Duncan Bannatyne and views on non-doms
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Is The Telegraph contradicting itself?
The headline article on page B1 of today’s UK edition of The Telegraph, relating to Duncan Bannatyne and the non-dom issue is here.
The real detail is not (see foot note) on The Telegraph’s web site though! I wonder why that is?
So here you are, this is Duncan’s column from page B12Â . . .
THE recent revelations about
Lord Ashcroft’s non-dom
status only serve to
strengthen my belief that it is high
time we understood fully the effect
of non-doms on the UK economy
and on business owners and
entrepreneurs.
Although non-doms are not
required to pay tax on earnings
made outside the UK, that’s not
the end of it. They can also reduce
the tax on their UK earnings, and
here’s how it can happen.
A non-dom simply needs to say
that his or her UK company is
managed by a board of directors
outside the UK and then make a
charge to the company for
“management services”. This
reduces the pre-tax profit of the
company and so reduces its
corporation lax bill.
The money transferred offshore
for “management services” is tax
free and can be used to fund the
non-dom lifestyle abroad - the
yachts, planes and mansions.
The non-dom situation is very
relevant to business owners like
me in the UK because we iind
ourselves at a distinct disadvantage
when competing with businesses
owned by non-doms. Normal UK
business owners pay taxes on all
earnings before paying for a new
car or a family holiday, unlike nondoms,
so there is less money
available to pump back into the
future of their businesses.
This is not. the fault of the nondoms;
rather, it is the laws that
allow them lo play the system that
need addressing.
Non-doms have to provide for
their families and they often give
generously to charities abroad. I
understand their motivations
completely. But the situation is not
fair and the laws need to be
changed; if they aren’t, the vast
majority of UK businesses will feel
unfairly penalised and more of our
country’s assets will be conn-oiled
by non-doms.
A case in point is the recent
announcement by my non-dom
friend and colleague James Caan.
He is venturing into the health
club industry and has acquired five
existing clubs.
As I pay UK tax on all of the
earnings that fund my lifestyle,
and corporation lax on all of the
profits made by my businesses, I
am clearly at an unfair
disadvantage. It’s just as well
James and I get on so well, and
there couldn’t be a nicer man to be
in competition with, but you see
my point. And what about all the
other health club operators up and
down the country without nondom
status?
The Lord Ashcroft story
highlights the inadequacy of the
domicile rule when applied to
taxation, and points to the urgent
need for reform.
In my view, all UK residents
should have a duly to pay UK tax
unless they can prove that they arc
paying equivalent taxes elsewhere
in the world. This would level the
business playing Held and
encourage, rather than stifle, the
growth of enterprise and small
business in this country.
A change would also create
badly-needed revenue to the
exchequer and help to ensure that
our economy emerges as strongly
as possible from the downturn, by
rewarding innovation and
productivity, rather than giving the
ability to exploit tax loopholes.
Duncan Bannatvne is the founder and
chairman of Bannatyne Fitness and
author of bestsellinq books Anyone Can
Do It and Wake Up and Change Your Life.
His new book, How to Be Smart with Your
Time, is out on April 15.
I agree with Duncan Bannatyne!
Foot note
What I found rather odd today was that the B1 article was easy to find, and this B12 article was “hidden away”! Thanks for finding it @pillsburyb
You should follow me on twitter here
Posted on 18 Mar 2010 by Proactive Paul
Tags: Duncan Bannatyne, misrepresentation, non-dom, press, Telegraph, The Telegraph
