A tax battle that the government won’t be able to avoid

Axstane

Labour also used windfall taxes and penalty taxation on bank bonuses as instruments.

The USA does this regularly.

Needs must when the Devil drives.

telemachus'

I guess the pity is that it was not Gulliver's Bank

tom jones

I actually think it's brilliant news and I'm getting just a little bit sick of hearing about the poor, poor massively wealthy who must have it so hard with only 2 or 3 mansions and their 7 holidays a year. Let's stop defending businesses and wealthy people who exploit the tax system and let's start making sure we are actually "all in this together." The government is much more on the side of the public than the right wing of our party who seem to defend the rich over any other group. I believe in lower taxes on income, but on higher taxes on wealth and property. Some people are stuck in the 1800s and it's depressing!!

Russell

The "wider argument about which tax systems are best for growth that is already simmering in Tory circles." needs escalating in my opinion.

Best for growth for business or best for growth for taxpayers? Both are not necessarily compatible.

Allowing businesses to carry on increasing profits year on year will benefit owners, but may or may not benefit shareholders or taxpayers who are 'subsidising' these businesses.

Narrowing the gap between the filthy rich and the poorest, ensuring overpaid so called executives in public sector organisations are dispensed with and reasonable salaries are paid by the taxpayers could also be regarded as growth in terms of fairness.

Nickle

And they will no doubt scream and scream until they are sick, when Barclays or HSBC say, so long, and thanks for the fish, we're off to Hong Kong, or New York, or Zug, ...

Russell

I would hope if Barclays or any other Bank or Insurance Group leave the UK for tax purposes, their current customers and account holders will become their ex customers and withdraw all their funds.

Publius

"but — on the principle that ‘every little helps’ — it also hammers another few chips from the deficit."

Actually this will help pay for the newly announced free HIV treatment for foreigners.

In fact, once word gets round, I suspect there'll be a lot more funds needed for this latest act of generosity. This is, after all, why we all pay tax, right?

rosie

I don't think somehow we will be getting retrospective legislation to claw back money from the creative tax arrangements of all those priggish left wing employees of the BBC who are classed as self-employed.

rosie

"Allowing businesses to carry on increasing profits year on year will benefit owners, but may or may not benefit shareholders or taxpayers who are 'subsidising' these businesses."

The main way we subsidise business is by paying tax credits and for the welfare state in general. A whole lot of extra welfare was thought up by Brown to conceal the damage being done by mass immigration driving down wages and generally impoverishing the unnaturally growing population. Of course this general impoverishment and overcrowding still doesn't affect the people living in the charmed circle of SW1.

Ian Walker

HMRC inspectors define 'very wealthy individual' as 'someone who earns more than me'

They will use any additional powers to go after the wealth creating small business sector, just as they do with everything else, because they're easy targets.

ellis000

How did it come to this? An organ of the right seemingly populated by lefty trolls all extolling the politics of envy. Companies and rich individuals who make money pay the taxes that support everyone else. Making it harder for them just drives them away - fact. Idiots who call for increased taxes on HSBC, bankers' bonuses and the rich are invariably: Toynbeeite champagne socialists, or, recipients of the state's largesse. The idea that the rich should be squeezed 'til the pips squeak was discredited in the 70s. Why on earth is it getting credence now?

starfish

"And they will no doubt scream and scream until they are sick, when Barclays or HSBC say, so long, and thanks for the fish, we're off to Hong Kong, or New York, or Zug, ..."

And then the govt could say they will refuse to do any banking business with Barclays or any of its subsidiaries.....

And maybe call in HMRC's accountants for a really good look at Barclay's books - and the personal tax affairs of the hierarchy

James Strong

I deeply disagree with the ideas behind this article, and some of the comments.

First of all there is nothing at all wrong with tax avoidance. It's legal.
If you want to reduce tax avoidance, write a clearer and simpler tax code.

Second: 'this case is complicated by the fact that the law has been changed retrospectively, precisely in order to secure that half a £billion from Barclays'

So the law has been changed to make an action that was legal at the time it was carried out illegal. I think that is exteremely dangerous to every law-abiding citizen in this country.
And it's law targeting one specific company's action; law should be of general applicability and knowable at the time of the action.
Anything else is tyranny.

I am appalled by this.

I'd be interested to read why anyone thinks this is OK, and then where they are going to draw the line.

MilkSnatcher

Dear Starfish (3:47): a country that goes to war with its wealth creators like this is called....the Soviet Union. Even Ed Balls in office admitted that they could collect 97% of all tax due, it's just that no one would want to live here.

I guess it's okay to take that attitude if you like envy politics or class war. Both lead to poverty, if not for you then for the next generation.

Fergus Pickering

Ellis000, the idea was not discredited. Denis Healey found it impossible to do - not the same thing at all.

ellis000

Fergus. What on earth is the difference between'discredited' and 'impossible to do'? The fact is, if you tax too much, as was the case in the UK in the 60s and 70s, the wealthy leave and no new wealth is created.

Chris lancashire

From the facts as reported I think Barclays were quite wrong in what they were attempting to do. That said, retrospective legislation is really not on, once you start down that path trust in government declines rapidly and business confidence evaporates.

Dominic Allkins

@James Strong

I agree entirely.A very slippery slope indeed.

Magnolia

Osborne has form with 'retrospective' like the retrospective change to the inflation indexation of pension payments at this moment in time. Such payments being based on agreements made several decades ago. This has been portrayed as hitting rich 'public sector parasite' elderly widows of long dead 'sponging' doctors but the 'default' principle is the same. GO likes bending the law to his will to pay for Euro bailouts or any other little bit of spend that takes his fancy.

alastair harris

the retrospective bit is more than just a precedent. Certainty is an important principle - something is either legal or not. But in this case something which was legal is now not - its not a court interpreting a legal point, but rather parliament changing the rules retrospectively. Is this really a power we would want our government to have over us? Bashing the bankers might be a popular sport now, but worth remembering where a lot of the tax pennies come from.

Russell

I am as far away from a 'leftie troll' as is possible, yet I see no reason why an individual should have to pay 20% income tax on £17000 of their earnings, then 40% on earnings after that to £150,000 plus appropriate NIC and a Business shouldn't have to do likewise.

How about businesses paying income tax on their profits in the sameway that all paye workers have to pay. A much simpler tax system and one which could not be fiddled.

Tim Robinson

@James Strong

I agree totally. Making things illegal retrospectively is absurd. How will the citizen know what is or is not permissible if this sort of thing continues. My libertarian blood is slowly heating up.

GeoffH

"Allowing businesses to carry on increasing profits year on year will benefit owners, but may or may not benefit shareholders or taxpayers "

Uh?

Who else owns business if it's not shareholders or taxpayers in the case of RBS and the like?

Russell

GeoffH

Uugh?

Individuals and partners own businesses as well as shareholders and taxpayers, not all businesses are ltd companies etc.
Many millions of self employed run their own 'business' and manage to hain advantage due to the tax system and capital gains, dividends etc.

Uugh?

TomB

Tax avoidance is legal; tax evasion is not. It bothers me that this distinction is being blurred. Barclays took advantaged of what was legal. Retroactive changes to the law are dangerous.

David L

Fair enough for HMG to close the loophole, but retrospective legislation is quite wrong, both in principle and in the precedent it sets. Black mark for the Government.

Minnie Ovens

"it also hammers another few chips from the deficit."

It's a small point, Mr Hoskins, but you make it sound as if Mr Osborne is working hard at balancing our budget when he is doing little to ameliorate our disastrous financial position.
Could this government please cease thinking it is a government of Empire.
Will it stop its voracious squandering of borrowed cash on its own egotistical dreams which have little to do with the British people?
Will it ever understand that less government means more liquidity that can be utilized by the private sector to grow the economy?
Mr Osborne had five years to pull this country out of the dark place into which Blair and Brown pulled us both financially and morally.
They had a great precedent set only 30 years ago yet chose to ignore it.
I despair. Morally and economically we are at the nadir. The Coalition has been a lesson in hypocrisy, vacillation, weakness and greed for power, for power's sake.

Mr. Green

I participate in a clever tax-loophole devised for tax-avoidance purposes: I gave up smoking.
I am now waiting for a knock on the door by the UKSSR police.