A spoof celebrity gossip magazine sending up how the wealthy manage their taxes to pay less has been published by the Trade Union Congress (TUC).
The magazine – Kerching! A Celebrity Guide to Tax Dodging – list the 10 most popular ways the wealthy and companies bypass tax laws, alleges the TUC.
The articles explain how offshore trusts and offshore financial centres like the Bahamas, Mauritius and Panama can minimise tax for individuals and companies.
The aim of the magazine is to highlight tax disparity between ordinary workers and the wealthy and to urge people to sign up to a petition calling on Chancellor George Osborne to do more to close tax loopholes. Petition link here www.tuc.org.uk/kerching
Top tax tips from the TUC
Among the top 10 tax management tips, the TUC claims the favourite are:
- Paying income in to an offshore company or trust in a financial centre like Liechtenstein and then lending the cash back to a director or trust beneficiary who pays interest on the borrowed money but never settles the debt.
- Sports stars pay image rights in to companies they own and then borrow the money – paying less tax through the company than they would have as tax on their salary
- Super-rich husbands or civil partners can divert income they should be pay tax on to their wives or civil partners
The TUC also claims domicile rules help the wealthy manage their taxes by letting them live in the UK while claiming residence elsewhere – which is the country where their income is sent.
Kerching! claims anyone spending less than 90 days a year in the UK can claim to be non-resident, and because the definition of a day for tax purposes is open to interpretation, top earners can be in the UK for up to four days a week, 40 weeks a year, and still pay less tax.
Billions of pounds lost
TUC General Secretary Brendan Barber said: “The overwhelming majority of people in the UK have little choice over the amount of tax they pay and unlike big corporations and super-rich don’t have the means to employ expensive accountants to help them avoid paying their fair share of tax.
“Each year billions of pounds which the super-rich should be paying in tax leaves the country and is lost to the public purse. Meanwhile the government’s insistence that rapid spending cuts are the only way to reduce the deficit, no matter what effect austerity is having upon the UK economy, means that it is ordinary families who are suffering, while those most able to afford to pay more get away virtually scot-free.
“The Chancellor has said he finds tax avoidance morally repugnant – so do we and that’s why we want him to act. Closing down the multiple loopholes which the super-rich and their accountants jump through on a regular basis could make a huge difference to our public finances.”
Read the magazine here http://www.tuc.org.uk/tucfiles/368/Kerching.pdf