Reports from London have shown that nearly a third of the billionaires located in Britain plan to or have already moved to areas considered tax havens. In addition to this sudden shift, there is also talk of an investigation into political party bankrolling from those that have chosen to relocate, as well as the delay in a vote involving the end of secret company ownership in offshore territories.
According to the Times news, 28 out of the 93 recorded British billionaires have been found through public record to have moved or been in the process of moving to a tax haven within the last decade.
Tax havens are locations in the world in which taxation is extremely light or sometimes even non-existent. Examples of these are the Channel Islands or countries like Switzerland and the United Arab Emirates that pay little to no tax.
This shady system of using tax relief in these areas to avoid paying for certain income based taxes is something many big corporations and the rich have utilized in the past. While it is not yet illegal to use a tax haven in such a way, more countries are cracking down on what should be acceptable when it comes to tax evasion in this manner.
Margaret Hodge is a leading lawmaker from the Labour Party who has been an avid supporter of increasing tax haven measures and is a co-sponsor for the proposed legislation that would help by ending the ownership of secret offshore companies.
Hodge states, “We must stop tax evasion so that the wealthiest pay their fair share.” And continues on to say that, “Public registers and more transparency are the next big step for fairer tax.”.
The reports about the many vacating billionaires were discovered only days after the government decided to delay the vote for Hodge’s proposed legislation.
Out of the 28 British billionaires dreaming of tax relief, nearly half have left Britain in the past decade. One example of someone still allegedly in the process of moving to a tax haven is Jim Ratcliffe, who owns a chemical firm valued at $46 billion and is Britain’s richest man. He is also a known supporter of Brexit. That being said, when asked about this situation Ratcliffe stated to the press, in October of 2018, that he would be staying in Britain.
The alleged reasoning behind the substantial moves was an attempt by big business owners to avoid paying the relatively high 38.1% income tax on dividends. There was also motivation from the increase in income tax rates for top earners to 50% in 2010 that was reduced to 45% in 2013.
While this move as an attempt at tax evasion is a concern, an even greater issue is the allegations of the political contributions that these business owners have made. In the past decade, business owners and companies that are said to be participating in tax evasion have contributed 5.5 million pounds into politics. Prime Minister Theresa May’s conservatives, in the months leading up to the 2017 snap general election, accepted 1 million pounds from these entities.
While there was an attempt to enact a law in 2009 that would ban large donations from any individual, they discovered were residing abroad for tax purposes, the UK government failed to properly see it through.
Despite their alleged desire to avoiding paying their dues, several of these British billionaires have been given such honorary titles as knight, baron, and dame.
Those who are interested in gaining more information about cases like this, or who want to keep up-to-date on the latest legal proceedings, can check out the Jeffrey Newman Law Whistleblower Help Center and blog!