The Sunday Times Rich List this morning detailed the huge sums of wealth concentrated in the hands of the UK’s super rich.
The 350 richest individuals and families in the UK hold combined wealth of £795 billion. “A sum larger than the annual GDP of Poland”, The Sunday Times comments. Meanwhile 3.1 million emergency food parcels had to be handed out to feed people in the UK in the year up to March. A record high. The Rich List makes for hard reading in this context. I have good news for you though. People aren’t resigned to this spiraling wealth inequality. They know that the wealth of the super rich can and must be taxed more – to save our public realm. Public back higher taxes on the rich Our new research shows there's a strong public appetite for taxing the super rich more. A majority (64%) of people in the UK would be more likely to vote for a political party at an election if it was committed to higher taxes on the wealthiest to invest in the NHS and public services. We put our specific wealth tax proposal to people, and they supported it. 72% of respondents indicated their support for a 1-2% tax on assets over £10 million that would affect around 20,000 people and could raise up to £22 billion a year. You can read more about our six wealth tax policies that could raise £50 billion a year. Shut down unfair loopholes People also support closing tax loopholes exploited by the rich and powerful. More than four in five people (83%) think that the government should prioritise closing down tax loopholes that are ways of working the system to legally pay less tax. Our research identifies just 5 tax loopholes used by the super rich, which if closed could raise £7 billion a year. Taxing the wealth of the very richest is a vote winner and a sensible way to help fix the country. With an election looming, politicians would be wise to acknowledge this. A victory in our tax havens campaign A senior government minister has spoken out against tax havens. We think the pressure from our campaign is getting to him. Deputy Foreign Secretary Andrew Mitchell said tax havens like the British Virgin Islands must reduce financial secrecy in their jurisdictions. In comments to think tank Bright Blue, Mitchell said the British Overseas Territories and Crown Dependencies must introduce public registers of company ownership to reduce money laundering. His comments follow our mass-email campaign to MPs, demanding an end to tax avoidance in British territories. Over 4,500 of you have sent messages to your MP – demanding action against British tax havens. Including 9 emails directly to Andrew Mitchell MP.
Ask your MP to stop tax havens:
We are making great progress. MPs are reading and being convinced by the emails you have sent. For a government minister to come out in favour of ending tax haven secrecy is truly amazing and testament to our strength. It is important that MPs understand that this is an issue constituents truly care about. The more emails they receive, the more pressure they will be under to act.
Majority of people more likely to vote for party committed to higher taxes on the wealthiest to pay for NHS and public services
17 May, London - A majority (64%) of people in the UK would be more likely to vote for a political party at an election if it was committed to higher taxes on the wealthiest to invest in the NHS and public services. This is one of the findings of new public opinion research released today that also shows the public support major changes to the tax system. New public attitudes research, commissioned by Tax Justice UK, and undertaken by FocalData, shows the overwhelming popularity of taxing the wealth of the richest. It comes at the same time as the launch of the Sunday Times Rich List. This year’s ‘Rich List’ demonstrates the massive accumulation of wealth by a tiny minority of people and families in the UK. Rachael Henry, Head of Advocacy and Policy at Tax Justice UK said: “Taxing the wealth of the very richest is an extremely popular policy - a vote winner - and an incredibly sensible way to help fix the country. People in Britain are really struggling and so are public services. The NHS is wounded, getting an NHS dentist is akin to a lottery win, and GP surgeries are creaking under pressure. Politicians need to see the wood for the trees and use the tools available to them to inject life back into the country.” When told that a 1-2% tax on assets over £10 million would affect around 20,000 people and could raise up to £22 billion a year, 72% of respondents indicated their support for such a tax. 73% would also support such a tax to invest in the NHS. Additionally, 57% would support charging the same tax rate on income that comes from wealth as income that comes from employment. A 1-2% tax on assets over £10 million, alongside equalising income tax rates are just two of a suite of 6 wealth proposals put forward by Tax Justice UK that could raise up to £50 billion a year. Participant interviews, using FocalData’s novel artificial intelligence interviewer - FD_Chat - also demonstrated the strength of feeling about inequality in the UK. 52 people, spanning different ages, incomes, regions, ethnicities and 2019 vote were interviewed to understand their opinions. They were asked 5 broad questions covering inequality and wealth, increasing taxes on the wealthiest, and what they think is holding politicians back from doing so. Interviewees expressed a concern around increasing wealth inequality and the negative implications it has on society and politics. There was also a sense of urgency expressed for better tax policies and regulations to address these challenges and redistribute wealth more fairly. The interview data shows a strong sentiment for systemic change, both economically and politically, to mitigate wealth inequality and its consequences. This research builds on a previous Tax Justice UK report ‘Talking Tax’ which delves into public attitudes toward public services, wealth and tax. When FD_Chat interviewees were asked about their thoughts on taxing the wealthiest in society, respondents regularly spoke of increasing taxes. A participant that didn’t vote in the previous election said ‘I believe [taxing wealth] is the only thing that can reduce the inequality that exists’. However, some narratives centring on those with wealth working hard and being deserving of their wealth did come through. Though when asked about a specific 1-2% tax on wealth, interviewees regularly stated it was a fair, or reasonable proposition. A 2019 DUP voter put forward the view that they ‘don't agree that people should be paying higher taxes on money they have worked hard to earn even if they are wealthy’. However, when asked about a 1-2% tax on assets over £10 million, they said they ‘believe the interest people would be making on those investments alone would cover the 1-2% tax and therefore they may not feel much of an impact of this’. Interviewees were also asked what they thought was holding politicians back from implementing higher taxes on the wealthiest. Themes emerged around conflicts of interest, fear of losing donors, and that politicians themselves stood to lose out which may be holding them back. When asked their perspective on reasons holding politicians back from increasing taxes on the wealthiest, a 2019 Conservative voter simply stated ‘lobbying, influence’. When prompted further, they expanded to say ‘when you have a lot [of] money you have a lot of power and influence. The mega rich can easily pay to get their interests heard above anything else, and in certain circumstances have their people in Government. Cronyism I suppose’. One participant, 57, who previously voted Labour at the 2019 election said that ‘any one looking at the papers or the news or listening to the discussions at parliament would understand that political ideologies are integral to how policies are put together re[garding] taxation. Notes to editors:
We need your help. Billions of pounds are disappearing into tax havens around the globe every year, and we need to take action.
Via loopholes and shady accounting, big corporations and the world’s super rich are squirreling away up to £380 billion a year – that should have been paid in tax – into tax havens, according to our allies at Tax Justice Network. This is a vast sum, which could be used to build hospitals and schools, reduce poverty and improve lives around the world. Instead it is becoming ‘dirty money’ – hidden in secretive places like the British Virgin Islands – boosting the bank balances of corrupt politicians, gangsters and oligarchs from across the globe.
Email your MP and demand they take action against British tax havens:
This often happens through shell companies, which are the getaway cars for crime, corruption and tax dodging. Secretive shell companies allow people to hide their identity - and their dirty money.
The good news is that we can do something about it. We are not powerless to stop this dirty money. The UK government can stop dirty money Our government has the capacity and responsibility to tackle the flow of dirty money into British tax havens. Let me explain. Many tax havens, like the British Virgin Islands, are British Overseas Territories. The UK Parliament has the ability to pass laws that apply to these places, in certain circumstances. In 2018 the Anti-Money Laundering Act required the UK government to make the British Overseas Territories be more transparent about their shell companies. The UK government said this would happen through the publication of public registers of ownership. These registers would reveal who owns the companies registered in the Overseas Territories – and therefore who owns the money stashed in the companies. They would hugely reduce the level of financial secrecy in these places. The UK, and many other countries, already have such transparency measures in place. The UK government said that the British Overseas Territories must have these registers in place by the end of 2023. The Territories all agreed to do this. However very little progress has been made. Only Gibraltar has introduced a public register of ownership. You can pressure the government to act Our government has a duty to help – and pressure – the British Overseas Territories to create these public registers of ownership. We want you to write to your MP and ask them to pursue the issue. Your MP can write to the Foreign Secretary, David Cameron, and insist he take action – and pressure the Overseas Territories to introduce these public registers. If your MP knows that you, their constituent, care about tax avoidance in the British Overseas Territories they are much more likely to take action. We have built an easy-to-use tool with which you can send an email to your MP. It includes a letter that has all of the important details for your MP to understand the situation properly. It only takes a few minutes to send.
Stop dirty money flowing into British tax havens:
Hundreds of billions of pounds disappear into secretive tax havens every year – lost tax revenue, which should be used to fund better public services and poverty reduction globally.
The British Virgin Islands is the number one corporate tax haven. It is a British Overseas Territory, for which our government has responsibility. Through inaction, our government is enabling huge amounts of tax avoidance via the British Virgin Islands and other Overseas Territories. As citizens of the UK we have a special ability to demand an end to these tax havens. We can hold our government accountable. Please consider sending a letter to your MP, to alert them to this situation – asking them to pressure the Foreign Secretary to take action.
Pressure is mounting on billionaires around the world to pay more tax.
Last week government ministers in four of the biggest countries in the world proposed a 2% minimum tax on the ballooning wealth of billionaires. The ministers of Germany, Brazil, Spain and South Africa said by doing this $250 billion could be raised every year to fight growing poverty and inequality. They are calling on other countries to join their campaign. Growing wealth gap Their intervention shows there's a growing international appetite for wealth taxes on the super rich. It’s easy to see why. During Covid, the world’s ten richest men saw their fortunes double. The world’s 3,000 billionaires now hold combined wealth of £11 trillion, while hundreds of millions of people live in extreme poverty. The gap is widening too. In the last twenty years the income gap between the top 10% and the bottom 50% has nearly doubled. The rich want to pay more tax Wealth taxes are popular among a growing number of super rich individuals – they recognise how unsustainable the situation is socially, economically and ecologically. Patriotic Millionaires represents many of these rich individuals. They advocate for wealth taxes. Abigail Disney, a member of the group and heiress to the Walt Disney fortune, wrote in The Guardian last week that: “It is only right that the funds to mitigate further damage [to the planet] and develop green energy systems come from those most able to pay – and who, by the way, are the ones disproportionately driving it with their jet-setting, gas-guzzling lifestyles.” Patriotic Millionaires took to the streets of Washington DC last week and projected their wealth tax message onto public buildings. We’ve won before Concerted global action against the ballooning wealth of billionaires may feel difficult – but the tax justice movement won a similar battle not long ago. Three years ago 136 countries agreed a minimum global corporation tax rate of 15%. Although not perfect – less well-off countries got a poor deal, and the 15% rate is far too low – this agreement does show that joined up action to tackle abuse is possible. It’s helping to stop big corporations jumping from jurisdiction to jurisdiction to avoid tax. The same can be done with billionaires. If enough countries pass similar wealth tax legislation, the world’s billionaires will have nowhere to shelter their wealth.
Unfair loopholes and exemptions allow the super rich to hugely reduce their inheritance tax bills. In some cases, allowing vast fortunes to be passed on untouched.
The super rich pay less inheritance tax by passing on assets through family trusts or by using various exemptions built into inheritance tax. For example, there’s no inheritance tax paid on shares listed on the AIM alternative stock market. These loopholes are not available to the average family liable for inheritance tax, whose wealth generally sits in a family home. Our research shows that it’s overwhelmingly the richest families who benefit from inheritance tax exemptions. A quarter of the headline rate Those with estates of £10 million pay just 10 per cent inheritance tax. This is just one quarter of the headline rate. A particularly stark example was that in 2016 no inheritance tax was paid on the bulk of the Duke of Westminster’s £8bn estate. Examples like this create resentment among people without great fortunes – when faced with getting in order the estates of deceased loved ones. Why should the super rich get away with not paying their fair share by using loopholes and exemptions? Pressure growing for reform This week the IFS, a major economics think tank, came out in favour of scrapping many of these unfair inheritance tax loopholes. We strongly support their call. The IFS has urged the government to abolish three major loopholes exploited by the super rich. “Inheritance tax is littered with special reliefs and exemptions which make the tax unfair,” they said. Their proposals would raise £3 billion a year – and would create a fairer inheritance tax system, where we all pay our fair share. “What should be the most progressive tax around, turns out to be regressive, at least among those estates that pay it”, Paul Johnson, the head of the IFS, argued. Feeling lucky Our friends at the Fairness Foundation published fascinating new research this week, which gives a really interesting new perspective on inheritances. It posed the question to the public: are our lives determined more by the hard work we put in, or by luck? It isn’t an abstract question. It informs how we think about our lives, the economy and tax: do we live in a meritocratic society, or are our lives determined by who our parents are – and what they leave us in inheritance? The research found most people believe success and wealth are a result of merit rather than luck. This belief in hard work and merit is fascinating because it is increasingly contradicted by many of the facts on the ground. Is the UK meritocratic? Research shows inherited wealth is becoming a much more important factor in determining prosperity than work or merit. And other research shows every billionaire in the world under thirty has inherited their wealth. We shouldn’t kid ourselves that the UK is a meritocratic society. Inherited wealth is becoming a much more powerful influence on determining peoples’ lives than work or merit. This is hugely unfair. To foster a truly meritocratic society, we need to rebalance the playing field. This is why we campaign for wealth taxes on the super rich and an end to tax loopholes. It’s also why we support a reformed inheritance tax – one that removes the loopholes used by the super rich.
Hundreds of billions of pounds of tax are lost globally every year to tax avoidance.
This is money that should be going into building hospitals and schools, into paying for doctors, and teachers; reducing poverty and improving ordinary lives around the world. Instead, this money is disappearing into the offshore accounts of the super rich. It’s hard to know the scale of money hidden offshore. We need more transparency to tackle the problem. That's why we’ve been working with the UK Anti-Corruption Coalition. Our new report highlights a shocking lack of progress from British Crown Dependencies and Overseas Territories towards greater transparency. A very British problem Many of these places, like the British Virgin Islands, the Cayman Islands, Bermuda and Jersey, act as secrecy jurisdictions and tax havens. They function as tax havens because financial flows into their jurisdictions are shrouded in secrecy, benefiting corrupt politicians, gangsters and oligarchs from across the globe. That’s where we come in. We’re demanding these places publish open registers of who owns the companies in their jurisdictions – and therefore who owns the money stashed in the companies. Registers of ownership would shine a light on the financial affairs of the super rich who operate in these sometimes tiny jurisdictions. It’s a major step toward tackling global tax avoidance. It’s the law In the case of Overseas Territories these registers are not optional, they’re required under UK law (the UK itself introduced such a register back in 2016). Let me explain. Following pressure from ourselves, anti-corruption campaigners and progressive politicians the Anti-Money Laundering Act was passed in 2018. It required the UK government to ‘order’ British Overseas Territories to introduce public registers of ownership. In 2020, the UK government said that it was preparing such orders – and set a deadline of the end of 2023 for these registers to be introduced. However, little progress has been made. So far only Gibraltar – one out of the 13 Crown Dependencies and Overseas Territories reviewed – has introduced a publicly accessible register of company ownership as agreed. This Times piece, which quotes our work, sets out the problem in more detail. This TED talk on the subject is also very helpful. Our head of advocacy and policy, Rachael, explains the situation in these excellent shareable videos as well. We must hold them to account Let’s be clear. International tax avoidance in places like the British Virgin Islands is being enabled by the British government’s failure to act. Our government’s reticence to enforce its own laws is costing countries and citizens around the world billions of pounds in lost tax revenues every year. Dame Margaret Hodge MP puts it bluntly in her excellent piece in The Times on Monday: “Britain has become the jurisdiction of choice for dirty money”. That should concern and anger us all.
Untold billions in dirty wealth are still hidden in secretive offshore havens, our new research with the UK Anti-Corruption Coalition shows.
Almost all of Britain’s Crown Dependencies and Overseas Territories (CDOTs) are still very far from delivering on a years-old promise to clamp down on financial secrecy, according to the report. Just 8% of CDOTs analysed – one territory – has made their register public. Public registers of this kind make it much easier for key democratic stakeholders like the public, civil society, and journalists to see who owns shell companies, and to “follow the money”. In short, this means the vast combined offshore wealth of gangsters, tax dodgers, corrupt politicians, warlords and oligarchs from across the globe can still be hidden from scrutiny in shell companies in at least 12 jurisdictions. The report found that Gibraltar is the only one out of 13 jurisdictions reviewed that’s created a publicly accessible register of company ownership as agreed. While most CDOTs have now pledged to make at least some progress during 2024, there is as yet no stated timeframe from Bermuda or the British Virgin Islands (BVI). Recent polling by the UK Anti-Corruption Coalition and Survation found 72% of the British public think Britain should take more responsibility to work with CDOTs to tackle money laundering and tax evasion. “Tax abuse is a scourge that robs governments of vital revenues, citizens of decent public services and small businesses of investment," Rachael Henry, Head of Advocacy and Policy at Tax Justice UK said. "British Crown Dependencies and Overseas Territories are world leading enablers of tax dodging, sitting at the heart of a web of financial secrecy which allows for criminality," Henry added. “Despite previous commitments to transparency, there hasn’t been enough progress. The UK government needs to acknowledge its presiding role in international tax abuse and work with territories like the British Virgin Islands and Bermuda to put an end to mechanisms that facilitate this behaviour.” > Read the report in full here.
£5 billion a year could be raised by investing in HMRC – giving it more power to clamp down on tax avoidance – and properly clamping down on non-doms.
This was the big announcement from shadow chancellor Rachel Reeves this week. And it’s a step in the right direction. For context, £5 billion a year is enough to employ 150,000 nurses. It’s a huge amount of money. The party also created a new panel of experts to advise on cracking down on tax avoidance. The move shows Labour are becoming more ambitious when it comes to tackling tax abuse – and we welcome their ambition. Our head of advocacy and policy, Rachael, was on TalkTV making the case that they should go even further. Rachael was also quoted in the Mail and the Mirror. The pressure is mounting on Labour. Reeves was pushed on both BBC Breakfast and the Today programme as to why Labour aren’t going further, pursuing higher taxes on the very rich to support more investment in public services. It’s almost inconceivable that these sorts of questions would be put to a politician on the BBC even a few years ago. This isn’t a coincidence. All of our media work is helping to shift the debate towards raising taxes on the very rich. We are being listened to I have said over and again in this newsletter that HMRC needs more resources to tackle tax dodging. At the moment HMRC don’t have the resources to deter sophisticated tax dodgers (or answer the phone). In this vacuum, the scale of abuse is huge. Currently at least £36 billion a year owed in tax is left unpaid. This is called the ‘tax gap’. It shows just how badly HMRC is failing and unable to enforce its own rules. HMRC is chronically underfunded. A Parliamentary committee slammed the government last year for not investing enough in the tax authority. Parliament also found that for every £1 invested in HMRC compliance, £14 was recovered in additional tax. Investing in HMRC pays for itself in multiples. It’s well evidenced – as our friends at TaxWatch have shown. We’ve been making this case to politicians. And now Labour seems to be listening to our argument. We will keep lobbying them, pushing them to implement their HMRC plans if they are elected. It is vital they go further in reforming our unfair tax system, for example by taxing the ultra-rich more, as I argued in the Guardian this week.
Forbes has released its annual ‘Billionaire List’. It shows that there are more billionaires than ever before, and they have increased their wealth to record levels.
The Forbes wealth editor stated that ‘It’s been an amazing year for the world’s richest people’. This comes at a time of massive global instability, staggering inequality and an urgent need to combat climate and environmental breakdown. According to Forbes, there are 55 billionaires in the UK. Showcasing the massive intergenerational transfer of wealth, every single billionaire under the age of 30 - of which there are 15 - inherited their riches. Just one billion is a staggering amount of money. In fact, if a teacher on the average salary saved every single penny they earned, it would take over 30,000 years to become a billionaire. Raising revenue The level of wealth on display also highlights how much revenue would be raised by introducing wealth taxes. Our work on just six taxes on wealth shows that up to £50 billion a year could be raised and go straight into public services. That’s money to pay for nurses, doctors and dentists and resuscitate Britain’s ailing health service. As Tax Justice UK Executive Director, Robert Palmer, said on Twitter, world leaders need to ensure the super-rich pay their fair share. You can share his response here. Making the right case You may be surprised to see, but taxes on wealth do have popularity across the political spectrum. In a recently published collection of essays for the centre-right think tank, Bright Blue, Conservative MP John Penrose makes just this case. While we may not agree on all points, Penrose argues that rebalancing our tax system from work to wealth would be better. He argues that Britain taxes income in a ‘thoroughly regressive way by systematically giving a better deal to the rich at the expense of the poor’. Taxing wealth at the same rate of work would be a popular proposition. The Fairness Foundation recently commissioned public opinion polling that showed two in three people (65%) support reforming capital gains tax so that income from wealth is taxed either at the same rate or at a higher rate than income from work. Bright Blue also published a report in 2022 proposing that wealth should be taxed at higher levels, offset by a reduction in taxes on work. The think tank argued that wealth should be taxed at higher levels to respond to rising accumulation of wealth, and the role of inheritances in determining life outcomes.
Governments use taxes to discourage certain activities and behaviours – while encouraging others.
Cigarettes are a good example. The government tries to discourage people from smoking with high taxes on tobacco. They raise significant revenues in the process (£10.4 billion was raised from tobacco duty in 2024). Similarly, road tax on more polluting cars is generally higher – in order to encourage people to buy less polluting vehicles. Tax is a way to incentivise people to make healthier choices, or live less polluting lives, while raising useful revenues in the process. These revenues can be used to tackle the effects of the activity being taxed. Money from tobacco duty can be used by the NHS to treat lung disease, for example; or money from road tax can be used to tackle pollution caused by combustion engines. Jetting away with it It doesn’t always work this way, however. Especially when big business is involved. The UK aviation industry makes significant carbon dioxide emissions every year, contributing to climate change. You might think, by the logic set out above, the government would use tax to discourage flying; or at least make a revenue from it, in order to mitigate the polluting effects. And yet, broadly, the opposite is true. UK airlines benefit from extremely generous tax breaks from the UK government. They pay no tax at all on aviation fuel, for example. For too long the government has under-taxed the aviation industry. But I have some good news. Increase tax on private jets and premium tickets Taxes on wealthier flyers were increased by the chancellor in the recent Budget. Air Passenger Duty (APD) is a tax paid by airlines for every passenger who flies from the UK. It raises £3 billion a year. APD is a progressive tax. Passengers taking longer flights, traveling in business or first class, or by private jet pay more. The good news is the chancellor announced that he will increase air passenger duty from this year for passengers in premium economy, business and first class. We fully support APD and think the chancellor should go further – and raise the rates on business, first class and private jets much more. It’s the direction we must go in to avert climate catastrophe. Those with the broadest shoulders To make real headway in decarbonising and making the green transition, the government will have to raise and spend significantly more. This cost must fall firmly on those with the broadest shoulders. It must be a just transition. Airline Passenger Duty is a great example of this: it takes the lion’s share of its revenue from richer people – and discourages polluting activity. We could also introduce a frequent flyer levy. This would be a tax that increases the more flights you take each year. So those who fly more would pay more. Our friends at the New Economics Foundation set out how a frequent flyer levy could work. The rich pollute the most Research from Oxfam shows that richer people on average produce far more emissions than the less well off. The top 1% cause the same amount of planet-heating emissions as the bottom two-thirds of humanity, according to Oxfam’s research. We were proud last year to team up with Oxfam when they came out in favour of taxing the richest – and biggest polluters – more. |
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