The Sunday Telegraph has reported:
A Labour government under Ed Miliband would be a “catastrophe” for Britain, the head of one of the UK's biggest businesses warns.
In a significant blow to Labour's general election campaign, Stefano Pessina, the boss of Boots, says Mr Miliband's plan for power is “not helpful for business, not helpful for the country and in the end it probably won't be helpful for them”.
So, a massively overpaid person who is based in Monaco, is ranked 103 in world wealth, who heads a company that left the UK to head for Switzerland and stripped the UK of significant tax revenue in the process, says Labour is dangerous and the Telegraph says this is a serious risk to Labour's election prospects? They really are clutching at straws if they think that is the case.
I am bored by billionaires telling us to do what is good for them, and I am certain I am not alone.
I, and I believe the people of this country, want politicians to stand up against this abuse.
And they want politicians to stand up against tax haven abuse by individuals and big business.
Will doing so harm the UK? No, not in a million years will it. What it will do is three things.
First, tackling the tax advntages the likes of Boots and tax haven exiles enjoy now will make the UK a more equal country, and that is proven to be of benefit.
Second, tackling those issues will raise the money to pay for essential public services.
And third, beating tax abuse by large companies will create the level playing field to ensure that all businesses in this country can compete on a level playing field where the quality of the goods and services they supply determines who succeeds, and the ability to avoid tax does not.
We win in each case.
If the people of the UK have any sense - and if the Telegraph had any sense - they'd realise that what Pessina is saying is that Labour is a real threat to the abuse, as I see it, of the 0.1%. I, and millions of others, would like that it be true that Labour will really stand up to these people and hope it can deliver on that promise. If Labour did this country would be a wealthier and fairer country and as importantly, one which was a better place for business to prosper.
WEe can all win, but only if we ignore the wishes of people like Stefano Pessina.
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I will add another moral failing to the list: ingratitude.
Boots’ favourable tax status, brass plate in Switzerland and all, happened during the last Labour government; it came about because of the regulatory capture of HMRC that happened on Labour’s watch.
The harsh words that you might overhear from Labour aren’t “Disgraceful!” and “His sort would say that”; it’s all “How *could* he?” and “After ALL we’ve done for him!”
It doesn’t seem to be what they are saying
what would the Conservatives say? The same as Richard? Or ‘we need to attract foreign investors’?
Richard,
Would an ‘exit tax’ help in alleviating this sort of corporate abuse, abuse which is rife among corporate and banking elites?
50-75% sounds like a nice healthy range for those seeking to remove themselves from the place that generated their success.
Illegal under UK law, I am afraid
Which is why I have poposed a US style passport tax
Did you mean EU law?
Doesn’t the National Grid Indus case tell us that exit taxes are OK in principle, as long as the tax is not charged immediately but deferred until the gain is actually realised (and not subject to interest or security requirements)?
You call that an exit charge?
Oh yes, I agree entirely. And other countries should follow suit. For instance, India could look at all those Indian citizens working in the UK on average UK wage (26.5k GBP) – they earn more than 10x average Indian wages of about GBP 2,400. Super-rich, they are! What a huge loss to the Indian treasury that they are not paying tax! Tax avoiders each and every one, so they are.
In India they would be paying about GBP 6,230 in tax on that kind of salary. But the UK is a tax-haven in comparison, so they are only paying 3,300 to the UK.
Just think about all the great social programs the Indian government could fund if it got the difference of almost 3,000 pounds per UK-resident citizen on average, and that just from income taxes.
And every time the Rupee falls against the pound, they can impose capital gains taxes on their UK pensions, savings and investments, cos they’ve made a Rupee capital gain!
If you read what I have to say on this issue ( and it pus easy to find) I suggest exemption from tax for those resident in a country with an equivalent tax system
India would qualify
But why not make it up?
“If you read what I have to say on this issue ( and it pus easy to find) I suggest exemption from tax for those resident in a country with an equivalent tax system
India would qualify
But why not make it up?”
I have read your works on the issue, and I agree entirely. Why should someone on average UK wage not pay double the tax due to accident of birth? After all, they’re rich in Indian terms and it’s only rightly paying the extra money where it is owed. And if the Rupee falls, they’re suddenly even richer and should pay more tax for the privilege.
But in any case, look at it from an Indian perspective – it’s not a question whether the UK considers India to be equivalent, but whether India considers the UK to be equivalent.
The UK has far, far higher thresholds, which makes it a tax haven from their perspective. So it’s only fair.
Plus, there’s all kinds of tax-free state benefits in kind available in the UK that could be taxed as income by India under their 2005 “fringe benefit” tax. Just think of the incredible wealth-transfers from rich to poor that would be possible if India deemed UK housing benefit taxable as income! The Americans consider European unemployment insurance payouts to be unearned income and tax it at unearned-income rates, so why not?
Think big!
I always think big
I can also spot people who are wasting my time
I’m not wasting your time – I’m sorry if suggesting you think bigger seemed rude. Anyway, the Americans follow your principle of “equivalent tax system” so as apply all kind of taxes to things not taxed in the UK, i.e. where the systems are not equivalent. Just recently Boris Johnston quite rightly paid US capital gains tax on the sale of his London property. As I mentioned before, US citizens in France pay US tax on their generous unemployment benefits. And US citizens almost everywhere outside the US pay income tax and capital gains tax on their tax-privileged retirement and education savings accounts, and on the co-payments into these schemes from their employers. So there’s no reason why should India not do the same in our hypothetical case.
Anyhow, I think you’re completely right to want to get rid of the pernicious fiction that taxes are in exchange for goods and services, whereas they should be for the privilege of belonging to a state and paying them is a social good in and of itself. If you belong to two or more, you should pay for that privilege, or renounce. And if the country won’t let you renounce (like Turkey, for instance) then tough. It’s a privilege to be allowed to go and live in another country, and this privilege should be paid for.
Plus, if such a system would do away with the disasterous Neo Liberal experiment of free movement of capital and people by making it financially difficult to move abroad, then it would go a long way towards reducing inequality.
OK, points accepted
I would not go as far asm you though
why “afraid” – don’t you like UK law?
I can’t be bothered to even go to se what you are referring to
Good piece.
Martin Rowson has a cartoon in Monday’s Guardian on the same subject:
http://www.theguardian.com/commentisfree/picture/2015/feb/01/martin-rowson-on-the-row-over-boots-boss-stefano-pessina-cartoon
That’s a good one
Didn’t George Osborne propose to impose a 25% tax on companies that artificially moved profits off-shore? Is that a catastrophe too?
my comments on the divertred profits tax can be found with a simple search
‘If the people in the UK had any sense’………….
Hmmmmmm………..
I don’t think there is any chance of Labour changing anything fundamental.
Nor does Pessina
So you are in the same camp
I am sure this is a point that has been made before but I feel is relevant to this piece.
We should ask the question, why are MPs of all parties not clambering to get the law changed to close the loopholes that allow tax dodging? Could it be that many of them are part of the problem?
At the hustings that will be taking place up and down the country in the next three months we should be asking all parliamentary candidates to make a statement to the effect that they do not hold offshore bank accounts. Or maybe there is a more pertinent question to ask them? If any of them refuse to answer, we can draw our own conclusions, and then make sure that the local paper reports their answers.
Please ask away!
Foreign national (Italian) resident in Monaco avoids UK tax how? He doesn’t owe any!
So why is he bothered?
Because his company does not want to pay tax either whilst enjoying all the UK has to offer
According to HMRC, ALL money in a country is tax, and therefore due to them. So, Richard, you are merely scratching at the surface of the problem.
HMRC should indeed raise an army of tax collectors, what they need is a snappy name, perhaps General European Special Trapper And Political Organization ?
What utter nonsense