27/01/2019
The Sunday Times, who have for many years compiled the Sunday Times Rich List, have, today, published The Sunday Times Tax List 2019.
The list captures which individuals or families have contributed the most to the UK Exchequer in various forms of tax. The tax figures include the following forms of UK taxation:
Corporation Tax - paid at a rate of 19% on all company profits. The amount attributed to individuals in these calculations is in proportion to their stake in the business concerned;
Dividend Tax - paid at a rate of 38.1 % for additional rate taxpayers (those earning more than £150,000 a year) on overall value of dividends received;
Capital Gains Tax - paid at 10% on sales of businesses or parts of businesses for those qualifying for Entrepreneurs’ Relief; and
Income Tax - paid at 45% on earnings above £150,000 (additional rate).
The figures were calculated from publicly available documents detailing the taxes paid by business, along with assessments made by The Sunday Times based on known salaries or dividends paid.
Only those with discernible tax liabilities in excess of £12.1m in 2017-18 via the taxes above are included.
Only 28 of the 145 billionaires recorded in last year's Sunday Times Rich List are featured in the tax list. A further 18 of the 855 millionaires in that list also made it into the top 50 tax payers. This actually means that four of those who paid the largest amounts of UK tax, didn't actually make the Sunday Times Rich List last year.
It should be noted that the tax estimates included in The Sunday Times Tax List do not include salaries if they aren't publicly known or available. In addition, no account had been made of the vast amounts of VAT or stamp duty these individuals will have paid on purchases in the UK.
Furthermore, taxes paid overseas are ignored; as they obviously don't benefit the UK exchequer.
What this information shows, is that some wealthy people do not shirk their responsibility to pay the taxes due. Obviously, there are some wealthy people who shirk this responsibility and seek to use aggressive tax avoidance measures, or tax evasion, to mitigate their tax bill.
Then there are the corporations who also use aggressive means to avoid paying the tax they should be in the UK.
Ed Sheeran made a bit over £27m in profit in 2018, while Starbucks made £162m and Amazon brought in nearly £2bn in revenue. Ed Sheeran only just missed off appearing in the 'top 50' list, paying at least £11.7m in tax (£5.3m corporation tax and tax on a £16.85m dividend, which would have been £6.4m. On the other hand, Amazon apparently paid just £4.5m in UK taxes and Starbucks just £3.3m from its main UK entity.
Amazon and Starbucks are just two firms that abuse UK tax laws to avoid taxation. There are others, just as there are many individuals who also use methods that would be better described as tax evasion than appropriate financial management.
Those individuals evading tax should be pilloried as much as the corporations; irrespective of the sums involved. Whether it's a corporation, or a famous comedian, actor or musician, or a self-employed builder or plumber, a taxi-driver, cleaner, hairdresser, or gardener, the lack of respect to other tax payers is quite obscene. The fact that anyone feels they have the right to pay less, in respect of their fair tax burden, than anyone else, shows a complete disregard for the society in which they live.
Before anyone suggests that everyone would evade tax if they could, let me make it clear that this isn't true. I have always paid my taxes without trying to avoid anything. On a couple of occasions during my financial services career, I was working as a contractor providing consultancy services to large businesses. Rather than setting up my own company to work as a contractor, I looked to use an 'umbrella' company. On both occasions, there were firms who offered to pay me 92% of the gross contract rate; after tax, NI and their fees. This was on a daily income of £450; the equivalent of over £100k per annum. On both occasions I rejected these offers and instead chose to use a reputable umbrella company that ensured I paid my share of tax and national insurance. I also reported the companies involved to HMRC.
No-one likes paying tax, including me. However, we have a responsibility to help fund essential services and also contribute towards welfare funding.
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