TUC report reveals celebrities’ favourite methods of tax avoidance

| September 5, 2012 | 0 Comments

By
This Is Money Reporter

01:51 EST, 5 September 2012


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03:17 EST, 5 September 2012

TUC's spoof magazine offering celebrities satirical advice about tax avoidance

TUC’s spoof magazine offering celebrities satirical advice about tax avoidance

Celebrities, the super-rich and corporations are using a whole array of methods to escape paying tax, costing the public purse around £25billion a year, according to a new report.

Celebrity tax dodgers use offshore trusts, tax havens and transferring funds to wives or civil partners to escape paying their fair share of tax, the study by the TUC revealed.

The union published the tax avoidance measures in a spoof celebrity-gossip magazine, Kerching! A Celebrity Guide to Tax Dodging.

The guide offers celebrities satirical advice about the most popular ways of avoiding tax, as part of its campaign for action against celebrity tax dodgers.

These include ensuring income taxed in the UK ends up in an offshore company or trust – a method apparently once used by comedian Jimmy Carr – although he says he has now stopped using it.

It also suggests that sports stars can pay tax separately on their image rights, at a much lower rate than if they were received as part of their salary.

The income can be diverted to other family members to reduce the effective tax rate, or offshore in the case of foreign sporting stars.

The TUC ‘guide’ also claims the domicile rule was said to be the tax dodger’s best friend, allowing the super-rich to live in the UK but place most of their income offshore.

Recent investigations have also revealed that some BBC presenters, highly paid civil servants and NHS workers use some of these strategies as well.

Senior NHS executives were told last month to stop paying interim senior staff off-payroll, according to a letter leaked to the Health Service Journal (HSJ).

Working off payroll means that workers are not taxed at source and so opens up the possibility of avoiding paying tax using other tax statuses.

One high profile method is channelling pay through private companies and agencies. 

Fiona Bruce

Wayne Rooney

Fans: The structure is popular among high-paid celebrities such as Wayne Rooney and presenter Fiona Bruce

The structure is popular among high-paid celebrities such as Premiership footballers and TV presenters, including Manchester United striker Wayne Rooney and BBC presenter and newsreader Fiona Bruce.

TUC General Secretary Brendan Barber said: ‘The overwhelming majority of people in the UK have little choice over the amount of tax they pay and unlike big corporations and super-rich celebrities don’t have the means to employ expensive accountants to help them avoid paying their fair share of tax.

‘Each year billions of pounds which the super-rich should be paying in tax leaves the country and is lost to the public purse. Meanwhile, the Government’s insistence that rapid spending cuts are the only way to reduce the deficit, no matter what effect austerity is having upon the UK economy, means that it is ordinary families who are suffering while those most able to afford to pay more get away virtually scot-free.’

Fears: Ministers say the practice of allowing officials to be paid through a personal company has become widespread

Fears: Ministers say the practice of allowing officials to be paid through a personal company has become widespread

Mr Barber called on the Chancellor to act to put an end to tax avoidance, by closing down loopholes used by super-rich celebrities and their accountants to escape paying.

He added that taking action could make a real difference to public finances and take the pressure off the ‘little people who are bearing the brunt of the Government’s austerity measures’.

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