Super Rich Paying No Tax

21 June 2008

Only a fraction of Britain's super-rich are paying income tax, the Standard reveals today.

 RICH MAN'S PLAYGROUND: Ferraris, parties and luxury properties are all on the super-rich menu, but income tax is not.

But only 65 paid income tax, according to the latest figures obtained under the Freedom of Information Act. The rest use a battery of sophisticated but legal techniques to avoid paying.

It is not known exactly how much money is being lost to the taxpayer in this way but analysis by the Standard suggests it could be as much as £2bn a year.

The revelation will place more pressure on Gordon Brown to close the loopholes that have made Britain a leading tax haven. One private equity partner has admitted that tax breaks mean he pays a lower rate than his cleaner.

Treasury figures obtained by the Standard show that 65 people who filed a tax return in 2004-05 declared a taxable income of £ 10m or more.

But, according to the Sunday Times Rich List, there are more than 350 people in Britain with a fortune of at least £200m-enough to generate a return of £10m-a year through dividends, interest, rents and profits.

Furthermore, an estimated 30 City traders earn at least £10m, as do 30 company directors, including top hedge fund managers, private equity executives and industrialists such as vacuum cleaner tycoon Sir James Dyson.

A handful of famous names, including David Beckham, Sir Elton John and Harry Potter author JK Rowling, are also regularly in the 'eight-figure club'.

Liberal Democrat Treasury spokesman Lord Oakeshott said: 'These devastating figures prove that the richer you are, the less tax you pay in Brown's Britain. Gordon Brown won't get a grip on rich men's tax-dodging when close adviser Geoffrey Robinson used offshore trusts and Sir Ronald Cohen [who bankrolled Mr Brown's leadership campaign] conceals whether he is domiciled in Britain for tax purposes.'

Latest figures show that Britons earning more than £1m a year paid a total of £4.6 bn in tax in 2004-05, a tax rate of 35.9%. But it appears most of that was paid by the 'poor rich' who earn just over seven figures.

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