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OPINION

Offshore dramas

Offshore dramas
April 8, 2016
Offshore dramas

The leak of 11.5m documents from a Panamanian law firm detailing the offshore interests of numerous politicians, oligarchs and other members of the global elite has unsurprisingly provoked much outrage, even if the revelations are in themselves hardly surprising. Of course, the tax affairs of these people have little in common with the tax affairs of the average worker in Britain, or for that matter the most affluent reader of Investors Chronicle. We are the so-called "little people" - as infamous American tax evader Leona ‘The Queen of Mean’ Helmsley once put it - who pay our taxes in full, partly because the vehicles that would allow us to avoid them are out of reach but mostly because we feel a moral responsibility to pay a fair contribution to society.

Yet while tax avoidance may be increasingly frowned upon, accountancy firms and legitimate offshore financial centres still do a roaring trade helping companies and higher earners around their tax ‘problems’. And, as investors, we are often the beneficiaries of the savings legal and sensible tax planning by the companies we invest in can bring. Your dividend cheques would be somewhat smaller without them.

We also benefit from the tax advantages of the ever-increasing amounts that can be saved in tax efficient vehicles such as Isas, even if the limits that can be saved tax-efficiently in pensions are going the other way. Only the most publically minded individual would forego such benefits in favour of making sure the Exchequer received a cut of their dividends, interest and capital gains instead. We often receive reader enquiries about tax, and I can’t remember any of them that ask how they can pay more.

However, answering anything but the most basic factual requests is becoming increasingly difficult thank to the ever-growing complexity of the UK tax code and the endless permutations possible in any individual’s tax affairs. Tax has become, contrary to those old self-assessment ads, extremely taxing. Meanwhile, dealing with HMRC when the need to clarify something arises is, to put it politely, hardly a joyous experience, unless you are a fan of the worst kind of muzak with the patience of Job. Considering tax is, for most of us at least, one of life’s ‘unavoidables’, fully resourcing the HMRC to help honest taxpayers manage them more easily should be just as high on the Chancellor’s ‘to do’ list as catching those that evade them.