[Politics] The Labour Government

[Herr Tubthumper]

Tax fraud amongst the wealthy and businesses in Germany is a huge thing, far bigger than the UK. Much of this was revealed in the Luxembourg, Panama and Swiss information leaks. On top of the following data, Germany recently lost another €31b to a dividends tax fraud carried out by its business shareholders, it would’ve made the news.

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Rich Germans and French loath paying taxes too, many criminally so.

As an aside, and I can only speak for Berlin here, there is an almost accepted level of “black economy” in Berlin, especially in the night and hospitality sectors. The authorities seem to turn a blind eye to it as it keep the economic wheels turning. If you really take the piss, they will come down on you, as did happen to one person I know of, keep it to an acceptable level and you should be okay.

 

[S.T.U cgull]

In 2022 the LSE said scraping the tax benefits of non dom status would raise £3.2b a year.

Earlier this year all estimates said a much reduced £1b, including from the OBR.

Before the Adam Smith Institute report, a recent insight said it would cost tax.

These invariably aren’t tax dodging Brits. 93% were born abroad, they came to the UK from the US, India and mainland Europe. They’re mobile, without a lifetime’s attachment to this country. They have been leaving the UK following adverse tax charges, there were 140,000 in 2007/08, now 74,000. The 74,000 pay £8.9b per annum in UK taxes.

To recap on the technical nature of a non-Doms tax affairs. They don’t pay tax on overseas income or gains when not then remitted to the UK, instead a flat rate £30k or £60k annual charge. So for example an American or Indian non-dom living in London doesn’t pay tax on dividends received in their native country, when not then brought into the UK. That’s it.

Italy and the UAE are making a concerted effort to lure the non-doms, it’s working.

The feeling is that Reeves is watering down any proposals. If true, she’s looked and listened.

Not to be too facetious - but the American would have a tax liability, such is their worldwide system of taxation.

 

[keaton]

More than 1m households to get £420 budget boost in universal credit change

Exclusive: move will cap amount that can be deducted from benefit payments to repay short-term loans and debts

www.theguardian.com

 

[Is it PotG?]

Can almost hear Sir Des, with that iconic music.

 

[Moshe Gariani]

More than 1m households to get £420 budget boost in universal credit change

Exclusive: move will cap amount that can be deducted from benefit payments to repay short-term loans and debts

www.theguardian.com

Sounds like the sort of thing one would hope for from a recently elected Labour government. Hopefully paid for by tax increases on those with broader shoulders (and especially their unearned wealth).

 

[Bodian]

Well, it's obviously a breach of a manifesto promise, which isn't a good start. Perhaps that's why the budget is so long after the election, because it's easier to tear up the manifesto after 4 months rather than 4 weeks.

It's an oversimplification to say it will apply to the private sector only, but it does make a difference only to the private sector because the government doesn't suffer by paying taxes to itself.

Which manifesto promise is being breached?

Not this one - because that clearly applied to the NI I pay, not the NI my employer pays - and that's how I understood it: “Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.” They are not 'increasing the tax on the worker' so the context of the manifesto is being kept to.

 

[Herr Tubthumper]

Well, it's obviously a breach of a manifesto promise, which isn't a good start.

Which one?

 

[jcdenton08]

Don’t think they’ve breached their promise on this issue. If it raises the projected £20bn then yes, I see this as a necessary evil for business owners to suffer. It does make the £2bn from WFA seem even more harsh, though.

 

[LamieRobertson]

As an aside, and I can only speak for Berlin here, there is an almost accepted level of “black economy” in Berlin, especially in the night and hospitality sectors. The authorities seem to turn a blind eye to it as it keep the economic wheels turning. If you really take the piss, they will come down on you, as did happen to one person I know of, keep it to an acceptable level and you should be okay.

Out of interest what is the ‘’acceptable level”

 

[chip]

Out of interest what is the ‘’acceptable level”

Somewhere between wealthy and rich which no one seems to be able to identify

 

[Moshe Gariani]

It does make the £2bn from WFA seem even more harsh, though.

The WFA thing doesn't seem very Labour at headline face value but makes sense in wider context. This government can be TRUSTED to deliver policy that works in the interests of the many, not the few.

 

[Herr Tubthumper]

Out of interest what is the ‘’acceptable level”

Something which doesn’t draw too much attention from the Finanzamt.

 

[chip]

Something which doesn’t draw too much attention from the Finanzamt.

So fraud is OK, it's just the scale that might make it wrong. That's clear

 

[Sorrel]

I'm not looking forward to the budget, which I keep hearing is going to get me, because (apparently) I'm not a working person.

If I thought this would help the infrastructure of the country I would be ok with it, but I'm not convinced. I hope to see some decent (and employment-creating) transport and modernising schemes coming from the announcements.

If the government could stop funding all the grants they do (see: https://www.gov.uk/government/statistics/government-grants-statistics-2022-to-2023) I'd be happier. There must be some areas that could be cut there (especially in the Foreign, Commonwealth & Development Office awards). But I expect they will keep spending on schemes there that don't help us - or probably anyone else, as corruption management fees mean the money makes no difference (c.f. the £15 million sent to Afghanistan in 2023).

(Note this isn't a criticism of the current government per se, as the last one was exactly the same in this area, but it did at least pretend it wanted to tax me less.)

 

[Randy McNob]

The WFA thing doesn't seem very Labour at headline face value but makes sense in wider context. This government can be TRUSTED to deliver policy that works in the interests of the many, not the few.

A slogan comprehensively rejected by the electorate in 2019, they opted for 'few' rather than 'many'

 

[Herr Tubthumper]

So fraud is OK, it's just the scale that might make it wrong. That's clear

I guess it like a lot of things in life, don’t be too much of a twit and you should be okay.

 

[WATFORD zero]

I'm not looking forward to the budget, which I keep hearing is going to get me, because (apparently) I'm not a working person.

If I thought this would help the infrastructure of the country I would be ok with it, but I'm not convinced. I hope to see some decent (and employment-creating) transport and modernising schemes coming from the announcements.

If the government could stop funding all the grants they do (see: https://www.gov.uk/government/statistics/government-grants-statistics-2022-to-2023) I'd be happier. There must be some areas that could be cut there (especially in the Foreign, Commonwealth & Development Office awards). But I expect they will keep spending on schemes there that don't help us - or probably anyone else, as corruption management fees mean the money makes no difference (c.f. the £15 million sent to Afghanistan in 2023).

(Note this isn't a criticism of the current government per se, as the last one was exactly the same in this area, but it did at least pretend it wanted to tax me less.)

Might be worth you checking the last Reform 'Manifesto' as I believe they had quite a similar approach to the areas you are interested in cutting, and they would definitely pretend to tax you less

 

[Weststander]

I’m not denying any tax evasion but that graph is simple absolute values and doesn’t present an accurate comparison ….it’s skewed by countries with larger populations, higher GDPs and/or higher taxes. I’m not sure what context it was presented in, but in isolation it’s misleading.

If 10% of the population of Germany didn’t pay their taxes it stands to reason the total would be more than if 10% of the UK did the same as it would involve more people, higher amount of GDP and a higher amount of tax. I’d like to see the comparison once these factors are considered.

I’m surprised Greece isn’t in there as well.

My point was about rich Germans not leaving Germany though

Per capita, tax evasion is greater in Germany.

311,000 Germans have relocated in lower taxation Switzerland. Germany tried to impose an exit tax, but lost the key court case (the Wächtler proceedings).

Greece ... obviously explained in that table by a far lower population.

 

[chip]

I guess it like a lot of things in life, don’t be too much of a twit and you should be okay.

I agree with you in a sense, in reality that is how most of us behave. But it isn't a good practice as the boundary is subjective and it's interpretation leaves it open to abuse. Would we apply this thinking in domestic violence or child abuse? You and I might have very different ideas about what constitutes a twit - I doubt this is the case. It's also bad law if it acceptable to break it to some degree and the state sanctions it.

 

[Weststander]

Not to be too facetious - but the American would have a tax liability, such is their worldwide system of taxation.

I know and Indians in India.

The discussion in this thread is a UK domestic one, people get wound up that non-doms don't pay UK taxes on the worldwide income not remitted to the UK.

Or perhaps more like with many ... have a false impression that non-doms just don't pay tax!