Osborne's Non-Dom Policy Now Worse Than Darling's Policy
Polly Toynbee is wailing in her column this morning about the Chancellor's U-turn. She reckons it is the "FT Wot Won It" and that Digby is Jones is the Thatcherite vetoing policy in Brown's Big Tent. On one point Guido is in agreement with her; Labour claim they will take £650 million from non-doms, while the Tories claim they will squeeze them for £3.5 billion. Labour will tax them only after they have lived in Britain for seven years, whereas the Tories will tax them from day one.
So won't the Tory policy drive more globally mobile wealth creators out of London? Isn't Osborne's policy worse for the City and more punitive?
So won't the Tory policy drive more globally mobile wealth creators out of London? Isn't Osborne's policy worse for the City and more punitive?
36 comments:
yes
Osborne OUT
Fallon IN
So exactly HOW to all these people who pay fuck all tax benefit the rest of us who pay huge amounts of tax (in return for fuck all)?
Inquiring minds want to know.
And in the words of the regular caller to "Down The Line" ...
What is point Toynbee?
I don't understand it either. I see no reason for a tax break for anyone living here. The so called non-doms live here largely because they can earn their living here, mostly in the city.
Non-doms are not going to leave this country if they have to pay full tax on their UK earnings, most cannot earn their living elsewhere they have to follow the money and the city of London is here. The city of London is far to big for a few well paid people to threaten.
Guido - aren't you assuming that Osborne ever had a "policy" as opposed to a panic attack the night before the Tory conference?
The most crucial and worrying point of all this is that we have the weakest Prime Minister in living memory. He has already ordered his puppet chancellor to make two stunning climbdowns, in the face of loud and determined opposition, within the space of just a few months.
How do you think this looks on the international stage? World politicians and business leaders look at the UK and wonder just who the hell is running things.
There is no stability just uncertainty and weakness at the top and that is going to be disastrous for this country as we have a government that can be pushed around and bullied. Things will only get worse so long as this cowardly, dithering clown is PM.
It's leapfrogging... you'll see Tory policy change when it's politically expedient for them to do so... ie when it doesn't look like they're copying anyone.
"So exactly HOW to all these people who pay fuck all tax benefit the rest of us who pay huge amounts of tax (in return for fuck all)?"
They spend huge amounts of money on Chelsea footie club. Sadly it is mostly spent on foreign players who are also registered as non-doms.
Osborn has neatly skewered Darling and NuLab policy and made them look like the morons they are.
As for his IDEAS, the're not policy yet, they can always be revised after consultation!!.
As for Polly, can't someone gag the old bitch.
"Osborne OUT
Fallon IN"
Please no. Fallon is obsessed with cutting taxes at a time when the country is £700bn in debt. He knows fuck all about the economy.
We need someone that realises we desparately need to cut costs and find a way to write off most of our debts. Sadly I don't see it happening, so things are going to get much worse. I can really imagine civil war breaking out in the next 10 years. So I'm opening a Swiss bank account in a couple of weeks time and making sure we have somewhere to run.
Maybe things won't get that bad but that's what the Jews were saying before the Holocaust. I'm not prepared to take the risk, especially as my wife is Asian. My wife knows all about fleeing countries that start turning against each other - that's how her family ended up here. So we will make some preparations just in case and watch events unfold.
Don't say "it couldn't happen here". The Germans are far more civilised than we are but it didn't stop them giving millions of people the Zyklon B treatment.
"[B]een overtly Tory propaganda. It's extraordinary how the rightwing press has failed to savage Tory plans to tax the non-doms until their pips squeak. The Tories stand by smirking and jeering, shielded by their press."
[from Polly's article]
She is pissed off because the FT has been nasty to Labour, but it hasn't been nasty to the Tories, even though the Tories' policy is more punitive than Labour's policy.
In 500 words (which appear not to have been proof-read, incidentally) of pure Tory Derangement Syndrome and badly-researched spleen, she prattles on and on about how unfair it all is, blaming the "rightwing" press, the Tories, Digby Jones, the City, cheese-makers and the FT for having the audacity to criticise the government's policy; a policy that the government cribbed from the Tories and made up on the hoof.
This is a typically ham-fisted error of the government's making and Toynbee attacks everyone but, er, the government. She attacks those who attack the government instead; and anyone who attacks the government must be "rightwing" and 'a Tory'.
And therein lies the rub: Labour is in power, baby. Sie verstehen? If the Tories were in power, they would no doubt face severe criticism too, but they're not.
Labour are in power. L-a-b-o-u-r. It's 2008, Pol, not 1981; Ashes to Ashes is fantasy and not real-life, contemporary drama.
Breaking news, Polly: Thatcher is no longer in power; she was booted out 18 years ago. The Tories have been in opposition for eleven years. You're safe.
Calm down, Polly. Have a nice cup of tea and talk about your mother.
"Non-doms are not going to leave this country if they have to pay full tax on their UK earnings"
They already DO pay full tax on their UK earnings. All the current rules allow them to do is not incur any liability on overseas earnings unless they bring those earnings into the UK.
Guido you are insane,
perhaps the goverment should not tax anyone in case they should leave the country.
they want the benefits of our country then like the rest of us have to they can damn well pay for them.
the tories actually have a vote winner here for a change!
It's a poll tax by any other name, and look what happened the last time someone tried to instigate one of those.
Yes, Tories are up the creek on tax and spend. Their policies are irreconcillable with their own philosophy and basic common sense.
The basic argument is that tax should be minimised, NOT maximised. Nuliebour temporarily 'won the argument' on maximising tax. Now that has been revealed as completely stupid the Tories (the opposition generally?) need to get back to the minimising tax argument ASAP. This is a credible altenative policy (Policy? Hah! It's just sense).
Sure, there will still be arguments about redistribution, but as that has also been seen to fail completely under Nuliebour (as it always does) we need to discuss how transfer paymenst can best be used to benefit those less financially fortunate or just plain unlucky. Anything would be better than the current system of benefit enslavement that the flawed 'project' Nuliebour has fostered.
Remember, PAYE is not a tax on earnings but a tax on employment. It's set out as income tax but it acts as an employment tax. So, if you cut PAYE you get more jobs. Consequently if you introduce it you get less jobs.
We should not be arguing about adding tax to non-doms but how we can stop taxing everyone else.
But, since this fiscally incompetent government has run out of money they can only go after those who have stuff that cannot be easily moved. Yep, the middle classes, or in fact anyone that ownes a house - 70% of us. If you've got 'stuff' they've got you by the short hairs.
And the other myth to overturn is that cutting taxes leads to cuts in public 'services'. Have they never heard of 'efficiency'? Anyway a whole slew of Government 'services' are (a) nothing of the sort and (b) if they are they are just crowding out more efficiently deliverd private alternatives.
So, as far as I am concerned the whole non-dom argument is another Nuliebour diversionary tactic which the Tories should never have got involved in.
If nondoms don't like it, they can go elsewhere. Britain will be a better place without them skewing the economy even further into fantasy island luxury for the few, and squalor for the rest of us.
Osborne's attitude would further encourage me to vote Conservative next time around.
As for the City needing the nondom freeriders - rubbish!
http://elliottjoseph.blogspot.com/2008/02/non-dom-nonsense.html
in the case of Labour policy `the tail is wagging the dog!`
A couple of things guys. Non-dom taxation regime is a historical abberation and is a difficult one to address. Like any sop, however unfair it might be it is hard to take it away because people dont want to give up good things. No matter which new structure you apply it will be unpopular.
As for fairness, how can a levy be fair when it is the same if your assets are worth £20b or £200,000? Also, if the fairness question is advanced to its logical conclusion then why not have a referandum and see if London wants to remain a part of the Union and see what people really think about subsidising non productive masses of the NE or NW (....enter your prejudice here). Afterall, if the city generates most of the tax revenue for the whole of the United Kingdom they should have a say in how to run it.
Livingston for President! (...oh hold on..!)
Osbourne and Brown
Both trying to get a quart out of a pint pot.
"I can really imagine civil war breaking out in the next 10 years."
Seems an awfully long time to wait.
The self-serving waffle of Polly Toynbee reminds me why I stopped reading The Gruaniad so many years ago.
In The Grauniad it is forever ten to fifteen years in the past.
"So won't the Tory policy drive more globally mobile wealth creators out of London?"
Surely hideously thick twats from the US of A who have been doing their best to export America's greed-is-good short-termism and risk-blind hedge fund speculation to these shores ?
If so, then the sooner they fuck off back to the land of the free and are forced to clear up the shit their banks have created Stateside, the better for all concerned.
Masters of the Universe ? Rocket Scientists ? Over-paid, Over-rated and Over here more like ! If they are so talented, how come the likes of JP Morgan Stanley Chase Manhattan Lynch are flushing huge amounts of cash down the sub-prime toilet ? How come the dollar is in free-fall ? Traders are nothing more than glorified barrow-boys, however much they try and dress it up, and obfuscate their real role with made-up jargon.
These people don't 'create wealth'.
Speculation and re-lending the deposits of your previous lending don't count as wealth creation - they are just an optical illusion, which is very effective in good times.
But as the credit crunch, and industrial levels of home repossessions show, it can disappear just as quickly. Yet you seem to be trying to blame the Government ? It is the lenders who are to blame ! If the Government had tried to rein in their excess exuberance, you, GUIDO, would have been the first one to shout that this was reining in people's personal freedom and liberty and quoting your heroes Maggie Thatcher and George Soros that 'You can't buck the market'.
What fatuous superficial bollocks you do talk ! Luckily most of the readers of this blog couldn't stretch to any more reasoned intellectual analysis, so I guess that is just as well...
Like others I have yet to be convinced that these rich city boys actually bring any benefit to London/UK. Yes the lap dancing clubs & drug dealers have done well, but what about everyone else?
I don't work in or near the city, I am not in the banking/finance business, I have a normal uneventful 9-5 job. How will *I* be affected if the super rich leave?
From what I can see all they do is massively inflate the housing market and prevent people of real value getting to live within 100miles of the bloody city they work in. Personally I am not convinced they would all up sticks and leave - and if they did would it really matter?
And surely that is what most of the public will ask? All they see are a bunch of spoilt, greedy, over valued whingers. We are not all economists, all we can see are rich people who are not paying their way.
Of course lots of this is dependent on HMRC's ability to actually assess and charge tax to these people. After all these years of serrving the snot gobbler almost directly whilst he's shit in their faces in return, morale and competence are at an all time low. Osborne or (Fallon - who needs to lay off the pies judging by the photos) will struggle to subdue these unruly savvy non-dom fuckers, Here's an example of HMRC's current fitness for purpose. The great data loss episode has apparently reduced them to the point where letters longer than one page are banned.Individuals who filed 2007 tax returns online, and ticked Box 23.1 (which states that the person does NOT want any outstanding tax due to be collected through their PAYE code) have found that the tick has been ignored due to an HMRC systems error. These people each received the December Statement of Account and saw that the outstanding tax was not shown as due for payment on 31 January as they asked, but that, in spite of their request, it will be collected through an adjustment to next year’s tax code.
The Institute of Chartered Accountants asked HMRC to correct this error automatically since having e-filed their returns, taxpayers would expect their wishes to be actioned. Unfortunately, it seems that HMRC is unable to do this for a variety of reasons (but mainly because most of the people in management at HMRC are bone idle, arse-licking, incompetent masturbators who are not fit to shovel shit), despite the fact that they can clearly identify those individuals effected to explain that unless they contact HMRC, their tax will be collected through a PAYE code adjustment. They have also reminded taxpayers of their right to claim compensation for any additional costs incurred as a result of an HMRC error. So they know what the problem is, who it affects, but you have to put it right for them and they might pay you compensation if you beg hard enough.
HMRC have condescended to write to some of the taxpayers affected by the problem with non recognition of a tick in Box 23.1. These letters were sent out although only those with an outstanding tax liability over £500 will have received a copy. So all these other poor twats weren’t told about the compensation on offer – “where there’s blame there’s a claim”. Unfortunately, HMRC were unable to send copies of this letter to agents (many of these taxpayers have agents, mainly because the tax system is so complicated that it makes your arse hurt)
The content of the letter which was eventually agreed was something of a compromise. In order for it to be sent out in early January at all, it had to fit onto one page because of the data security embargos which would have affected a longer letter. Whilst it did at least alert taxpayers to the problem it did not refer to the payments on account regime. If a tax liability is coded out, there is no payment on account required, but if a client simply follows only the advice in this letter they may not realise that they had also to make a payment on account. If they missed the 31 January deadline for this, they will later need to pay interest. The Instiute of Chartered Accountants believes that it is doubtful that even with a longer letter, this would have been clear to a non tax specialist.
Do let’s bear in mind that the runny-arsed , drooling, maladjusted, despicable, stinking bags of rancid piss who dream up tax legislation do so because it’s the only way they can get a sexual release and then only with a plastic bag over their heads, an orange in their mouths and a gerbil up their arses. So it’s no surprise that they’ve passed a law that if HMRC make a mistake, that’s tough shit, but if the taxpayer does so they impose a penalty of the same amount of tax again. In Lancashire it’s called “double bubble”. Fat Gordo would probably think it means what happens at the end after he’s applied the great clunking fist to the bishop, but he’s wrong.
And by the way, what sort of psychological and behavoural problems must have been affecting the person who dreamt up “great clunking fist” as a compliment?
Non-doms pay Uk tax.
They just don't pay tax in the on their money which is elsewhere.
Leave them alone. Their work is legal, and less damaging than Darling, Brown and the gang.
Leave the bigotry to The Clapham Castro.
It doesnt matter. Osbourne isnt in power.
Would all the envious non-nondoms PLEASE read mark, and learn from anons @ 10.21 and 11.03, who understand these matters?
As an ordinary bloke, with an ordinary business and paying tax, I really can't see why you think it's so wonderful for a whole bunch of city boys to get away without contributing their share too.
I can't help noticing that you seem to have a real thing about the non dom issue Guido... anything you'd like to 'fess up here?
People are still confusing hedge fund success with capitalism. The prime (sub-prime?) reason why PE/Hedge Funds etc were able to make their heavily geared deals was because (a) fiscal policy had money too cheap, and that's down to Brown and (b) a stupid tax system that has become to stuupendously complicated that pretty well everyone needs and accountant - and that's ignoring the similar problem with the benefit system - which is also down to Brown. Capitalism, or rather anglo-saxon libertarian capitalist free market society with compassion, just works. It is not an -ism.
Non-doms pay tax - they just do not pay it here.
This non-dom tax is just an envy tax. It's political. It's designed to get the public to hate someone else rather than the Government. It won't raise any revenue and Darling Brown know this, but it is a successful 'political' policy to identify a minority that the populace can be encouraged to envy and therefore hate and blame.
The very fact that we are spending all this time discussing it just shows how successful they have been.
So, to get back to the point, the Tories were daft to dream it up, except that it has put Nuliebour on the hook - a bit. The opposition now need make the rational case that levying a poll tax on Non-doms is unfair as they are being taxed twice, and expanding the argument as to why the whole city cheap money boom thing is McFuckingBeans fault and we may get somewhere in getting shot of this functioanlly useless Governemnt and the incompetent cunt that's currently PM (I was going to say 'leading' it - but really....)
G - you're mission the point. Osborne's policy was £25k - offsettable against US tax - and no more questions asked or attacks on your tax status. Darling's fiasco was £30k and by the way can you tell us about a, b, c, d which we may well tax, perhaps retrospectively. That was what was so damaging.
Non-doms, con-doms - I don't know whether I'm coming or going
Sorry to get all educational on you guys who are generally very well readd. I hear the "what have the City boys done for us" chorus. The answer is, it depends. I also hear the chants "What have the City boys done to create jobs". There needs to be some explanation.
It is oversimplification to say the Non Doms pay tax on UK income and thats it. Doms or non doms pay tax on UK as well as Non-UK income. Now pick your jaw up from the floor and listen. If you are a UKN (UK Non-Dom but resident) you will pay tax on any income UK or Non-UK unless you are able to justify that the income overseas was generated by 'non UK activity unrelated to your UK employment'. For most of the City boys who work from 7am to 7pm 6 days a week for a fat salary and a fatter bonus (envy control requested) it is hard to prove that any of that was generated from ....'non UK activity unrelated to your UK employment'.
The way b(w)ankers deal with this by having two contracts even with the same company clearly separating roles for UK work and overseas work. This, however, can only apply to those City boys who actually do some work outside of the UK and generally only applies to the income in proportion to how much time they spend outside of the UK. So HMRC is not completely stupid about squeezing money out of these boys and disqualifies non UK income of most of the City boys (This might explain why there are only 110,000 UKNs in the whole of the UK).
Now for the next lesson:
Has anyone heard of Capital Gains. I am sure those among you who have actually created value and not sucked off value off your employer will have heard of this creature.
Most of the taxation which is 'missed' by HMRC due to current UKN situation is capital gains. This is because if capital gains occurs outside of the UK to a UKN is outside of HMRC's perview until they are brought into the UK. This is the real problem. Most of the calls you have heard for limiting the new policy comes from those who generate capital gains abroad. So when people talk about losing the enterprise culture they are NOT referring to the City boys because they wouldnt know enterprise if it hit it in their faces.
Here is what really happens. If you are UKN and you find yourself in a situation where you could take a salary (income) which will be taxed to your tits or capital gains which you can shelter abroad you choose capital gains or a mixture of the two. This means that they end up taking greater risks (capital gains = never certain). This is not too different from the taper relief on capital gains which was handed by Brown at the begining of his job (and now scrapped). So all those who opposed the scrapping of preferential treatment of capital gains for UKDs should principly be agains the UKN change.
Now, why is HMRC so mad at the current UKN rules? Because they are misused by a lot of UKNs in several ways:
1. To bring capital gains which has arisen overseas into the UK under the cover of offshore trusts etc.
2. To use overseas structures to colour UK capital gains (which should be taxed) to non-UK capital gains ( which is tax free)
and worse
3. To do 2 above followed by 1 and making a mockery of the HMRC.
So the bottom line is that something needed to be done but what really happened was:
You get a bunch of clowns who have never come up with a good idea (Tories)and have another set of jokers who could not deploy a garden chair properly to deploy it (darling et al).
The proposal of charging £30k stinks for several reasons. The one that stinks the most is this:
Why £30,000? Why not "28,478.99?
I'll tell you why and this is applies to O'fool as much as the D'fool.
Step 1:
Take the size of the hole you have in your tax revenues for next year in £. = a
Step 2: Divide number from step 1 / the number of Non-doms likely to pay up to get a number in £ = b
Step 3: Use nuber derived from step 2 and announce it. a/b=x
Every year, repeat stps 1 to 3 until 'a' becomes huge as the economy goes down the tube and 'b' becomes miniscule as the UKNs find loophole, leave country, die, lose job etc, now think of another group to screw.
The only proble is that the next time = IT COULD BE YOU (maybe,...just maybe)
(apologies to the National Lottery - my favourite tax on stupidity)
Who gives a fuck about Osborne's policy anyway? It was only invented to scare off the witless Brown from calling a GE when he was riding high in the polls, and to that extent it worked like a charm. Hilariously, Brown is now looking an even bigger berk cos he thought he was being oh-so fucking clever in stealing it. You blew it sad boy! Master political strategist my arse!
I wish Toynbee was a non-dom. Then we could tax her out of existence.
What I want to know is, if all these foreigners are paying no tax in the UK, why I'm taxed to the hilt on my pathetic pension wherever I live in the world.
Except, of course, to pay for the likes of Conway, Martin and Livingstone's friends.
there are far too many chancers in the city. thinning out these shysters will do no harm to the economy.
charging from day one is an excellent idea. it will chase away the freeloaders and mean only genuine and well intentioned contributors remain.
a far better proposition than labour's half assed idea.
let's stop fucking about eh?
The answer to the original question is that Osborne is missing the point and could raise more taxes without damaging the economy.
The point that is missed by most commenters is that the £25,000 minimum tax/£30,000 "fee" is only part of the story. More significant for most of the non-doms is the inclusion of capital gains on UK based assets held through offshore trusts.
According to the FT 50% of Asian millionaires that they questioned said they were planning to leave. The millionaires they questioned had a combined net worth of £1bn, but total assets of £25bn.
Hmm..96% gearing. What does that sound like? If you ask me that looks more like highly geared property portfolios than "real businesses" that create jobs.
£24bn of the £25 bn of property would be funded vy oinshore banks anyway. The non-doms would be looking for tax-free gains on their portfolio, and they would be just as happy to move offshore to keep their tax free status.
If 50% leave the UK economy loses not very much (the £25bn of property stays in the UK), but the government collects tax on the gains of the other 50%.
The big losers would be the tax advisers.
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