Connect with us


Can Britain Become A Tax Haven Post Brexit?




Can Britain Become A Tax Haven Post Brexit?

There are many reasons that the United Kingdom is the capital and center of world trade and finance.

It started out with the British Empire choosing and implementing conditions that favored this from hundreds of years ago. 

History is written by the winners, and in this case, the time zones, date lines, main ports, and centers of commerce were indeed mapped out and formed by the British Empire. 

All made with the sole purpose of making trade and commercial deals as favorable as possible for the great map making an empire building nation.

Greenwich Mean Time (GMT) was established in 1675. 

In that year, the Royal Observatory was built in an endeavor to assist mariners (think trade) to determine longitude at sea. 

This became a standard reference time that was slowly stretched out across the country and eventually, the rest of the world. 

It is the Alpha point of all other time zones.

All traders in London agree that the convenience of being able to clock what is happening in the Asian markets at breakfast, segue to the Wall Street markets at lunch, and finish the day with a look back before bedtime, at the Asian markets again, cannot be overemphasized.

[ms_divider style=”normal” align=”left” width=”100%” margin_top=”30″ margin_bottom=”30″ border_size=”5″ border_color=”#f2f2f2″ icon=”” class=”” id=””][/ms_divider]
[ms_featurebox style=”4″ title_font_size=”18″ title_color=”#2b2b2b” icon_circle=”no” icon_size=”46″ title=”Recommended Link” icon=”” alignment=”left” icon_animation_type=”” icon_color=”” icon_background_color=”” icon_border_color=”” icon_border_width=”0″ flip_icon=”none” spinning_icon=”no” icon_image=”” icon_image_width=”0″ icon_image_height=”” link_url=”” link_target=”_blank” link_text=”Click Here To Find Out What It Said…” link_color=”#4885bf” content_color=”” content_box_background_color=”” class=”” id=””]Warren Buffett Just Told His Heirs What He Wants them To Do With His Fortune When He Dies. [/ms_featurebox]
[ms_divider style=”normal” align=”left” width=”100%” margin_top=”30″ margin_bottom=”30″ border_size=”5″ border_color=”#f2f2f2″ icon=”” class=”” id=””][/ms_divider]

This is maybe what Britain has in mind, as it takes steps to plan its way out of the European Union after the Brexit referendum. 

Politicians in Westminster are now looking for a way to continue its dominance as the center of global capital – just as it has done for centuries.

One of these ideas that is gaining traction in the corridors of power is – to turn the post-Brexit United Kingdom into a tax haven.

This is not an altogether unexpected possibility. 

Current non-sovereign jurisdictions that are commonly labeled tax havens in proximity are:

  • Jersey (U.K.)
  • Isle of Man (U.K.)
  • British Overseas Territories (Bermuda, British Virgin Islands, Cayman Islands).

The corporate tax rates seen on a global scale that the British government is predicting for the next few years are indeed impressive. 

The graph below places the United Kingdom at the top of the list.


In the aftermath of the June 23 Brexit vote results, Prime Minister David Cameron, soon to announce his resignation, and his cabinet called for the cutting of all top corporate tax rates from 20% down to 15%. 

Theresa May, the Prime Minister’s successor, has not touched on that proposal since she took office this month on July 13.

The scrapping of corporate tax altogether is being called for by some pro-Brexit (Cameron supporting) members of Parliament. 

More than a few economists expect the proposal to be revisited, or at the very least it must be used as a bargaining chip to win more favorable terms from a still disgruntled the European Union.

Throughout Europe, finance ministers view tax competition as a worrying prospect. 

With this in mind, European leaders recently agreed to plan on curtailing tax loopholes – they can cost an approximately estimated $100 billion per annum in lost revenue for countries.

With a quick example to illustrate the point:  the graphic below clearly shows that if there is a significant discrepancy between tax rates in countries, it results in a decided unfair advantage for the company in the lower corporate tax bracket.  


The EU has sanctioned the following countries with permissive and conciliatory tax codes:

  • Ireland
  • Luxembourg
  • The Netherlands

This has facilitated multinationals like Starbucks, Microsoft, and Apple to sidestep tax bills and shift profits.

The concern is that to gain more cooperation from the EU, Britain may be induced to offer lower rates and more tax breaks. 

This will lead to a knock on effect of making the rest of Europe within the EU less competitive.

It might be a humbling experience for Britain to be able to observe the tax haven economic development tactics that are being used by the British Overseas Territories listed above. 

The benefits of this are even more clearly seen closer to home in Ireland, which recently announced record GDP growth and had a corporate tax rate set at 12.5%.

These entirely orthodox strategies have been credited with resuscitating the Irish economy and helping the country build a technology and pharmaceutical sector. 

Some U.S. multinational companies, such as Medtronic, have merged with some local Irish enterprises in an apparent inversion. 

This resulted in the official headquarters of the company and some of its assets, moving to Ireland.

Economists are quick to warn that these tactics may not work for Britain. 

Steep tax cuts are more cost effective for the economies of small countries. 

In countries with underdeveloped business sectors, any losses of tax revenue are offset by new development.

This is clearly not a description that fits a post-Brexit Britain.

Britain is still the hub of global financial services, however. 

Britain is now free to change any taxes that are affecting that all-important sector, now that it has shaken loose of the restraints placed on the country by the European Union. 

In return, the EU could put restrictions on its markets in retaliation. 

EU countries could discriminate against any U.K attempts to become a tax haven following on from that.

The United Kingdom’s strategy could change from a tax based one to a regulatory one taking all these constraints into consideration.

Britain is not in a position to be able to tempt multinational corporations into relocating their headquarters to London. 

In the past, corporate tax cuts resulted in remarkably few jobs being created for the population even if they did cause a rise in the base average GDP.

According to the opinions held by some prominent political economists, when the United Kingdom leave the European Union altogether, the real criteria will be with loosening the currently hyper-tight environment, financial and labor regulations and an unsafe tax haven.


Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


STUDY: Number of Billionaires Doubles in Last Decade




Number of Billionaires Doubles in Last Decade
Image via Shutterstock

The number of billionaires has doubled in the past decade and the world’s wealthiest 2,153 people controlled more money than the poorest 4.6 billion combined last year, the charity Oxfam said Monday.

Meanwhile, unpaid or underpaid work by women and girls adds three times more to the world’s economy each year at least $10.8 trillion than the technology industry, the Nairobi-based charity said in its “Time to Care” report.

Women around the world work 12.5 billion hours combined each day without any pay or recognition, while the world’s 22 richest men have more wealth than all the women in Africa.

“It is important for us to underscore that the hidden engine of the economy that we see is really the unpaid care work of women. And that needs to change,” Amitabh Behar, CEO of Oxfam India, told Reuters.

“Our broken economies are lining the pockets of billionaires and big business at the expense of ordinary men and women. No wonder people are starting to question whether billionaires should even exist,” Behar said ahead of the annual World Economic Forum in Davos, where he will represent Oxfam beginning Tuesday.

“Women and girls are among those who benefit least from today’s economic system,” he added.

There will be at least 119 billionaires worth about $500 billion attending Davos this year, according to Bloomberg, with the highest contingents coming from the US, India and Russia.

“The very top of the economic pyramid sees trillions of dollars of wealth in the hands of a very small group of people, predominantly men,” the Oxfam report said.

“Their wealth is already extreme, and our broken economy concentrates more and more wealth into these few hands,” it said.

To highlight the inequality, Behar cited the case of a woman called Buchu Devi in India who spends up to 17 hours a day walking almost two miles to fetch water, cooking, preparing her kids for school and working in a poorly paid job.

“And on the one hand you see the billionaires who are all assembling at Davos with their personal planes, personal jets, super rich lifestyles,” he said.

“This Buchu Devi is not one person. I in India encounter these women on a daily basis, and this is the story across the world. We need to change this, and certainly end this billionaire boom.”

Behar said that to remedy the problem, governments should make sure above all that the rich pay their taxes, which should be used to pay for amenities such as clean water, health care and better schools.

“If you just look around the world, more than 30 countries are seeing protests. People are on the street and what are they saying? That they are not to accept this inequality, they are not going to live with these kind of conditions,” he said.

Source: New York Post
Vanguard News

(c) 2020 2019 Vanguard Media Limited, Nigeria Provided by SyndiGate Media Inc. (

Continue Reading


Pump Prices to Edge up After Attack on Iranian General, but Long-Term Effect Unclear

Editorial Staff



By Jeff Ostrowski, The Palm Beach Post, Fla.

Motorists soon will see the effects of President Donald Trump’s decision to kill a prominent Iranian general. Whether pump prices rise a little or a lot depends on how quickly international tensions intensify.

Florida gas prices climbed an average of 7 cents a gallon in the past three days and could increase an additional 5 cents, AAA – The Auto Club Group said Monday.

The 7-cent increase was coming even before the U.S. air strike Thursday that killed Iranian Maj. Gen. Qassem Soleimani. That hike was a result of a rise in the price of crude oil in December.

News of the targeted killing of Soleimani sent crude oil surging nearly $2 per barrel on Friday. An increase of that magnitude typically translates to a 5-cent hike at the pump, AAA said.

The U.S. benchmark for crude oil traded Monday just above $63 per barrel, the highest level since May 2019. The price of oil makes up about half the price of a gallon of gas.

“What happens in the Middle East can have a direct impact on Americans’ daily lives by influencing what they pay at the pump,” said AAA spokesman Mark Jenkins. “Crude prices rise when there’s a threat of war, because of concerns over how the conflict could hamper supply and demand.”

Oil analyst Tom Kloza of energy firm OPIS agreed that pump prices in Florida likely will rise about 5 cents a gallon in the coming days.

“Then I have a hunch that things are going to calm down,” Kloza said Monday. “I don’t think we’re looking at $3 gas.”

The national average pump price Sunday was $2.585, while the Florida average was $2.526, AAA said.

Kloza expects only modest increases in part because of the timing of the attack. January is always a slow month for gas consumption in the United States.

There’s also the reality that sanctions leave Iran unable to export oil. Complicating the calculus is Iraq’s response to the U.S. attack. The drone strike on Soleimani took place in Baghdad, and some Iraqi politicians considered the assault an affront to Iraqi sovereignty.

While there’s no Iranian oil supply to be disrupted by a war, Iraq is an important producer.

Trump keenly watches oil prices and realizes that a price spike might erode his support in this year’s presidential election, Kloza said.

At the same time, Kloza added, “This president has proven to be unpredictable.”

Trump’s response has been typically uneven. Delivering an official statement at the Mar-a-Lago Club in Palm Beach, Trump’s tone was measured. He said the targeted killing was designed to pre-empt Soleimani’s planned attacks on American diplomats and soldiers.

“We took action last night to stop a war,” Trump said Friday. “We did not take action to start a war.”

However, over the weekend, Trump took to Twitter to threaten attacks on Iranian cultural sites.

“The United States just spent Two Trillion Dollars on Military Equipment,” Trump wrote Sunday on Twitter. “We are the biggest and by far the BEST in the World! If Iran attacks an American Base, or any American, we will be sending some of that brand new beautiful equipment their way…and without hesitation!”

##IFRAME_1##Iran has vowed vengeance, but military experts say the nation isn’t powerful enough to wage a direct war against the U.S.

“It’s still far too early to know how much of an impact this conflict will have overall on prices at the pump,” AAA’s Jenkins said.

Continue Reading


Stocks Rally Despite Impeachment News

Editorial Staff



Stocks rose on Thursday as investors looked past the news of President Donald Trump’s impeachment as well as mixed U.S. economic data.

The Dow Jones Industrials advanced 53.85 points to begin trading at 28.293.13

The S&P 500 recovered 4.93 points to 3,196.07

The NASDAQ added 19.39 points to Wednesday’s all-time record, at 8,847.12.

The S&P 500 is up nearly 7% since House Speaker Nancy Pelosi launched a formal impeachment inquiry in September.

Cisco Systems was the best-performing Dow component, rising 1.6%. The consumer staples and real estate sectors led the S&P 500 higher, gaining 0.4% each. Micron Technology shares also contributed to Thursday’s move higher. Conagra shares surged more than 14% and were on pace for their biggest one-day gain since Oct. 16, 1989.

Micron shares climbed 3.5% on the back of strong quarterly results. The chipmaker posted earnings per share and revenue that topped analyst expectations.

On the economic data front, weekly jobless claims fell to 234,000 from 252,000 the week before. However, economists expected claims to fall to 225,000.

Meanwhile, the Philadelphia Federal Reserve’s business conditions index fell to 0.3 in December from 10.4 in the previous month. Economists expected the index to slip to 8.

The Democrat-led House of Representatives voted Wednesday to impeach Trump for abuse of power and obstruction of Congress. Trump became only the third president to be charged with high crimes and misdemeanors and will now face a trial in the Republican-controlled Senate.

Prices for the 10-Year U.S. Treasury were lower, raising yields to 1.94% from Wednesday’s 1.93%. Treasury prices and yields move in opposite directions.

Oil prices gained seven cents to $61.00 U.S. a barrel.

Gold prices moved forward $1.80 at $1,480.50 U.S. an ounce. Copyright © 2019 Media Corp. All rights reserved.

Continue Reading


Copyright © 2019 The Capitalist. his copyrighted material may not be republished without express permission. The information presented here is for general educational purposes only. MATERIAL CONNECTION DISCLOSURE: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this page and may receive commissions from purchases you make on subsequent web sites. You should not rely solely on information contained in this email to evaluate the product or service being endorsed. Always exercise due diligence before purchasing any product or service. This website contains advertisements.