This article examines the potential reputation damage for David Cameron surrounding the revelations around his tax situation and the off shore trusts that he benefited from that paid no UK corporation tax.
David Cameron’s Tax situation has caused a media storm.
After five different statements in a week surrounding how he has benefited from his late fathers Offshore Fund located in the Bahamas where corporation tax is zero and then conveniently moved to the Ireland when he was elected Prime Minister, the man who has been on a personal crusade since being voted into power to tackle tax avoidance, finds himself in the media spotlight having to justify his own position. His personal reputation is being threatened by his actions.
It appears that he sold off his units in the fund just before he became Prime Minister and made a profit at a level that just made sure that he incurred no Capital Gain tax bill in the UK. It also seems evident by his own admission that he inherited money (£300,000) from that Trust (directly or indirectly) when his father Died. Monies that were generated by not paying tax in the UK.
Questions to Ask Mr Cameron
- Why did his Father locate the Fund in The Bahamas other than the obvious reason (to avoid UK tax)?
- Why did his father move the Fund to Ireland about the time he became Prime Minister?
- Why did he choose to sell of his units in the trust around the time he became Prime Minister?
- Does he feel its right that the Prime Minister should benefit from funds in and off shore scheme?
- Does he have any understanding of how this might be perceived to be hypocritical?
Cameron’s Tax Crusade
Cameron’s Government have made Tax avoidance a central platform of their administration. The government introduced the Finance bill in 2014 aimed at clawing back perceived tax advantages for schemes sold to individuals since 2002 by issuing APN’s (Accelerated Payment Notices) to demand back tax advantages already given by HMRC until the court challenges by them had been resolved. Other legislation looked at powers for HMRC to directly access peoples bank accounts to take monies owed in tax.
Most authoritative voices outside of the Government were horrified at the powers given to HMRC given their track record in making mistakes. True to form we are now seeing that the HMRC can’t even implement their own legislation without making unforgivable mistakes – see the recent Montpelier Tax Scheme where the HMRC issued APN’s incorrectly to 2,000 tax payers who then faced bankruptcy and having to sell their homes and assets to pay for something they should never have been issued in the first place.
The HMRC have embarrassingly had to retract all 2,000 as they realised they had incorrectly applied their own legislation. Small comfort to those who put into financial ruin by this ‘mistake’ but do the HMRC really care?
Many of those hounded by Cameron’s legislation and HMRC’s belligerence have left the country denying hundreds of millions of pounds of future tax revenue.
Whilst the Government persecutes ten of thousands of UK tax payers, many of whom signed up to schemes (e.g Film Partnerships) that were approved by the HMRC at the time and promoted by the likes of Ingenious Media and KPMG, they were negotiating secret deals with major corporations (Google, Starbucks etc) to get their corporate tax bills down to ridiculously low levels as non of these companies claimed to have made much profit in the UK.
Of course had the Government had any appetite to tackle foreign companies corporate shenanigans when it comes to hiding profit made here abroad they could have just resolved this in one swoop by introducing a tax on these companies revenues – something they would find very difficult to hide. A 1% revenue tax would generate billions of tax revenues from these companies per year.
David Cameron should resign and admit the hypocrisy of his actions.
But will he…?