The Spectator's Notes

Hate tax havens? Try imagining a world without them

Also in The Spectator’s Notes: sheep; the smell of spring; my nephew’s art; FGM

9 April 2016

9:00 AM

9 April 2016

9:00 AM

However wicked tax evasion is and however distasteful some tax avoidance may be, people should imagine a world without tax havens and see if they really want it. The prime reason that tax havens exist is that taxes in most countries are too high. If they did not exist, the competitive element would be reduced, and taxes would go up even more. The EU constantly complains about ‘unfair tax competition’, by which it really means just tax competition itself. Tax avoidance is what most of us try to do (see next item). Resentment about it is largely because the rich find it easier to achieve than the rest of us.

In my latest Notes, I mentioned that the theme of the South of England Agricultural Society this year is sheep. Last week, sheep entered our lives dramatically. We recently decided to buy the house and cottage next door to us. After deciding this, we discovered that George Osborne was imposing an extra 3 per cent of stamp duty on any ‘second home’ purchase not completed before 1 April this year. We had to rush to avoid being the Chancellor’s April Fools. Part of the money had to be raised by a mortgage. The man at the bank arranging it for us was extremely helpful and efficient but, not having bought a house for 20 years, I was amazed by the amount of legal and administrative fiddle-faddle that seems to have accumulated in that time. One traditional element — little more than a formality, I had imagined — was the visit of the bank’s valuers to our present house, which was our proposed security for the loan. Since the proportion of loan to value was not very high, no problem was expected. But with about four days left to go, the whole process mysteriously slowed. Eventually it turned out that, because there are sheep on our land which are not ours and because our land extends beyond ten acres, the bank’s mortgage underwriters had decided that our house was a commercial agricultural property which, for some reason, they would not lend against. It isn’t, and we get no money for the sheep, but it seemed impossible to find anyone with the authority to override this peculiar and falsely applied rule. Luckily, immense efforts by the determined man from the bank did at last prevail, and the mortgage money finally came through on the afternoon of 31 March. But it did seem for a few days as if the presence of sheep belonging to someone else was going to hand £27,000 of our money to Mr Osborne, which worked out at about £1,000 per fleecy friend. Only this week can we look out and smile at their newborn lambs gambolling.

Such a sad article in the Guardian by Ian Jack. He suffers from anosmia, the loss of sense of smell, brought on, in his case, by getting older. Ian claims, however, that it hasn’t much damaged his appreciation of spring because, unlike autumn, ‘Spring isn’t a season which has much of a smell to it.’ But spring does have a smell. In fact, I would say that smell is the first harbinger of spring. You notice it most at dawn and dusk. It is hard to describe, but unmistakable, not pungent but pervasive. It was if the pores of the earth were opening. I wonder if Ian has suffered from anosmia longer than he realises.

On Saturday, we gathered in the Blackshed Gallery, Salehurst, Sussex, for the opening of my nephew Sam Smith’s first commercial show of his paintings. Many readers will know the pleasure and embarrassment which attend private views of one’s family or friends. The person one knows wants also to be known as an artist, and one does not always feel confident that he or she will achieve this. It is sometimes difficult to say the right thing. In this case, however, there was no such anxiety, because Sam is autistic. It makes little difference to him what others think of his work, because he has, in that sense, no self-esteem. Sam attended his own private view, indeed, but kept his headphones on throughout. And because he is autistic, he has no self-consciousness about what we call art. He simply does it, with intense concentration and great physical engagement. A video accompanying the exhibition shows him thinking, squeezing, squirting, then delicately painting circles over the streaks he has made. He can’t do art for art’s sake, because he does not know what art is, yet he does it for no ulterior motive, because fame, money, culture mean nothing to him. What is he doing, then? When he was little, and spoke more than later, he divided his perception of objects into whether they resembled moons, snakes or helicopters (a honeysuckle head, for instance, being a helicopter), always interested in circles and spirals. He does something similar in his painting. He achieves what neurotypical creators long for but rarely attain — an absolutely honest engagement with the materials that expresses his consciousness of the world. In this sense, being autistic and being artistic are near allied.

Although you might not think so, female genital mutilation is a welcome subject to many on the left, because it is one of the few areas in which they can be rude about what they would never, in other contexts, dare to call ‘backward’ cultures. In their hierarchy of virtue, women’s rights trump even those of people oppressed by post-colonialism. Though I am not on the left, I’m against FGM too. But there are a couple of points to think about. One is that FGM is not an inexplicable primitive oddity: it is part of a wider culture which sees sexual relations in a completely different way from the choice- and pleasure-based principles of the modern West — as part of tribal relations, family, gender and religious duties and the care of children. So when we attack FGM, we are attacking much else besides. The other question is what will happen if our worry about FGM transfers to what we do not (yet) call male genital mutilation? Suppose some expert purports to show, with medical evidence, that male circumcision causes physical or psychological harm to boys, what then? Will one of the defining practices of both Islam and Judaism come under sustained attack? Will ‘MGM’ become, literally, a casus belli? We had better think carefully.

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  • WTF

    The financial system of ridiculous rules has driven previously law
    abiding citizens to ‘lie’, ‘forge’ or ‘threaten’ when dealing with these
    financial pimps. We were promised that being part of the EU it would
    simplify banking matters and the like, sure it has !!!

    If you are
    UK non resident, for some strange reason you are not allowed to open a
    new UK account but you can keep an existing account. You can’t change an
    existing account to a better interest paying account for the same
    reasons. That said, you can open up a US bank account for example with
    just a passport and drivers license ID but not in Britain. So what do
    you do, you LIE, you provide an address of a family or friend in the UK and with your 2 x ID proofs, you open a new account.

    are moving temporarily and staying with friends for a few months and
    want your banking mail address changed. What do you need ? You need
    utility bills from a place you’re staying where you don’t pay the bills.

    The rules on money laundering that apply to you but not banks who have been caught funding drug dealers and terrorists, cause you major grief when some jobsworth decides you have to send by post joint authorizations to cash in part of a pension fund you funded. What do you do, you contact the ombudsman only to find out there are no hard and fast rules of ID checking other than the financial body should carry out due diligence checking you are
    who. Its just some CYA BS that when you provide the official guidelines on money laundering, they finally back off and see common sense.
    What do you do ? You threaten by writing a letter to the bank placing
    full responsibility for any frauds that might happen because they refuse
    to change your address. Within 2-3 days a special customer service
    agent contacts you and backs off on the request for utility bills and
    says a copy of passport and cover letter will do.

    • boiledcabbage

      And remember, when you launder money, all you need is a passport [maybe your real one] and some utility bill [maybe your real one].. Then the solicitor, estate agent etc just says fine and makes a photocopy……its that simple.

      • WTF

        That’s really my point, as I pointed out to this jobsworth at SEB, I was a drugs dealer, I could buy a run down Spanish property for 10k and I’d have proof of utility bills and then really launder money but the system is a crock of s*** when it comes to both honest transactions and dishonest ones.

  • Trini’s dad

    Me cian tink of won valid reason why me should ave a bank account in di Vergin Eilands or Panama or Dgersey or di City or or or.

  • Philsopinion

    “FGM is not an inexplicable primitive oddity: it is part of a wider culture which sees sexual relations in a completely different way from the choice- and pleasure-based principles of the modern West — as part of tribal relations, family, gender and religious duties and the care of children.”

    One day, the Muslim vote will swing to the Right. It will be interesting to see who is more surprised – Labour or whatever Conservative formation exists then.

    • post_x_it

      You seem to fundamentally misunderstand the reason why Muslims vote for left-wing parties.
      It’s not because they share their values.
      It’s because right-wing parties are more firmly rooted in the Western, Judeo-Christian tradition and are inclined to defend it from corrosive outside influences. Whereas left-wing parties are prepared to tolerate and indulge the proliferation of Islamic culture and values in the West.

    • Australian Inquisitor

      Is circumcision classed as MGM?

      • Bokonon

        But seriously, it should be classed as such, and who cares whether we upset the Religion of Peace or the Chosen People by doing so?

  • Mary Ann

    If you are buying a second home for £900,000 then we should all feel sorry for you.

    • Money Pump

      Mary Anne, this was the first thing I thought of when I read the article! Also, given that the bank would also require security on Charles’ existing property, it all adds up to a pretty tidy sum!

  • ohforheavensake

    Yep. I really, really want a world without tax havens. And after reading your first paragraph, I want them even more.

  • Sunset66

    Imagine a world where the rich paid their tax the way the average person does.
    Tax rates are at a low level on high earners compared with the past , corporation tax is low and set to go lower

    The sverage person has little ability to avoid tax due. The richest who can somehow feel they are not rich enough but they still want schools hospitals and the army to make the society they live in and were they run their business safe and secure.

    You can make all the excuses you like but it’s morally wrong to evade the tax due if you want to live in that society whilst the average person pays up

  • MrBishi

    “Oh woe is me, I have just paid some tax”.

    • Bob3

      I thought you had a large nest egg pugged away.

      • MrBishi

        I was paraphrasing the article.

        • Bob3

          Nice to see you roosting over here, now the DT has gone comment unfriendly.

          • MrBishi

            And you.
            I think that the DT has given up on life.

          • davidofkent

            Have we migrated? I hope we won’t be returned through some international agreement!

  • Yorkman99

    Imagine a world where everyone copied the 1% and nobody paid tax. The end of civilisation as we know it.

    • post_x_it

      This scenario is called “Greece”. Except that there would be no money from other countries’ taxpayers to pay for a bailout.
      Or perhaps better still, “Pakistan”, where literally nobody pays any tax at all and the state survives entirely on aid handouts from gullible Western nations.

  • davidofkent

    The loss of tax havens would not prevent investment; it would remind people of just how much of our money is stolen by government for their own purposes and not ours. During Gordon Brown’s time, he regularly chose borrowing as a means of bribing voters with our own money. In this way, he fooled people into believing that more government spending on welfare was painless. Had he done the decent thing and raised taxes to pay for welfare bribes, we could have seen precisely how much he was costing the rest of us and we would have voted accordingly. Governments rob us daily so that they can maintain themselves in power. The elite have ways of avoiding this theft. If they did not, they would very soon explain matters to Prime Ministers in words of one syllable.

    • Malcolm Stevas

      Stolen by government and misused – and just thrown away through incompetence. Remember not long ago the “flagship IT programme” commissioned in 2010 for dealing with immigration and asylum applications? Rubbish, abandoned, money down the drain.
      About the same time as this c o c k-up an even worse failure was the much vaunted new NHS IT system that proved not fit for purpose, which the public accounts committee estimated at £10 billion plus – wasted…
      Really, governments in general (and ours especially) make the super-rich seem unblemished models of probity and financial competence. And government costs us a lot more money.

  • boiledcabbage

    £27k ? A mere trifle. Thanks to the UKs open door policy on money laundering, it costs Londoners – British Londoners not the uber-weathy – hundreds of thousands just to move across town. The foreign ownership of UK property, often via BVI companies, is a disgrace. It has priced our own people out of London. The 15% SDLT [on corporate deals] is a money-laundering tax.

    Purchase of property by non-UK taxpayers has to stop.

    • davidofkent

      The Land Registry might be required to refuse to register non-commercial property in the name of a company or in the name of a person who has no residence status in the UK, perhaps.

      • Australian Inquisitor

        The same Land Registry that the Tories sold off last week?

  • rolandfleming

    Oh how absolutely ghastly it must have been for you to have to deal with such awful problems. Sometimes one wonders how one makes it through the day, doesn’t one?

  • Australian Inquisitor

    Does Mr Moore also think that the reason shoplifters exist is because prices are too high?

    I’m assuming that he doesn’t feel the associated costs of Sam’s autism – the expenditure on hospital services, home health care, special education facilities and respite care, should be paid for by the taxpayer?

    All that expense…tut, tut…

    • Lawrence James.

      Did tax-havens exist in the 19th century or most of the 20th ? If, as Moore imagines, they are a historical phenomenon, why haven’t we heard of them before.Once upon a time the Virgin and Cayman islands were, admittedly impoverished crown colonies.

  • Skyeward

    Male circumcision is already under scrutiny in the U.S. I wouldn’t say its a lefty cause but rather part of the decline in religiosity. Beautiful snippet about your nephew’s show. I sure hope we identify the causes of autism soon and perhaps cure it.

  • Bertrude

    I don’t blame Cameron for legally avoiding tax , I do blame them for preaching about others and trying to screw more tax out of us struggling to aquire capital . Privileged hypocrites

  • Jacobi

    Taxes are high because the balance of trade is in severe deficit and we have to borrow to make up the difference. All because the Big Financiers long since sold off British industry and put the money in China. ( and we borrow from the Big Financiers, naturally).

    The whole hair-wrenching business of tax havens on the part of politicians is shear hypocracy. Of course I will let you see my tax return – after I have had half an our or so to “put it right” . I ‘m told a Mr Corbyn , common name of course, had such a little delay, ahead of me.

    Having put it right am quite happy to let you see my return. Cost you though.

    Personally It would never occur to me not to offer cash to a tradesman at the lower end of the scale.

    It would be bad form not to.

    ps : suggestion. anyone who wishes to comment on this site or anywhere else or any tax official and his boss who chases us up or the policeman who comes to arrest us, and so on can only do so if he first published his tax return.

  • Dave Cockayne

    MGM should come under sustained attack by people with any form morality connected to the harm principle.
    Orthodox Jewish rabbis are giving 8 day old babies herpes by sucking the blood of the babies penis after cutting off the foreskin.
    Herpes causes brain damage or even death in babies that young.
    Still think circumcision is harmless?