Rich and famous offshore tax investigation

By Sam Smith and Jess Watkins

The Paradise Papers leaked the names of the rich and famous who are allegedly avoiding tax by investing in offshore tax-avoidence schemes. Although not illegal, is offshore tax avoidence morally wrong?

The Paradise Papers – what are they?

Lewis Hamilton and his £16.5 million private jet

Lewis Hamilton is one of many high-profile celebrities who is facing questions about his financial affairs following the Paradise Papers leak. 

The Formula One champion is under fire over allegations of tax avoidance on his luxury £16.5 million jet. The 32- year-old’s social media accounts show evidence that he has used the jet for personal trips around the world.  

Two day holiday before the greatest race weekend of the year!! #blessed #greatful #GodIsTheGreatest

A post shared by Lewis Hamilton (@lewishamilton) on

The leak of legal documents from law firm Appleby have caused revelations of hidden wealth amongst many well-known individuals and companies including the Queen.  

Former US presidential candidate, Bernie Sanders said: “The major issue of our time is the rapid movement toward international oligarchy in which a handful of billionaires own and control a significant part of the global economy.  

The Paradise Papers shows how these billionaires and multinational corporations get richer by hiding their wealth and profits and avoid paying their fair share of taxes.

Although Hamilton may have been permitted to have the jet for business purposes, the leasing deal set up was false and did not meet the terms of the EU and UK ban for private use. BBC’s Panorama has seen documents suggesting that the Formula One champion was proposing to make private flights a third of the time.  

The leaked documents held by the law firm propose that Hamilton’s advisors created a VAT registered leasing business on the Isle of Man, in an attempt to avoid the EU and UK rules forbidding VAT refunds on aircrafts used by private individuals. 

Hamilton’s lawyers explain that a tax barrier review has been carried out and the outcome of the arrangement was lawful.  

Corbyn’s views on the Queen’s taxes

Jeremy Corbyn also has very strong views on the Paradise Papers leak, as well as the monarchy. In June he refused to bow to the Queen.

When asked at the CBI conference whether the Queen should apologise for making overseas investments, the Labour leader has said anyone putting money into tax havens should “not just apologise for it, recognise what it does to our society”.

Corbyn also called for a full inquiry, public lists of company ownership, and a new tax enforcement unit to tackle tax evasion.

The Queen’s private estate invested £10 million in offshore funds but Buckingham Palace is yet to comment.

A spokesperson for the Duchy of Lancaster, who handles the Queen’s private wealth, said: “We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimate.

The Queen voluntarily pays tax on any income she receives from the Duchy.

Meanwhile, the chief executive of Her Majesty’s Revenue and Customs (HMRC), Jon Thompson, has vowed to “chase down” and “look at every case very seriously”.

He told the Commons Public Accounts Committee that HMRC had asked to see the leaked ‘Paradise Papers’ – the name given to the leaked documents.

Thompson said there were 66 ongoing criminal investigations into the Panama Papers, which exposed tax avoidance and evasion in April 2016.

Thompson said, “[the 66 investigations] gives you some sense about how long quite complicated tax cases take to bring to some sort of fruition.”

Keep checking back on OvertimeOnline.co.uk for updates and follow up stories.

Information sourced from BBC

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