Wednesday, 22 May 2013


22nd May 2013. Email to journalist Simon Jenkins about cyberspace tax-evasion.

My Credentials - Short CV

Dear Simon Jenkins

My tax and cyberspace credentials include 30 years of giving tax advice, once specialising in back-duty-cases, and a forecast in 1999 for Bank Dresdner under the auspices of the EC in which I predicted that by 2012 some companies would use satellite based “off-planet” tax-havens (see Slide 9 in attached PDF). Apple etc have gone further, evolved to a higher ethereal form and vanished into The Cloud – with, they fondly hope all our money for all time. I am a poacher turned concerned grandfather. Here are two immediate solutions.

The target for repatriation is not only the billions in taxes but also the trillions in tax-evasion-capital-flight, variously calculated as from $18.5 to $32 trillion (80 million jobs for 10 years) off-shore. As your colleague Larry Elliott writes today “Tax lost offshore ‘could end world poverty’.  Capital has gone offshore and is on-strike.

(A) HMRC, IRS and other agencies could, under existing national tax laws, which assume guilt until proven innocent, legally raise protective assessments and penalties, as they would on you and me, on all the offshore assets, and prosecute back-duty-cases. I am professionally certain that critical scrutiny of the
imaginative documents that siphon off the assets will reveal the deduction transactions are not tax-relievable in the USA /UK /OECD because they breach one of the 4 requirements: COMMERCIAL, ARMS-LENGTH, NECESSARY, NOT TAX-AVOIDANCE. Such assessments can legally be reopened back as far as HMRC and IRS want – say, 30 years. Professionally, my next futurist forecast, I also think numbers of executives and advisors will be prosecuted for making up the dodgy documents and signing incorrect tax-returns and balance-sheets – false accounting. A few prison sentences might curb their astonishing hubris.

However – back-duty-tax-cases are like the Minotaur’s Maze, with monstrous slavering lawyers lurking round every corner. It could take years of tedium. So go to Plan B:

(B) The CYPRUS solution. Simply confiscate the offshore assets, raise the protective assessments and wait for the tax-evaders to prove all taxes have been paid – for the past 30 years. The intelligence services, whistle-blowers and investigative journalists know where the assets are buried – and major nations have enough gun-boat power to repatriate them – using a crude accounts formula to share out the loot – based on Sales in their tax-regions in each of the past 30 years.

Andrew Smith, my MP, is asking Treasury Minister, David Gauke “Who in government use tax-havens?” Government is stuffed full with Big-4 etc tax-planners in influential offices - with a major stake in claiming their schemes were legal. 

I want to see all the money repatriated and intelligently invested so that my grandchildren will have bright futures. I am now a grandfather turned gamekeeper.

Do pass this e-note to OECD, US and UK politicians and government officers.

With regards

Noel Hodson

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