Tax could be levied on assets, increased on income over £150k, increased on capital gains, the effect of debt reduced by lowering central interest rates and - because this is government - money can be created. It needs to be managed but there is this great myth that government finances run like household finances but they do not - for example increasing the wages of NHS staff would actually “cost” the covernment very little because it gets almost all of it back, either directly through income tax and NI, indirectly through VAT or indirectly but some steps removed as it taxes further transactions or income generated down the line,
Having read the article, it seems clear an attempt at evasion. He has previous for being (dis)honest with the truth and vagueness Tory MP Nadhim Zahawi admits taxpayers paid power bill for his stables | MPs' expenses | The Guardian
What seems more concerning is he can simply pay the evaded tax and seemingly not suffer any consequence when a normal member of society would be in court facing fines and possibly a stretch at his majesty’s pleasure.
Piggott committed tax fraud over many years and deliberately hid money using different names in a number of tax havens.
Becker received a suspended sentence for tax evasion in Germany, his UK conviction was for hiding money to avoid paying his creditors after being declared bankrupt.
Zahawi has not been charged with any crime, what he may be guilty of is tax avoidance (not illegal) and not informing parliament about a possible HMRC investigation when he became a minister, if so he broke the ministerial code and must accept the consequences.
Had he been indulging in a bit of legal tax avoidance he would not have had to pay the whole of the tax due. HMRC would have been stuck with agreeing that it was legal and he would not have had to pay anything.
Or, perhaps, he would have had to pay a portion, if they decided it was legal but questionable.
There is a lot of confusion regarding the difference between tax avoidance and evasion and the former is often presented as though it is an illegal activity. However anyone with an ISA, or who contributes to a pension is making use of a tax avoidance scheme.
There’s a grey area, perhaps, regarding loopholes - years ago I was persuaded (as was everyone at the firm with very few exceptions) to join a scheme at work - that was a tax avoidance scheme which avoided so much tax that the government paid us for the privilege
Afterwards I got sucked into the (probably inevitable) investigation - the first of two times that HMRC have chosen to look into my affairs (the second was a “routine random check” but no doubt triggered by the first).
The official line, paraphrased was "well, we don’t like what you did - but it was legal), though they decided we all had to give 10% back.
They closed that loophole afterwards.
Zahawi has not been charged with a crime a) because of who he is and b) knowing that the writing was on the wall he called HMRC before they called him. One of the benefits to him is that confidentiality applies. It might have cost him a couple of million but it kept him out of jail and kept his affairs private.
The tax policy piece states that Zahawi ‘avoided’ not ‘evaded’ tax Billy, my take is that he paid up on behalf of his family because he knew that at some point this would all come out and the company structure is pretty suspect anyway which is not a good look for any senior politician.
The news this week that the Conservative Party Chairman Nadhim Zahawi has been forced to stump up millions of pounds in unpaid taxes tells us an awful lot about the state of politics and media in the UK. The story, which was initially broken last weekend, and quickly followed up elsewhere, remained almost entirely untouched by the BBC for days afterwards… One BBC staffer told Byline Times that decades of political pressure and criticism, combined with funding cuts, have turned its political news operation, based on Millbank, into into an inherently conservative operation.
And:
43% of voters now say they believe the BBC changes the content of its reporting due to pressure from Government… SNP voters appear to be the least trusting of the organisation, with some 80% agreeing that the Government influences the BBC’s news coverage.
Well, Google was the same in France :
DGFIP : here have this massive fine for tax avoidance
Google : about those swimming pools, outhouses, garages, etc, that you don’t seem to be able to find, we have some neat satellite tech that might be of service…
It’s now being reported that Zahawi has paid additional charges/penalties in respect of the payment making it £5m in total - if so - his position is now untenable.
He should be removed as chairman and Minister without Portfolio, whether he should stand down as an MP is a bit more debatable, but I suspect he *would* have to stand down - there’s almost no mechanism to “sack” an MP and I don’t think his current transgressions fall within those set out in the Recall of MPs act.
I have to admit this conversation makes me feel a bit old-fashioned.
I not only think people in senior positions of trust, from private company directors to senior public servants like MPs - let alone Ministers of State - should abide in their private affairs by both the letter and the spirit of the law - eg. should neither evade nor avoid tax - but that their behaviour should be exemplary.
Literally: they should set an example.
Is that asking too much nowadays?
Perhaps this is now the right time to look at who can stand as an MP, whilst we want as broad a range of people as possible do we really need multi-millionaires such as Zahawi or Sunak running the country?
Alternatively, should people be forced to divest themselves from all their investments etc once they’re elected?
I think it would be very difficult to bar people from standing as MPs simply because they were too wealthy - though I completely agree that there is a significant danger that such individuals will be tempted to pass legislation which improves their lot at the expense of the average member of the public. Which is exactly what we are seeing in the UK government at the present time.
It would not be a bad thing, though, if MPs had to commit to the job 24/7 with “normal” amounts of annual leave (let’s be generous and say 6 weeks per year) and not to be actively involved in other business interests - or, as you say, to give them up for the duration of their time as an elected representative.
The taking on of extra jobs while an MP or minister does incense me, given it lends itself to conflict of interest and is a distraction from doing what should be an all-consuming full time occupation.
Relevant here perhaps is the recent US controversy about Trump’s tax returns, during which some pointed out that some countries make all tax returns public. Not a bad idea, at least for everybody standing for election.
