Osborne "Shocked"

[Puppycow]

Osborne ‘shocked’ by rich tax dodgers

George Osborne, the British chancellor, has said he was “shocked” to discover that some of the richest people in Britain have used avoidance schemes to pay “virtually no” income tax.

HM Revenue and Customs found that some of the highest earners paid an income tax rate of only 10 per cent by using legal loopholes.

I'm shocked that the nation's chancellor would be shocked to discover this. But to be fair, he plans to do something about it:

In last month’s Budget, Mr Osborne pledged to tackle what he called “morally repugnant” tax abuses. He introduced a general anti-avoidance rule and a raft of measures in the forthcoming finance bill, designed to increase revenues by £1bn over the next five years.

Individuals will only be able to claim up to 25 per cent of their income or £50,000, whichever is more, from 2013.

Sounds like a good idea to me.
I wish that something like the Buffet rule would pass in the US, but I have less confidence that Obama can get that past congress.

 

[Cleon]

I can't help but wonder how long before that video clip gets spliced together with this one....

 

[Skepticemea]

Shocked? Rubbish. Akin to an ursine exclamation of surprise at finding its own scat in a heavily wooded area.

 

[Captain_Snort]

If he was shocked, surely this goes to show that he is utterly out of touch with reality, either that or just a massive lie to cover up his ineptitude. And on the back of lowering the top tax rate as well.

Tory scum.

 

[Mikemcc]

Perhaps someone needs to buy him a subscription to Private Eye - they've been covering exactly this sort of thing for years.

 

[Jaggy Bunnet]

The main methods included writing off business losses, offsetting the cost of business mortgages, and borrowing on buy-to-let properties.

Others took advantage of tax relief on donations to charity.

http://www.guardian.co.uk/politics/2012/apr/10/george-osborne-shocked-tax-avoidance?newsfeed=true

I don't get what is shocking about this - relief for losses and costs incurred in earning income are pretty standard to just about any tax system. In what way can these be considered "aggressive avoidance schemes" and "morally repugnant"?

Giving money to charity makes you a bad person?

None of these will be remotely impacted by the proposed GAAR (if it is remotely similar to that outlined in the report it is to be based on).

 

[Jaggy Bunnet]

Perhaps someone needs to buy him a subscription to Private Eye - they've been covering exactly this sort of thing for years.

Perhaps. But as Private Eye get their input from Richard Murphy then I suggest you take it with a very large pinch of salt.

Someone who regularly cites himself in various different guises (Tax Justice Network, Tax Research UK, "independent expert") should immediately ring bells and his figures are utterly bizarre. According to him the 50% rate would raise £6bn per annum - HMRC estimated pre implementation at £2.5bn and their report on the actual impact concludes:

"The conclusion that can be drawn from the Self Assessment data is therefore that the underlying yield from the additional rate is much lower than originally forecast (yielding around £1 billion or less), and that it is quite possible that it could be negative."

http://www.hmrc.gov.uk/budget2012/excheq-income-tax-2042.pdf

The only way you get anywhere close to his figure is if you assume that increasing tax rates has no impact on behaviour - nobody makes extra pension contributions, works less, moves abroad, delays crystallising income, etc.

 

[angrysoba]

Shocked? Rubbish. Akin to an ursine exclamation of surprise at finding its own scat in a heavily wooded area.

Or the Pope tripping over his own ordure in a grove and asking whether or not he had deposited it there.

 

[Skepticemea]

Or the Pope tripping over his own ordure in a grove and asking whether or not he had deposited it there.

Perhaps he could ask the bear in the funny... hat...

Are we getting confused here?

 

[Jaggy Bunnet]

Perhaps someone needs to buy him a subscription to Private Eye - they've been covering exactly this sort of thing for years.

More amazing insight from Private Eye this issue, discussing the impact the SDLT changes in the Budget will have on some commercial property funds.

That would be the SDLT changes that only apply to residential property......