Home » Posts tagged 'Foreign Remittances from the UK'
Tag Archives: Foreign Remittances from the UK
Is Apology Due From Those Who Invest in Foreign Tax Havens?
Since revelations have surfaced that billions of pounds sterling have left the UK for foreign tax havens there have been calls for people using foreign tax avoidance schemes to be ‘guilted’ into making a public apology.
Labour leader Jeremy Corbin suggests that anyone using an offshore tax haven should apologize to the country.
One British person who has millions invested in the Cayman Islands is the acting Queen of the United Kingdom. We don’t know if Jeremy Corbin wants Elizabeth Regina to apologize to the British public for investing overseas, and we assume he knows the Queen isn’t required to pay tax under British law, but does so voluntarily.
On a more serious note, the Labour leader is quite right to be appalled at those who, having been raised and who earned a good living in one of the best countries in the world, would then take their money out of the country that made them rich to invest it offshore!
Why would they do it? Because they can make higher returns on their investment (at higher risk) and it’s a way for companies to lower their overall tax burden, and individuals can hide money from family members.
Simple Solutions Work Best
Like taxing any British sterling that leaves the country at 20 percent. That way, HM tax office collects significant revenue and the government can better fund schools, hospitals and roads, etcetera.
Even so, some will choose to invest overseas because they can earn 50% returns or better in so-called ‘Frontier economies’ and even having paid such a (proposed) tax they’ll still earn 30% or better.
For each individual or business the first 100,000 pounds sterling taken out of the country shouldn’t be taxed, but everything after £100,000 individuals and companies should be required by law to pay the 20% tax.
By using this high-ish threshold, Mom, Dad and the kids can go holiday-making in foreign countries and not have to pay the foreign withdrawal tax, perhaps in their entire lifetime.
NOTE: For the first £100,000 worth of withdrawals it could go in Dad’s name, then Mom could use her lifetime 100,000 pounds foreign withdrawal limit. Therefore, a family unit would have a combined lifetime limit of £200,000. Once they hit that threshold, thereafter they would pay 20% tax on each pound that they send or spend outside the country.
On a Separate Note; 19 Billion of Them, Actually
Britain loses about £19 billion annually on so-called ‘Foreign Remittances’ on account of foreign-born workers sending their money home to their families. Who could blame them?
Yet it’s a serious problem, but as previous governments haven’t figured out a way to stop it, it’s never been addressed.
SIX PERCENT of Thailand’s GDP comes from foreign remittances, for just one example, and many other countries count foreign remittances as an important part of their GDP.
Although foreign remittances are only rough estimates, at least $24,878,000,000 in remittances were sent from the United Kingdom to other countries in 2015 alone. The actual amount could be much higher. Image courtesy of Pew Research.
Therefore, expats should be able to send the first 100,000 pounds home without paying the 20% tax — but after that they’re draining the country of money(!) so they must begin to pay the tax when they hit the £100,000 mark.
The trick is to be fair with foreign workers who work hard to earn their money, but to stop the UK being unduly taken advantage-of which has been happening for decades.
The government relies on voluntary notifications of such foreign remittance sending, so the number is pegged at £3.2 billion pounds sterling on the GOV.UK website.
Money exchange units such as Western Union, PayPal, World Remit, and banks and trust companies know the real numbers, but interestingly, not one of them have ever been called to testify to the House of Commons about the gross total amounts transferred out of the UK annually. Not once…
It’s Either Treason Or it Isn’t. It Can’t be Both
With a 100,000 pound threshold, my tax idea isn’t aimed at *normal citizens* nor is it aimed at *normal expats* sending a few thousand pounds home to their families — it’s aimed at the fat cats, at the criminal syndicates, and at wealthy people who earned or inherited their fortunes in the UK who should be deeply ashamed they’re not re-investing in the country that made them rich.
To me, such people should have a fair trial on Friday and if they’re found guilty, let them be found guilty of treason (for that’s what it is, IMHO) and be shot dead on Monday — but that law isn’t likely to be passed in the UK House of Commons anytime soon.
It’s Been Going On for Decades; What to Do Now?
Perhaps we could say; ‘What’s gone on before now we can leave aside, as there weren’t sufficient laws nor guidance for individuals or companies, and frankly, in past decades the taxation rates were grievous to be borne by both individuals and companies’ — but at this late date we’re going to create new laws (that don’t need to be complicated!) to counter the astonishing, continuous, and increasing run on the country’s wealth.
Everything is Nothing – Unless You Can Accurately Quantify and Qualify It
Therefore, the UK government should call banking experts and wire transfer companies to testify (under oath) before the House of Commons as to the general extent of the foreign remittance problem and to quantify and qualify the offshore tax shelter monies that leave Britain annually for foreign tax havens.
How to Plug a Leak
The goal should be to compel banks and wire transfer companies to become ‘part of the solution instead of part of the problem’ as the government needs the information — the banks and transfer companies have it; the government doesn’t! — and nobody else on the planet could begin to figure it all out.
Getting a handle on this decades-long travesty (drum roll, please) could provide a double-boost to the UK economy by;
- preventing multi-billions of British sterling from leaving the country by making it uneconomical,
- and by capturing billions in tax revenue on money still determined to leave the country,
- and allowing the government to earn enough revenue to lower the corporate tax rate to 14.5% (to match Canada and other competitive nations’ corporate tax rate)
- which would drive investment to the UK in the billions, and perhaps a trillion pounds over 10 years.
See what plugging a leak can do for the United Kingdom?
Foreign tax havens. Image courtesy of Cayman Financial Review. Click the image to visit Cayman Financial Review for general information on foreign tax havens.
Why it’s Time to Lower Immigration from non-Commonwealth Nations
Well, ‘Brexit is Brexit’ as they say, and it looks like it’s going to take a while to finalize details between the UK and the EU. But no need to panic. Brexit will happen and the two sides will be legally divorced within 12-months.
It might turn out to be a good agreement, it might turn out to be a bad agreement, or negotiations might go so awry that the UK leaves without any agreement; In which case WTO rules would automatically apply until superceded by bilateral agreement.
Which wouldn’t be too bad actually, because with no time constraints to worry about post-Brexit, and with no concern about loss of face for politicians (on account of missing the Brexit deadline) powerful industries on both sides of the English Channel could then push their respective governments to create a number of à la carte bilateral agreements pursuant to their sector. Secondary and tertiary industries would then follow the lead of the powerful primary industries.
Eventually, every CEO would be heard by their respective government, and elected representatives on both sides would be compelled by their own political self-interest to present their case to the other side — a very pure way of streamlining trade between Europe’s (by then) newly divorced economies.
Whichever way it goes, in approximately 12-months Britain will be alone in the world save for its Commonwealth partners which it hasn’t cherished enough over the past 86-years, but it’s not to late to change that.
In fact, now is the time for the UK to take huge strides forward with its Commonwealth partners and begin to deliberately favour them over non-Commonwealth nations, especially in regards to trade and immigration.
“The latest net migration statistics show that in the year ending December 2016, net migration to the UK was 248,000.” — Migration Watch UK
The majority of immigrants to the UK since 1999 came from eastern Europe and the benefit for British employers is that these workers accept low-paying jobs and (although it is unethical and in some cases illegal; regardless, it still happens) that a farm or factory could replace all UK-born workers and on the next week hire immigrants who work for far lower wages. This can save companies significant amounts of money especially in the case where the UK-born employees have years of seniority and full benefit plans.
(Want to save 25% on your annual labour expenditure? Fire everyone below the level of General Manager and fill those positions with immigrant workers. Sure, it may be hairy for a while until the newcomers learn their jobs, but think of the money you’ll save! Even with having to pay significant severance pay to UK-born workers that have seniority, and maybe a bit of ‘hush money’ — over time the company will show better profits. If you think this hasn’t been done, you’re naive in the extreme. Whether it’s legal or not, whether it’s ethical or not, or whether it’s the ‘right thing’ for Britons to do to their own countrymen and countrywomen is a completely different matter)
In the end it hurts the UK economy, although it helps UK businesses to earn higher profit, but much of the money earned by the immigrants is sent to their families in eastern Europe or wherever they migrated from.
The name for these kinds of transactions is ‘foreign remittances’ and billions of pounds sterling leave the UK economy for foreign nations every year. That money is gone and is never returning.
The amount of wealth leaving the UK every year via foreign remittances is astonishing and may total as much as £20 billion annually (or more) and as the accounting is imprecise it’s almost always found (years later) that the estimates were extremely low.
The UK is one of the Top-Ten foreign remitting countries in the world
- Although foreign remittances are only estimates, at least $24,878,000,000 in remittances were sent from the UK to other countries in 2015. Image courtesy of Pew Research.
In some countries with heavy remittances from the UK, the amounts are so large that certain developing nations receive up to 6% of their GDP via foreign remittances, and the UK is one of the top-ten foreign remitting countries in the world.
Think how much money Britain’s governments (Labour and Conservative) have allowed to leave the UK via foreign remittances over the past quarter century…
Wouldn’t it be smarter to lower immigration from non-Commonwealth nations?
Why, yes it would. It would be much smarter.
Commonwealth nations have historic links with Britain and it looks better when former colonies (and new Commonwealth members that were never colonies of Britain) are faring well thanks to British largesse.
Following is a short list of UK benefits if immigration from non-Commonwealth nations is replaced by Commonwealth nation immigrants:
- Tens of billions of pounds sterling will no longer leave Britain annually to be used by non-Commonwealth countries
- Foreign remittances from the UK would go to Commonwealth nations instead of non-Commonwealth nations
- Commonwealth nations might choose to source more military equipment, machinery, etc. from the UK
- Commonwealth nations with boosted foreign remittances are more likely to stay within the Commonwealth
- Immigrants to the UK from Commonwealth nations are more likely to understand the British worldview
- Commonwealth immigrants are more likely to integrate well into British society
- Commonwealth nation citizens will have a better opinion of the UK and of Britons
- Commonwealth nation economies will see a corresponding economic benefit
- UK GDP would increase, as would GDP in the other Commonwealth nations
- Commonwealth nations would become politically strengthened
- Commonwealth links between businesses are likely to increase
- Links between Commonwealth citizens are certain to increase
And that’s just the short list.
Yes, billions of pounds sterling will still leave the UK but at least it will be going to Commonwealth member nations that have a similar worldview to Britons and are nations that are more likely to support British policies instead of opposing them.
If the money is going to leave anyway, the smart money would arrange to keep it ‘in the family’ with countries that don’t have adversarial relations with the UK.
Why should the UK be adding to the GDP of non-Commonwealth nations, when it could be adding to Commonwealth nations GDP?
The UK is a member of that august organization and membership itself implies that each member should favour other members.
Commonwealth governments, big business and consumers should always try to shop at Commonwealth businesses first, before trying anywhere else. If something can’t be found for sale in your own nation, then try to purchase it in another Commonwealth nation. If it can’t be found at all, then maybe it’s time for another Commonwealth member nation businesses to pool their resources and build/sell that product.
The UK should cut immigration from non-Commonwealth nations and simultaneously make it one order of magnitude easier for Commonwealth nation citizens to immigrate to Britain.
While the total immigration levels might stay the same, the definite bias should move quickly towards Commonwealth nations and NAFTA countries.
Commonwealth citizens should have UK visas fast-tracked after Brexit, MPs argue (The Telegraph)
Up to 200,000 immigration applications from Commonwealth and NAFTA nations should be accepted each year via a simple online form, a successful criminal records background check, and payment of an immigration fee of £100 per year.
One for all, and all for one!
Instead of strengthening people and nations that have no interest for or against the UK, Britain should quickly move to support Commonwealth members and NAFTA countries.
In this way, countries that are pulling for the Britain’s success will be rewarded by Britain — and vice versa.
The UK should respectfully request NAFTA associate membership the moment Britain formally leaves the EU. And within 5-years, all other Commonwealth nations should make the same request of NAFTA.
That’s how you Build a Better Britain, Build a Better Commonwealth and Build a Better NAFTA!
Letter to Britain 