GOOD BANKS - BAD TAX ADVICE

HAPPY DAYS ARE HERE AGAIN

The bad news for hapless, bewildered clients and for the World is that major global banks, including Barclay's Bank, have been tax-planning on grand scales for their customers and shifting vast amounts of money from country to country, generating what we call tax-evasion-capital-flight (“which is of course all perfectly legal”) such as has ruined Greece.  

When, in the good old days, we tax-planned legitimately and kept clients safe with tax-compliance work, our most incompetent competitors were the banks’ so called tax-departments. Their countless errors in those days usually meant their clients overpaid taxes – and we had the job of untangling knots tied by untrained amateurs; to the satisfaction of the tax officers and of the law.

Tax, Accounts and Returns are a slow business, often lagging 2 years behind the transactions. Even when eventually “agreed” by tax officers, Mistake & Error visits can reopen tax assessments back for 10, 20 or 30 years – which are called Back-Duty-Cases. Clients who may like to fondly imagine that matters are closed - because their banks “handled it” and agreed risibly small assessments in high-tax area such as the USA or UK or EU – will be in for major shocks when the Back-Duty-Cases start.

Sadly – for clients – they will find it is themselves who signed the Balance Sheets, The Corporation Tax Returns, The Payroll Tax Annual Returns, The Sales Tax and VAT returns – not their advisers, tax-planners or auditors. It is their own hands that have Declared Honest Complete Compliance with the Laws of the day – at best signed in error; at worst signed as False Accounting and Fraudulent Conspiracy. Basically, in normal human terms, the tax-payers have been Keeping Two Sets of Books. That fictional. honest, tax paying, London juryman, The Ordinary Man on The Clapham Omnibus - might simply think that they should all be clapped in irons.

The good news for the World and for those misled, ill-advised, wronged clients (any legal person or organisation) of banks’ tax-planning is that banks still have lots of money. When national treasuries demand repatriation and clients sue to recover the crippling tax bills reaching back thirty years – the banks have enough to pay the compensation and put matters right. The other good news is that in contributing to paying up the back-taxes and thus repatriating the tax-evasion-capital-flight funds – the banks will be paying off most of the national and international deficits that are currently triggering budget-austerity and global recession.  The tax-planning banks in turn will see if they can sue their tax-lawyers and counsel and recover their losses via their advisers’ professional indemnity insurance policies. There is $21 trillion to get back for the major economies – for the OECD High Streets that originally generated the cash – so there is enough for everybody – enough to pay off ALL debt and to feed ALL the hungry.

Good times are coming. It is an ill wind that blows nobody …etc.

TAX AND ECONOMY - ARCHIVE - JAN13