Businesses respond to tax havens investigation
In light of The Times investigation into tax havens, The Parliamentary Review spoke to a series of businesses involved in the finance sector.
An investigation by The Times last week found that one third of UK billionaires now lives in tax havens, with nearly half of them relocating in the last decade.
It was calculated that 6,800 UK citizens are now living in tax havens, while still remaining in control of 12,000 British firms.
Jonathan Amponsah from The Tax Guys responded to the news stating: “It is no surprise that a third of British billionaires have moved to tax havens.
"In the last two years alone I have witnessed half a dozen clients moving offshore and changing their residencies (with Portugal becoming a popular destination) in order to enjoy the fruits of their labour.
"The complex UK tax system and recent changes to both income (dividends tax, property tax and IR35 rules) and capital taxes have meant wealthy individuals are taking bold measures to keep their hard earned cash.
“While the UK remains competitive for corporate taxes with generous tax incentives including research and development tax credits, more needs to be done to stem the outflow of wealth out of the UK."
The investigation also uncovered that many of those living overseas have continued to donate significant sums to political parties in the UK.
Lord Ashcroft, who lives in Belize, was found to have donated £500,000 to the Conservative party in 2017, while a total of £5.5 million worth of donations has been accepted by UK parties since 2009.
Although the 2009 Political Parties and Elections Act excludes donation of more than £7,500 from individuals living outside the UK for tax reasons, the investigation suggested this had not been enforced.
Speaking to the the Review Anil Bhanot from Bhanot & Co said: “Large political donations have a lobbying influence on party policy and the legislation has got it about right that any donation beyond £7,500 should come out of taxed income in the UK.”
Summarising the situation, Matthew Fleming-Duffy from Cherry Mortgage and Finance concluded that it presents a tricky situation.
He added: "I know Theresa May has a difficult job, full stop; but it is certainly of public interest to understand where political parties receive their funding. There are very rich individuals that are living as tax exiles while also directly seeking to influence politics in the UK and this requires close scrutiny; what do they personally have to gain by making these significant donations? Considering what happened with Brexit - when many people chose to vote against elites represented in Brussels - I feel the population will want to know that our own politicians are not just influenced by the rich.
"It is questionable behaviour and it is relevant that this type of funding receives close scrutiny. A political party receiving large financial gifts – particularly if they are already well funded - will probably have the best show in town, and the biggest advertising budget will have the loudest voice; hence the Conservatives should expect questioning when it comes to this type of funding as they receive the most. By comparison, Labour seem to be generating a substantial mass of their funding by way of small donations by a large numbers of individuals – which may seem, on first inspection, to be far more palatable.
"Having said this, there is another side that needs to be considered; if an individual lives outside the UK but still employs UK residents and creates revenue that is then spent in Britain, then perhaps they have a right to seek to influence decision making by showing support for their chosen party. Regardless of where you stand, there needs to be a forum for discussion and we need to be able to judge each situation on its own merits. Striking an acceptable balance is difficult however, and I truly feel sympathy for Theresa May in this situation.”