Osborne & Cameron Tax Avoiders
Among the biggest beneficiaries of tax avoidance are the tax avoiders George Osborne and David Cameron.
When the Conservatives got in, the Professional Contractors Group (now IPSE) thought that this would be great for contractors.
After all, the Conservative Party liked to encourage small businesses, didn’t they?
The Conservative party gave nods and winks to IPSE that they would ‘look at’ IR35 again.
The world suddenly seemed much brighter for contractors and freelancers.
Promises to Contractors
However, their ‘promises’ to the freelancers group were like the predictions made by the three witches to Macbeth.
The Conservatives were true to their word. They did ‘look at’ IR35 again and decided to keep it.
They said that, if they abolished IR35, there would be a danger of contractors dumping their umbrella companies and going back to limited companies, or personal servcie companies as they like to call them.
Of course they would have – but Cameron and Osborne could have worked that out before the election.
Umbrella Company Contractors Pay More Tax
Umbrella Company contractors pay an average of £10,000 a year more tax and national Insurance than Limited Company contractors.
As there are 200,000 umbrella company contractors that would have been £2 billion a year that the Chancellor would have got less in tax from contractors.
This was never likely to happen – but that didn’t stop Cameron and Osborne seeming to promise it before the 2010 election.
Travel and Subsistence Allowance
Since the new tax year in April this year, Chancellor George Osborne is stopping umbrella company contractors from claiming travel and subsitence allowance against tax.
Just as Labour saw many contractors as disguised employees, so Osborne and Cameron appear to see umbrella company contractors, who are handled as employees of the umbrella company for tax purposes, as disguised contractors.
They clearly see them as tax avoiders and onshore umbrella companies as tax avoidance vehicles.
David Cameron’s Inheritance
That’s a bit much, considering that Cameron’s inheritance came from money his father Ian made from pushing offshore schemes like offshore umbrella companies.
It’s also a bit rich from Osborne considering that he has a share in an offshore family trust worth £4.5m.
When asked about it Osborne said that he will pay the correct tax when the money cames back onshore.
As anyone who knows anything about offshore money, the main thing about it is that the money never comes back onshore.
Those with offshore funds will be given loans in lieu of the money.
They never pay back the loans and the loans lapse on he person’s death.
Online IR35 Test
Now Cameron and Osborne want all contractors in the public sector to have to undergo a new online IR35 test.
One would think that this is a trial run for all contractors eventually.
Chancellor Osborne and Prime Minister Cameron do not see contractors as small businessmen and woman but simply as tax avoiders who should be paying the same tax as permanent employees.
Thatcher’s Tax Avoiders Legacy
It was Mrs Thatcher who paved the way for offshore tax avoidance in 1979.
One of the first changes she made as Prime Minister was to stop money sent offshore from being taxed.
That set in train a mad goldrush for Tory grandees and sponsors such as Lord Ashcroft, the Tory party’s main sponsor, Ian Cameron, David’s father and Lord Astor, his father-in-law.
UK Contractors Cashing In
In recent years UK contractors have taken advantage of this by joining both offshore umbrella companies and tax efficient onshore schemes which van see them keep 84% to 90% of their money.
You could call it ‘doing a Cameron’.
However, thes tax avoidance schemes were set up for those ‘on the inside’ and not for those that they see as ‘on the outside’, i.e. comedians, show business personalities and UK contractors.
Sauce for the Goose
They would like to stop these ‘outsiders’ using the same schemes as the ‘insiders’ but if they changed the laws they would be changed for everyone, including Cameron, Obsorne, Lord Astor and Lord Ashcroft.
So, they satisfy themselves by calling people who avoid tax, like comedian Jimmy Carr and UK contractors, as ‘morally repugnant’ while operating through the same tax avoidance schemes thenselves.
To find out more about these tax avoidance schemes, as used by the likes of Cameron and Osborne, click on Offshore Umbrella Companies.