Will the UK Ever Go as Far as America in Offshore Tax Clampdown?

If you weren’t aware of the fact already, America takes an even harder line than the UK when it comes to its citizens and taxing them.  For example and to put it simply, an American is liable for US taxation on income, assets and gains no matter where in the world they live and no matter where in the world said income, assets or gains are located, herald from or are earned.

Of course, the nation has many double taxation agreements in place, but that doesn’t detract from the unpleasantness of the taxman’s reach for the likes of Americans living and working abroad who effectively have no other ties with their ‘homeland’ than that they have to pay taxes to it!  The most recent news is that America has now put so much pressure on Switzerland that it has forced the nation to reveal American bank account holders’ details just in case they are not paying full taxation on what they have squirreled away in that country.

So, will the UK ever go as far as America in terms of an offshore tax clampdown?  In this report we’re going to look at facts and opinions about how Britain and America may well be thinking of advancing their Big Brother stance that is eroding the privacy and freedom rights of their citizens.

Currently both Britain and America have a so-called ‘tax amnesty’ running, (the American amnesty has just been extended by 3 weeks), to ‘encourage’ citizens who have undeclared assets and cash overseas and offshore to come forward and confess!  The incentive for coming clean in the UK is that you will face less harsh fines on undeclared taxation owed, and in America the incentive is more along the lines of ‘tell us now and come clean, or we’ll probably find out anyway and then you’ll really be in trouble.’  You see whilst we Britons may think HMRC is out to get us and rob us of every penny we earn, it seems that things are far worse in America.

In America you may be aware that the IRS (Inland Revenue Service) has been attacking the Swiss banking giant UBS for some time, attempting to crack it open and force it to reveal which US citizens have assets held therein – UBS has been resisting pressure because it has a duty to the account holders relating to their ultimate privacy.  However, so powerful is the US that it has managed to force the Swiss government to crack instead, and in turn they have forced UBS to give the American authorities access to the key data they wanted.

It’s thought that there are over 50,000 American account holders at UBS, and for starters America will be looking at 4,450 of those.  However, they have not publically revealed which criteria will be used to pick which accounts they will be examining – so it’s all about America playing chicken with their citizens in a bid to force them to come forward and reveal what they have where.  Of course, there are those who will rightly say ‘if they have nothing to hide they have nothing to fear.’  But we’re convinced this is far less about tax evasion and far more about Big Brother having access to anything and everything they want to know about you.  Of course, it is heavily veiled behind a nation’s leader (whether Republican or Democrat) standing up there and castigating alleged tax evaders and saying they rob the nation of billions every year, force food from the hands of starving babes and are basically evil personified.  And what a great tactic to get people to begin turning on each other and ringing up confidential hotlines if they suspect their neighbour hasn’t declared all their earnings, otherwise how else would the neighbour be able to afford a new car when the person ringing the hotline can’t (didn’t they used to do something similar in communist Russia?)

So will Britain ever be as bad as America?  Well, what’s stopping it?  Certainly not morals – after all the American government as well as its massive corporations and even individual politicians go offshore and optimise their taxation - and Britain is in the self-same position.  Not cash flow either, because Britain quite possibly needs more money and is in greater debt than America so it’s not a case that America needs to find lost billions in avoided tax revenue and the UK doesn’t.  So what about respect for its citizens?  Well, no, not that either because as a bottom line both America and Britain commit their sons to overseas conflicts without much of a care.  And now that America has set an explosive precedent by blowing a hole in Swiss banking secrecy, it will be even easier for Britain to follow suit.

However – at the moment Britain does allow its citizens a little more freedom than America does.  We are still allowed to vote with our feet and turn our backs on a nosy nation by moving abroad.  As long as we don’t move to America and try and get citizenship, there is pretty much nowhere else in the world, (with the exception of perhaps North Korea) where you will have less freedom than the UK.  So, if you are concerned that America and Britain are using a tax smokescreen to gain greater control over you and your life, you know what you can do if you’re British don’t you?  Move abroad and escape. 

Sadly, if you’re American you’re screwed.