Wealthy foreigners in the UK are celebrating a first-round victory in their battle to stop Gordon Brown closing the non-domicile tax loophole which allows them to avoid paying millions of pounds in UK tax each year.
Stories from 2002:
Let us get to the truth.
November 1996. Budget day. The chancellor of the exchequer, Kenneth Clarke, is in bullish mood. He is going to crack down on tax fraud and tax loopholes, he says. And, in particular, he is going to crack down on big businesses which cheat the Inland Revenue. “Tax experts will be redeployed to investigate even more rigorously how some big, sophisticated companies seem to pay so little tax,” he thunders. And he means it.
Imagine a gamekeeper sending a letter to the local poachers, telling them that, in future, he would like to support their activities: he would trust them not to shoot the pheasants and he would invite them to regular meetings so that he could take their advice on how he should handle them and, in the meantime, he would ask his staff to consider the genuine needs of poachers alongside those of the landord. Imagine the gamekeeper declaring finally that his ambition was to become the poachers’ champion.
The two thousand largest corporations in Britain are being allowed to cut corners in tax law and to escape Inland Revenue penalties as part of the government’s efforts to produce a business-friendly environment.
A secret Inland Revenue strategy which for years has allowed some of the wealthiest people in Britain to escape paying their full potential tax bills, was in tatters last night after a senior High Court judge declared that it was unlawful.
The richest man in Britain has used so many loopholes in UK tax law that he has not only saved himself millions of pounds in potential tax but, in at least one year, he and his UK businesses ended up receiving more money from the Treasury than they handed over.
Hans Rausing has lived a fairy tale life. His home is a palace. His own private valley dips down through the trees to his own private lake. Inside, he walks on marble floors. In his strong room, he keeps silver plates and golden coins and whole hogs of bacon, because it is conveniently cool in there. And he is as rich as a dream.
Foreign millionaires have launched a furious lobbying campaign to protect the non-domicile loophole which saves them millions of pounds in tax each year while their accountants have started a rearguard action to shift their wealth so that Gordon Brown cannot tax it, even if he does change the law.
Gordon Brown may want to keep a close eye on Mohammed Al-Fayed. In particular, he may want to watch the legal action which the controversial owner of Harrods launched last year against the Inland Revenue. There are people in Whitehall who say it may take the lid off another scandal involving gross tax avoidance by the rich.