From a recent FT:
JP Morgan is nearing a settlement with the UK government in which the US bank and its employees could pay close to £500m in back taxes that were avoided through the use of an offshore trust for bonus payments.
The Wall Street bank is in the final phase of winding up the Jersey-based arrangement and has asked more than 2,000 current and former employees to contribute to the settlement. Individuals who choose not to participate voluntarily could face a more expensive tax bill once their trust assets are liquidated...
Here's the fun part:
Participants in the scheme said JP Morgan had given them until Friday to volunteer to pay tax at a rate of their choosing in a “blind auction” that would be used to establish an average contribution rate. If the auction fails to generate enough money to pay the settlement, participants who bid below the overall average would be excluded from the agreement and face a 52 per cent tax liability when the trust’s assets are liquidated and repatriated. Several participants said they had volunteered to pay tax at a rate of 40 per cent.
I'm not sure why HMRC thinks that the JP Morgan people won't just agree tactics between themselves beforehand and rig the whole thing. I suppose HMRC's only insurance is that the JP Morgan people are all untrustworthy so-and-so's and they know it.
And surely HMRC must have some sort of target minimum tax figure in mind, even HMRC does not how much was squirrelled away like this and hence what the tax "should" have been. The article says "between £2 bn and £9 bn", does this not show up in their accounts or anything? If not, they all ought to be sent to prison anyway. Or is HMRC colluding with JP Morgan, in which case they can bugger off to prison as well.
Tuesday, 11 December 2012
From a recent FT: