why I was asking - I'm aware the City has all sorts of different rules because of it's history. I just don't know how those rules impact banking, finance, etc.
zhengiszen 10y ago
And it will be even more free to act as one, freed from the regulations and obligations that an EU membership demands.

mathattack 10y ago

It sounds like this is aimed more at companies than anything else. The UK can now offer tax deals that other countries can't. What's strange is this happens between states in the US. Part of it is differences in state tax rates, and part is a willingness to cut special deals to get corporate headquarters.

hocuspocus 10y ago
> The UK can now offer tax deals that other countries can't. This isn't so simple. If the UK wants to keep access to the EEA, it effectively won't.
- mathattack 10y ago
  Yes - my point is that the title suggests that it's about rich people doing tax arbitrage. The article is more about companies.

phillc73 10y ago

It's interesting that this article mentioned Ireland with regards to corporate taxes. I don't know the background to the Apple story noted in the article, but I am well aware that corporate tax is not standardised across Europe.[1] Ireland also has one of the lowest corporate tax rates in the EU at 12.5%. I'm about to embark on a new venture which will require a Limited company. Ireland is extremely attractive due to the low corporate tax rate and the ease of starting a new Limited company. The other good options are the Baltic countries, such as Estonia, but things are more complex in terms of initial capital costs and somewhat of a language barrier. Or go properly offshore. If the UK really wanted to become a tax haven for the rich, they would lower corporate and top personal tax rates. There are some plans to lower UK corporate tax from 20% to 18%, but it's still not really enough to entice many and lay claim to being a tax haven. [1] https://en.wikipedia.org/wiki/Tax_rates_in_Europe https://en.wikipedia.org/wiki/Tax_rates_in_Europe

pipio21 10y ago

ohhhhh nohh!!!!!!, just like Gibraltar? Isle of man? Jersey? British virgin Islands? UK is already a tax haven for the rich. Without it, "the City" wouldn't be the the City.

Bombthecat 10y ago

Even if, another tax haven. So what?