UK's Bankers' bonus tax avoidance schemes so complex judges named them after Houdini; 12 year battle ends

wo giant banks used elaborate ‘Houdini’ schemes to help hundreds of staff dodge tax.

Deutsche Bank and UBS enriched their senior executives in London by routing more than £180million of bonuses through notorious tax havens. The money was channelled into companies set up in the Caymans and Jersey purely to collect the payments.

UK's Bankers' bonus tax avoidance schemes so complex judges named them after Houdini; 12 year battle ends Article-P-b527c539-448f-4bbe-a035-cb23e689db01-1rz8rDPrDy14a2e72187e6dd3d65-699_634x356

UK's Bankers' bonus tax avoidance schemes so complex judges named them after Houdini; 12 year battle ends Article-P-b527c539-448f-4bbe-a035-cb23e689db01-1rz8rDPrDy14a2e72187e6dd3d65-699_634x356

The bankers saved around £100million in national insurance and income tax in 2004 before the share schemes were outlawed. Yesterday a judge said the arrangements had no purpose other than to avoid tax. The firms had taken advantage of laws designed to encourage employee share ownership.

The BBC reported yesterday that Business Secretary Sajid Javid had been part of the scheme at Deutsche when he was a senior investment chief at the bank. A spokesman for the Business Secretary insisted he had not benefited from the arrangements and had paid all his taxes.

However the spokesman refused to deny that Mr Javid had been in the Deutsche scheme itself. ‘Sajid Javid was paid with all tax deducted already,’ the spokesman insisted. ‘He received no benefit whatsoever from this scheme and all taxes due have been paid.’

Mr Javid left Deutsche in 2009 prior to becoming an MP in the 2010 election.

He had joined the bank in 2000 and rose to become managing director in 2004.

Senior directors were approached in late 2003 over bonuses being paid in the form of shares. Mr Javid’s spokesman refused to answer further questions on the precise nature of the arrangements.

The revelations may leave the minister open to accusations of hypocrisy. During his 18-month stint at the Treasury, he spearheaded a drive to crack down on tax dodging, declaring the closure of ‘all avenues for tax avoidance, whether it is companies or individuals’.

Yesterday the Supreme Court ordered Deutsche and UBS, which employ more than 14,000 staff in London, to pay back around £50million each to HMRC – plus £35million in interest.

The ruling brings a bitter 12-year battle with HM Revenue & Customs to an end.

The £135million haul is £5million more than US giant Google agreed to pay for a decade’s worth of taxes, following a controversial deal with the Treasury.

The Chancellor has pledged to wage war on aggressive tax avoidance, with the meagre or non-existent UK tax bills of huge companies including Facebook, Amazon, Starbucks and Google having sparked public uproar.

In his withering judgment, Lord Justice Robert Reed said: ‘In our society a great deal of intellectual effort is devoted to tax avoidance.’

Referring to the escapologist Harry Houdini, he added that Deutsche and UBS were guilty of ‘the most sophisticated attempts of the Houdini taxpayer to escape from the manacles of tax’.

Lord Justice Jonathan Mance said the schemes were ‘commercially irrelevant’ and had no purpose other than to escape taxes, which is not what the government intended when they created the rules.

Read more: http://www.dailymail.co.uk/news/article-3483942/Supreme-Court-judges-rule-against-Houdini-tax-avoidance-schemes.html#ixzz42Tx3L9zF

UK's Bankers' bonus tax avoidance schemes so complex judges named them after Houdini; 12 year battle ends

UK's Bankers' bonus tax avoidance schemes so complex judges named them after Houdini; 12 year battle ends

Anarcho-Capitalist Categorical Imperatives

AnCaps' Laissez-faire Free Trade Zone