Sunday, May 14, 2006

Soggy Clippings From The Curate's Lawn

Tim Worstall says the necessary on the Kill The Sick Bill.

Computational Racism ?

BBC News 24 interview not the planned guest, but his taxi driver.

Good news for some :

The poor state of the economy is having an effect on infrastructure
Zimbabwe's inflation rate has surged past the 1,000% mark signalling that the African country is struggling to keep its economy functioning normally.

Not the poor Zimbabweans, but for those who (up to the last budget) avoided tax via offshore loans.

It was rather beautiful if you like that sort of thing. Instead of being paid for your work, you worked via a company (usually in the IOM or Channel Islands) who the client paid. They then didn't pay you much, but they gave you a large, repayable loan in a carefully chosen foreign currency. Carefully chosen from a range of basket case economies so that by the time repayment was due the loan was worth about a fiver. Zimbabwean currency was a favourite. When you got the loan, of course, you immediately converted it into a solid currency at whatever the going rate was.

I wonder on what grounds the IR are challenging ? Presumably if the rate of interest was non-commercial ?


Anonymous said...

This tax dodge will not work. As far as HMR&C is concerned:

1. the fee for services rendered is what your offshore company received in sterling or sterling equivalent at the time it was received or deemed to be received.
2 you and the "payer" or "lender" can call whatever was received a loan, a fee or an elephant, but as far as HMR&C is concerned, it's income.
3. if you are resident in the UK and you control the offshore company, the company is (for tax purposes) resident in the UK and liable to UK tax.

Sorry - this tax dodge doesn't work.

AntiCitizenOne said...

A pity as income tax is an abomination.

Serf said...

signalling that the African country is struggling to keep its economy functioning normally.

On what terms has the Zimbabwe economy been functioning normally f?or the last few years?

Totally misleading statement.

Squander Two said...

The foreign-currency-loan thing is a way of getting free money. Even if that profit is then taxed, it's still free money. It works regardless of whether it's a tax dodge, unless I've missed something.

Laban said...

umbongo - I borrowed 70k from a building society to buy a house. Should I have declared the money as income ?