Wednesday, 8 May 2013

WILL TAX-PLANNERS BE JAILED?

It is unsurprising that John Dixon, Head of Ernst & Young's UK tax department and Chris Sanger, head of their global tax "strategy" have hotfooted it into 10 Downing Street to lobby David Cameron the Prime Minister to protect the privacy of, and not allow transparency to be imposed on, the consolidated accounts of ENRON style multinational groups and super-rich individuals. We can expect a long queue of refugee professionals treading in Ernst & Young's footprints - and begging on Capitol Hill and Parliament Square for "deals" that legitimize the past 30 years of signed filed accounts and tax returns and asking to "Draw a Line" of "Forgiveness, Truth and Reconciliation".

With 99.5% of most people in most nations suffering austerity, double dip recessions, 50% youth unemployment and insulted by borrowing back their own money at high interest rates from The Free Markets - offshore of course - the shy architects of the massive $32 trillion Tax-Evasion-Capital-Flight the world has suffered are unlikely to be treated kindly. Hey you brass-necked folk! we want our money back! 

8 minutes interview: Here is what the UK Treasury/HMRC is doing. The first 100 letters were issued to tax evaders on 10th May 2013. http://www.noelhodson.com/bbc4-10may13-tax.wma

There are many more complicit professionals and wealthy clients who are trembling in their shoes, and are pondering their answers to the question - "Which bunk do you prefer, Sir? Upper or lower?" This global response indicates the immense scale of Tax-Evasion-Capital-Flight that is sabotaging the world's money-economy. It is time for aggressive repatriation of the $32 trillion.

Last month's horrifyingly shocking events, including the confiscation of tax-evaders' funds from Cypriot banks (AS SAFE AS THE BANK OF CYPRUS), swiftly followed by the publication of 130,000 tax-evaders' details  and 2.5 million emails from the British Virgin Isles (NEWS SUPPRESSED IN THE UK), swiftly followed by the apparent (but probably sham) caving in of British Territories tax-havens on transparency and data deals with the UK, swiftly followed by heavy boots from the USA authorities stomping on 300 Swiss Banks involved in tax-evasion - will scare the accumulated waste products out of thousands of portly tax-planners and complicit auditors, directors and lawyers, everywhere.

Most tax-planners sell their complicated schemes for very high fees on the basis that the clients will pay far less tax than they are legally obliged to and that the schemes comply with the tax laws of the diverse jurisdictions that the imaginative, creative, dodgy transactions pass through. Directly or indirectly or by inference the tax-planners propose a scheme and assure their clients that it will work.

The big profits on which tax is usually evaded are made by selling stuff in OECD nations - which in turn charge higher taxes. To kill off the profits shown in Filed Accounts and Tax Returns in OECD nations, the majority of tax-plans rely on cunning transactions that break the four basic, international, long established accounting rules (1) NORMAL COMMERCIAL PRICES (2) AT ARMS LENGTH (3) WHOLLY NECESSARY FOR THE BUSINESS (4) NOT DEVISED TO REDUCE TAX. 

Most such plans when scrutinized unsympathetically by, say an IRS recovery team, are quickly seen as simplistic false accounting - with inflated invoices and charges made by false companies in potty little tax-havens to real businesses in OECD jurisdictions. Such false accounting breaks tax laws and is criminal. 

Where several executives and professionals are involved in creating these strange book entries - keeping two sets of books - the criminal charges can be of Fraudulent Conspiracy. 

Even the UK's HMRC, which has been so infiltrated and paralyzed for so many years, might gain courage from the USA actions - and rescind the past 30 years counterfeit charges and invoices it has previously accepted - and collect the proper taxes due - about $3 trillion. HMRC will  of course first have to eject the "retired" or "seconded" tax planners quietly embedded in high positions in UK government over the decades.

What sort of sentences can the conspirators expect? These clever USA lawyer tax-planners got eight years and million dollar fines I SAY AVOIDANCE - YOU SAY EVASION   for relatively small schemes. The major transgressors might be treated far more severely - for nearly bankrupting the world.

LETTER TO THE GUARDIAN 13 May 2013.

Presumably the FTSE 100 groups who do not use their tax-haven subsidiaries for avoidance or evasion will, as public companies, publish the fine details of the transactions. (Top firms condemned for prolific use of tax havens – Guardian 13 May 13). To legally reduce UK or OECD taxable profits the deductions must be (1) Commercial Terms (2) Arms-length (3) Commercially necessary (4) Not tax-dodges; otherwise HMRC can retrospectively deny decades of claims. I estimate that of the global $21 trillion of tax-evasion-capital-flight more than $2 trillion (5 million jobs for 10 years) has been illicitly siphoned from the UK. HMRC must repatriate it.

Noel Hodson, Oxford
www.noelhodson.com/SW2000/Take-the-Plunge-NH-CV.pdf





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