Lord Sugar, owner of Amstrad and TV star of The Apprentice is on record as saying ‘My accountants have told me that I can have one foot in Jersey, my left earlobe in the Isle of Man and my right foot in Zurich and pay little or no tax’
This was a quote brought to my attention by Garry Bell, head of tax at Jersey firm of accountants PKF bba, who is our podcast professional of the week.
On 8th June 2017 Lord Sugar, knighted as a Labour peer in 2009, tweeted ‘If you admire or trust me. An east end boy done good by honest graft. For the good of the UK, I sincerely advise you NOT to vote for Corbyn #TRUSTME’
Of course, he was criticised on Twitter as ‘simply protecting his self-interest as a wealthy man not wishing to pay more tax’
His reply was ‘That is rubbish. I’ve made my money fair and square and have been happy to pay my taxes as I believe them to be fair. This is not about me’
Notice the qualification – ‘as long as I believe them to be fair’.
In 2014 Alan Sugar was on record as saying ‘he was offered the choice of the schemes which the singer Gary Barlow, the comedian Jimmy Carr and radio jockey Chris Moyle invested in, to their discredit but, turned them down.
These tax schemes were ‘legal’, in that they came within the strict letter of the tax legislation according to opinions of sophisticated and clever tax barristers, but they were bending the letter of the law to fit the aim of the client; to avoid tax. Each of the above celebrities has now apologised to their fans and the public at large for cheating on their tax obligations.
Alan Sugar is also quoted ‘To be fair to Gary Barlow and Jimmy Carr, they are entertainers not businessmen’ they were advised by their accountants and simply followed the advice given.
Clearly Lord Sugar although he does not mind paying his ‘fair amount for tax without cheating’ does not think the tax rate proposed by Jeremy Corbyn at 70% was fair!
This is a good example of what Arthur Laffer had in mind when he discussed with Dick Cheney and Donald Rumsfeld in 1974 the US Ford administration proposal to increase tax rates. His view was that by increasing the rate of tax the Government will not necessarily increase tax revenue.
Allegedly, he drew a bell curve on a napkin, starting at zero tax and rising to 100%. His point was that there is an optimum rate of tax (the summit of the bell) which brings in the maximum amount of revenue– but above that increasing the rate is counter-productive – in the case of Lord Sugar he would not pay 70% rate of tax; in fact if it were imposed he would leave the country and it would get nothing!
This what Richard Branson did in 2006, when he sold his estate in Oxfordshire and took up residence in his home in the Caribbean on Necker Island. This is an island he fell in love with and bought, when he was merely 29. He gave his reasons to leave the UK as his love of the island and to preserve his health. But coincidentally, he also saved himself millions in taxes, a fact which has not gone unnoticed in the press this week.
Branson, it seems has asked the Government for a £500 million tax payers money to bail out his ailing Virgin Atlantic business.
Alex Brunner writing in the Daily Mail portrays Branson as a ‘tax avoiding wastrel, living the high life in the Caribbean’. Allegedly, the bailout has been refused.
In his defence, Branson says his company Virgin Atlantic pays all taxes due in Britain as do all his other companies. However, if he complies with the restrictions imposed upon him by the UK Government to avoid being a UK tax resident he can and does avoid personal taxes in the UK.
Garry Bell, Head of Tax at PKF bba in Jersey, our Podcast Professional of the week is a specialist in advising people who want to become a tax exile from the UK on how to do it.
For many, the Covid 19 lockdown is a massive experiment on whether and how we can work from home. Some may decide it is not only possible but preferable to work from home. For these people, it is then only a small step to consider emigrating to a low tax jurisdiction.
Garry I can see becoming very busy over the next few months and years as the UK Government sharpens its pencil looking for ways to raise more revenue for its empty coffers from its wealthy UK tax residents. Many will just find it ‘unfair’ – and leave
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