FOR IMMEDIATE RELEASE
I’m sure you are all aware of Mr Cameron’s recent tax affairs which are all over the news as it has been very hard to avoid. I wanted to give some different views on the situation and also shine some light as to where I think politicians can still make (potentially) profitable investments without creating a public outrage.
First of all we have to understand exactly what type of investment David Cameron made and why people are so upset. David Cameron’s father Ian ran an offshore fund in the Bahamas called ‘Blairmore Holdings’. Just to clarify these funds are (to my knowledge) completely legal, the situation that has caused an upset is that the UK taxman cannot touch these funds. The fund has now been moved to Ireland. The Panama Papers showed that David Cameron sold his stake for £31,500 just before becoming PM in 2010. This type of investment is called a hedge fund investment and they are pretty common. In case you were unaware, the Panama Papers are a leak of roughly 11.5 million files from the database of Mossack Fonseca, the world’s 4th biggest offshore law firm.
So did David Cameron actually do anything wrong? Legally, no. David Cameron paid tax on profits bought back into the UK, the same way that any other investor would. You could argue that the real reason the public are taking umbrage with this is that the funds are placed offshore and away from the UK, meaning the companies dodge the UK tax (depending on where the fund is based tax may still be due). Most of the profit however is distributed to investors in high tax countries which means they WILL have paid tax on the profits. Morally has David Cameron done anything wrong? Well this is where it can get confusing…
Individuals who make these types of investments take their money outside of the UK (or country of residence) and although they will pay tax on earnings, their investment cash leaves the current economy. You would have thought that being the PM, Mr Cameron would want to inject cash into his own economy. Yes his investment was made prior to becoming PM but his aim was certainly to take the seat at NO.10. He could have scored some brownie points by helping out his own country and investing into UK businesses, especially when the government has introduced schemes like SEIS and EIS that offer tax relief. In my opinion these schemes are already sadly under promoted by the government and if Cameron, and other MP’s, were to take advantage of these tax incentives they would not only be helping UK SME’s but they would also draw attention to the advantages of doing so for other investors. The government says the SEIS and EIS schemes are there to help UK businesses secure funding, and incentivise investors to invest in the UK. However, if they aren’t willing to help generate awareness of the relief available or endorse this by making use of such schemes themselves then this will surely, at least in my eyes, have a detrimental effect. If there are any politicians out there that have made use of these schemes I would love to hear from you!
Personally I believe it would be great to see more politicians practising what they preach and doing their best for their own economy. Of course, if you could make more from taking your money outside the UK the majority of people would consider it, but when you become a politician or in fact the PM, you take on the responsibility of looking after the country and setting a good example. If we encourage investments to be placed outside of the UK then we are also losing potential investments into UK businesses. In my opinion this is critical, we should be helping our own businesses and economy grow. To begin to understand the public’s outrage we should also consider the double standards of Mr Cameron. If you remember back in 2012 he slammed Jimmy Carr for his tax affairs, deeming them ‘morally wrong’, which now seems perhaps a tad hypocritical?
Mr Cameron should be promoting UK growth and investing into UK companies, helping to create a stronger and more successful financial situation rather than putting one’s personal finances first. SEIS/EIS schemes need more fuel. Imagine the excitement of seeing George Osbourne come through Businessagent.com and invest into a growing company for a stake in their business. Its shows real solidarity and that we are in this together. A helping hand from our countries seniors would never go amiss and it’s a hand that needs to reach out more!
Tel: 01920 486440
18 Aug 2016 15:15
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