Offshore Tax Avoidance: Mike Garlick

[UpTheBeehole]

After seeing a few posts decrying Gary Lineker's tax avoidance recently, I've just read that Burnley Chairman Mike Garlick participates in offshore tax avoidance schemes too.

Although it was 'perfectly legal', it is still unashamed tax avoidance.

https://www.theguardian.com/news/2017/n ... ise-papers

[lovebeingaclaret]

After seeing a few posts decrying Gary Lineker's tax avoidance recently, I've just read that Burnley Chairman Mike Garlick participates in offshore tax avoidance schemes too.

Although it was 'perfectly legal', it is still unashamed tax avoidance.

https://www.theguardian.com/news/2017/n ... ise-papers

What tax are you saying he's avoided?

[IAmAClaret]

Code: Select all

The company also helped clients move pension savings offshore - a legal option for savers. One client was Mike Garlick, the chairman of Burnley FC, has made millions from the IT consultancy Michael Bailey, which he founded in the 1980s. 

Documents show Garlick transferred his personal pension into an offshore scheme and used it to buy investments – a perfectly legal move and one not subject to tax at the time he did it.

Garlick told the Guardian he had moved the money overseas because he planned to retire to another country. He has not brought oney cash from the pension back to the UK, so no tax has been payable. Garlick said: “I would like to stress that I pay all my UK taxes and have never been involved in any illegal activities such as money laundering or the obscuring of ownership of assets.”

That's the bit of the article that relates to Mike Garlick

[lovebeingaclaret]

We now await utb to return and inform us what the unashamed tax avoidance relates to.

[dsr]

What tax are you saying he's avoided?

~He's avoided two sorts of tax. One is avoiding income tax by paying pension contributions which are tax deductible. The other is more complicated but to do with the rules of overseas pensions at the time - it possibly involves paying less CGT on his pension assets?

Many of us practice the first sort of tax avoidance - I do myself. And I'm not ashamed of it. I'd love to practice the second sort, but don't have the cash!

[Spijed]

The best quote was from the MP Chris Bryant "The difference between legal tax avoidance and illegal tax evasion is what we allow to be legal".

[pureclaret]

Avoidance is what most people do and is perfectly ok if the money you move has had tax paid at the correct level.
Evasion is the one where tax should have been paid or earnings declared and have not been.

According to the original poster anyone who earns more than £12,000 practices unashamed avoidance

[Guich]

If the media opened these stories by explaining that tax avoidance is entirely legal and above board, and the private business of the investor, then there wouldn't be a story.

It's another example of a way to become outraged by something that isn't actually wrong. Whether you think the tax laws should be changed is another matter. But for now, using an offshore account is much more acceptable than touching someone's knee, and rightly so!

[Walton]

The Treasury have had a massive crackdown on overseas pension schemes over the last couple of years, and the approved QROPS list is tiny compared to how it was up until a few years ago.

The govt have since introduced a 25% charge straight off on some overseas transfers

The tax avoided would be the lifetime allowance (55% on anything over £1m) and also a 40% unauthorised payment charge.

Pretty significant stuff.

[Rick_Muller]

If the media opened these stories by explaining that tax avoidance is entirely legal and above board, and the private business of the investor, then there wouldn't be a story.

It's another example of a way to become outraged by something that isn't actually wrong. Whether you think the tax laws should be changed is another matter. But for now, using an offshore account is much more acceptable than touching someone's knee, and rightly so!

The difference being what is morally wrong and legally wrong. Avoidance like this is legally OK, but morally questionable - thats the issue and the story.

For what its worth, we'll all have a bit of a moan about it again and nothing will change because those who can make the changes refuse to make them because it is likely to directly affect them and the rat race will continue and we (the workers) will continue to work and the money will continue to grow for the wealthy.

[aggi]

Obviously the grey area is where tax avoidance becomes evasion.

You can have legal tax avoidance but, when you start to aggressively leverage that with the purpose of avoiding tax rather than a commercial intention, it starts to hit the grey area of evasion (not necessarily in Mike Garlick's case).

It's nothing new though, I remember reading through some of the leaked schemes from Barclay's in 2009 https://wikileaks.org/wiki/Barclays_Ban ... 6_Mar_2009" onclick="window.open(this.href);return false; and it was clear that there was no commercial basis to the transactions, they were being carried out for the purpose of solely avoiding tax.

[lesxdp]

Does morally wrong really mean it's wrong because they have too much money and probably I would do the same if I had that amount of money

[ClaretMoffitt]

Does morally wrong really mean it's wrong because they have too much money and probably I would do the same if I had that amount of money

95% of people would, including those on here that proclaim to be so outraged by it.

[JohnMcGreal]

If the media opened these stories by explaining that tax avoidance is entirely legal and above board, and the private business of the investor, then there wouldn't be a story.

Nobody has said that these practices are illegal. They are legal, but they shouldn't be. The aim of investigative journalism is to inform the general public. If an informed general public leads to pressure on the politicians and law makers to correct an injustice such as this, then so be it. We'll be a much better country for it.

Using your logic, nobody should have ever made a fuss about the slave trade, because it was legal at the time.

[lesxdp]

That's the point I was making. It's just mischief making by the press and jealousy from others. Many people have an ISA as (before interest rates dropped) it was a way not to pay "avoid" tax on any interest Does that make them morally wrong or just a sensible thing to do?

[thatdberight]

...an informed general public leads to pressure on the politicians and law makers to correct an injustice such as this...

I look forward to the informed general public's view on these difficult and complex tax matters.

[Cheshire Exile]

" "Rich man uses perfectly legal investment scheme as can be deduced from copies of the properly audited accounts', says newspaper owned by a tax-exempt shell company in the Cayman Islands which thus avoided paying corporation tax when it sold its 50 per cent holding in Auto Trader to Apax Partners in 2008 and which has since managed to prop up the ailing newspaper by investing hundreds of millions of pounds in offshore hedge funds".

[lesxdp]

Nobody has said that these practices are illegal. They are legal, but they shouldn't be. The aim of investigative journalism is to inform the general public. If an informed general public leads to pressure on the politicians and law makers to correct an injustice such as this, then so be it. We'll be a much better country for it.

Using your logic, nobody should have ever made a fuss about the slave trade, because it was legal at the time.

Can you explain why they should be illegal. Not quite understanding the comparison with the slave trade . Are you saying that if you had large amounts of money you had obtained legally fromlets say lottery, inherited, or earned through work or business where you have already paid the necessary tax, that you wouldn't want to protect the money for your future or your family's future

[Sidney1st]

So does anyone know if the outrage bandwagon can be fired up yet and to what level?

[UpTheBeehole]

Nobody has said that these practices are illegal. They are legal, but they shouldn't be. The aim of investigative journalism is to inform the general public. If an informed general public leads to pressure on the politicians and law makers to correct an injustice such as this, then so be it. We'll be a much better country for it.

Using your logic, nobody should have ever made a fuss about the slave trade, because it was legal at the time.

The course of action Garlick took is no longer legal, which should give an idea of how shady his arrangements are.

[Sidney1st]

Is he legal now?
That's the key question.

If he's above board and legal now it doesn't matter.

[aggi]

Some of it looks legal, some of it such, as the loans with no intention to be repaid, are something that aren't legal and HMRC are cracking down on heavily at the moment.

[lesxdp]

The course of action Garlick took is no longer legal, which should give an idea of how shady his arrangements are.

No. All that means is the rules have changed. No different to say speed limit changed from 30 to 40 or vice versa because circumstances have changed. Or 3pts for a win not2 because it's a better idea. If it was legal when it was done it's okay. If it wasn't legal when it was done then it's not okay. Simple really.

[thatdberight]

The course of action Garlick took is no longer legal, which should give an idea of how shady his arrangements are.

I used to get Mortgage Interest Relief At Source. That's not legal any more. Are my arrangements shady?

[thatdberight]

Some of it looks legal, some of it such, as the loans with no intention to be repaid, are something that aren't legal and HMRC are cracking down on heavily at the moment.

Agreed.

What appals me even more is that the 'stars' of Mrs Brown's Boys have that sort of money coming in. For that!?!

[UpTheBeehole]

Is he legal now?
That's the key question.

If he's above board and legal now it doesn't matter.

If he was to take such steps now, it would be illegal.

If he does retire abroad, as he states he intends to, then that will impact on his involvement with being Burnley chairman, but it will mean that his tax avoidance methods will work in a legal manner.

If he stays on as Burnley chairman and takes his pension in the UK, then he'll get a huge tax bill.

He's 54 now, so we'll find out in a few years whether he intends to stay on as Burnley chairman and pay a big tax bill, or whether he'll leave the club in order to pocket the tax he's sought to avoid.

[lesxdp]

I used to get Mortgage Interest Relief At Source. That's not legal any more. Are my arrangements shady?

I think you should offer to pay back all the tax you "avoided " immediately and then seek forgiveness from the general public who did not have the same opportunity

[thatdberight]

If he was to take such steps now, it would be illegal.

If he does retire abroad, as he states he intends to, then that will impact on his involvement with being Burnley chairman, but it will mean that his tax avoidance methods will work in a legal manner.

If he stays on as Burnley chairman and takes his pension in the UK, then he'll get a huge tax bill.

He's 54 now, so we'll find out in a few years whether he intends to stay on as Burnley chairman and pay a big tax bill, or whether he'll leave the club in order to pocket the tax he's sought to avoid.

He could retire abroad and stay as Chairman so there's no choice to make between the two.

[ElectroClaret]

Agreed.

What appals me even more is that the 'stars' of Mrs Brown's Boys have that sort of money coming in. For that!?!

I know. They want executing for that, never mind paying.

[Tall Paul]

He could retire abroad and stay as Chairman so there's no choice to make between the two.

But then we'd be foreign owned!

[gawthorpe_view]

" "Rich man uses perfectly legal investment scheme as can be deduced from copies of the properly audited accounts', says newspaper owned by a tax-exempt shell company in the Cayman Islands which thus avoided paying corporation tax when it sold its 50 per cent holding in Auto Trader to Apax Partners in 2008 and which has since managed to prop up the ailing newspaper by investing hundreds of millions of pounds in offshore hedge funds".

Apax Partners, weren't they involved in one of take over bids for BFC in the late eighties?

[Corky]

Interesting isn't it that it is reckoned that annually Benefit Fraud costs the country £1.2b which is between 0.5 and 1% of social security spending and it is treated as a despicable crime yet tax avoidance overall is estimated to run to £25b. You could argue that it is done with the agreement of the state. What with accountancy firms that promote tax avoidance seconded to government to draw up tax laws.

Weird world we live in; as can be seen by some of the comments above.

[Guich]

Nobody has said that these practices are illegal. They are legal, but they shouldn't be. The aim of investigative journalism is to inform the general public. If an informed general public leads to pressure on the politicians and law makers to correct an injustice such as this, then so be it. We'll be a much better country for it.

Using your logic, nobody should have ever made a fuss about the slave trade, because it was legal at the time.

I don't necessarily agree with you John, but you were making some sense until you compared the tax accountancy trade to the slave trade.

[thatdberight]

Interesting isn't it that it is reckoned that annually Benefit Fraud costs the country £1.2b which is between 0.5 and 1% of social security spending and it is treated as a despicable crime yet tax avoidance overall is estimated to run to £25b. You could argue that it is done with the agreement of the state. What with accountancy firms that promote tax avoidance seconded to government to draw up tax laws.

Weird world we live in; as can be seen by some of the comments above.

So, to summarise, it's interesting that a crime is treated as a crime and something that's not a crime isn't.

You have, I think, a low threshold for "interesting".

[Bin Ont Turf]

From tax avoidance to slave trade, brilliant.

[Espia]

I think what is interesting is that the Government continue to allow it to happen. Is there a financial reason beneficial to the Government for this ? If so, why not talk about it. Or is it that this is just a "boys club" mentality and they're being protectionist about it so they can benefit themselves , either in the present or in the future.

Your average Joe having an ISA is not the same. Yes, it is tax avoidance but it is one which is promoted by the government , for the benefit of the government and the nations economics . Are Off-Shore Tax schemes promoted by the Government ? No, they aren't.

[nil_desperandum]

'The difference between tax avoidance and tax evasion is the thickness of a prison wall'

[Dennis Healey - former Chancellor of the Exchequer]

[HatfieldClaret]

Most people would find a way of paying less or no tax if they could and it effects both ends of the pay scale.

A friend's daughter wants to set up home with the boyfriend, a painter & decorator. He has lived with his parents till now and managed to ensure he's been paid cash in hand and has paid no tax.

Unfortunately, he can't get a mortgage as he has no history of earnings and has no credit rating. Seemed like a good idea at the time.....

[Tall Paul]

Most people would find a way of paying less or no tax if they could and it effects both ends of the pay scale.

A friend's daughter wants to set up home with the boyfriend, a painter & decorator. He has lived with his parents till now and managed to ensure he's been paid cash in hand and has paid no tax.

Unfortunately, he can't get a mortgage as he has no history of earnings and has no credit rating. Seemed like a good idea at the time.....

That would be tax evasion, not avoidance.

[If it be your will]

.

[Guich]

From tax avoidance to slave trade to murder in 40 posts!

[If it be your will]

.

[Rick_Muller]

For me that definitely isn't the story. The story is why it is legal in the first place, we can't rely on citizens' morality.

We don't, for instance, say "Murder is a bit morally questionably, but hey ho, each to their own."

I dont think we actually disagree about this at all, I dont think it should be legal but it is.

Oh, and in reference to your murder statement, can I ask how many people are murdered during a war? During a war it is necessary to "Murder" people and it is morally wrong to do so, but it is also legal.

[If it be your will]

.

[aggi]

For me that definitely isn't the story. The story is why it is legal in the first place, we can't rely on citizens' morality.

We don't, for instance, say "Murder is a bit morally questionably, but hey ho, each to their own."

The issue is generally that there is a reason for the loophole to be there but then new ways of exploiting it will be found.

For instance it is reasonable that tax isn't paid on loans from a business to an individual (imagine having to pay tax when you get a mortgage) but it then occurred to someone that they could funnel income to a company who would then make the loans (tax free) and the individuals put off paying them indefinitely so they'd get the money but no tax.

All reasonable in theory but that last step of never paying back the loan changes the whole dynamic.

[levraiclaret]

For me that definitely isn't the story. The story is why it is legal in the first place, we can't rely on citizens' morality.

We don't, for instance, say "Murder is a bit morally questionably, but hey ho, each to their own."

In relation to pension contributions, the allowance is not tax avoidance but tax deferral as when the pension is drawn in the UK it is taxable. That is not morally questionable, it is the government's incentive to save for your old age and tie up the money for up to 50 years.

What Mr Garlick has done when it was legal was to move his pension fund offshore possibly to a low tax country, that is morally questionable bit.

[Sidney1st]

If he was to take such steps now, it would be illegal.

If he does retire abroad, as he states he intends to, then that will impact on his involvement with being Burnley chairman, but it will mean that his tax avoidance methods will work in a legal manner.

If he stays on as Burnley chairman and takes his pension in the UK, then he'll get a huge tax bill.

He's 54 now, so we'll find out in a few years whether he intends to stay on as Burnley chairman and pay a big tax bill, or whether he'll leave the club in order to pocket the tax he's sought to avoid.

So is he legal with the current rules?

Was he legal with the old rules?

At what point do you have the right to call him shady with out proof if he's following all of the tax laws that are best described as crap?

Calling someone who follows the rules shady can get you in trouble.

[MACCA]

I think you should offer to pay back all the tax you "avoided " immediately and then seek forgiveness from the general public who did not have the same opportunity

Off topic, but are you back from your trip?
If not, when you due back?

[Cirrus_Minor]

It is totally scandalous that these people are allowed to by pass tax rules to avoid payment. Tells you all you need to know about the priorities of our society, especially when we are in supposed times of austerity. They should all hang their heads in shame, including Mike Gatlick and even the queen.

[HatfieldClaret]

That would be tax evasion, not avoidance.

Poor mans avoidance