Tax return done? Nah, I've offshored myself

Never mind trying to minimise your tax liability - it's surprisingly easy just to take yourself completely offshore and pay no tax at all, says Willard Foxton.

As I'm self-employed, I realised with some horror the other day that my tax return was due soon. In journalism, every year at this time of year, there's a frantic scrabble between friends seeking advice from one another - should you go on schedule D? Should you VAT register? Where did I put that carrier bag of moth-eaten and crumpled receipts? Can I claim back that strip bar we were "undercover" in?

In previous years, I've often come in for mockery from my mates, because I don't even claim VAT back. I don't have a service company, like 90 per cent of freelancers and many politicians. I just declare my full income, and then pay tax on it. Why? Well... I think that's the moral thing to do. Unpopular view, I realise. Maybe it makes me an idiot. However, I don't feel like a company, or an entrepreneur taking a risk, in need of tax breaks. I'm not going to get on my high horse about it - it's my decision. That said, at global champagne and lobster fest Davos, David Cameron said sensible tax planning is OK - which of course poses the question, where do you draw the line?

I've always though, if I was going to do the tax-dodging thing, I wouldn't do it in a mealy-mouthed, Ken-Livingstone-style, by setting up a company and filtering all my expenses through it. I'd go the full-bore Amazon/Starbucks/Google route of just trying to avoid tax completely. Given the choice between writing a column, and filing my tax return, I decided to see if I could easily offshore myself, using just the internet, with no specialist advice.

I expected it to be quite hard. That I'd need sixteen highly paid unscrupulous lawyers and a copy of Tolley's tax guide in front of me. Actually, it wasn't hard, at all.

First off, I had to choose my tax haven. Now, all the classics - Cayman Islands, Channel Islands, Luxembourg, Monaco, all seemed a bit passé, full of the kind of permatanned Eurotrash in white chinos who might try to bum cigarettes from me while I was relaxing on my yacht. I decided on the Marshall Islands, a Pacific archipelago which my grandfather visited with the British Pacific Fleet in 1945, which he described in his diaries as a "festering hole, stinking of excrement... heat unbearable".

I then googled the phrase "Marshall Islands Tax Haven", and on the first page of results, came across the Hong Kong-based company that the Marshall Islands have outsourced their company registration to. They have a 24-hour company registration hotline, which I of course called. I explained to the nice lady I spoke to that I wanted to set up a company in the Islands, with the aim of minimizing my tax exposure and making it hard for anyone to find out about my finances.

She explained to me I could have that within 24 hours. In addition to a zero tax jurisdiction, I was also getting a complete waiver on my corporate liability, no corporate filing obligations, total secrecy for my shareholders, and a complete waiver on any need to file accounting returns or prepare accounts for audit. For a small extra fee, they also offered to set me up a bank account in my choice of Hong Kong, Singapore or Shanghai (with debit cards, so I could spend in the UK, of course).

The total cost of the full package was about £900 - about one-thirteenth of what I'm due to fork over to HMRC by 31 January. Of course, as an added benefit, I'd never have to pay tax ever again. As their website states "in this modern age with the high quality of services available, offshore is now a relatively simple and affordable procedure for almost anyone. Once having moved all or part of your business offshore, the savings made by the low-tax or tax-free status opens up a whole new world of investment and business opportunities".

Unfortunately, when I mentioned to the lady that I'd like to write up the experience for a newspaper, she hung up the phone on me, so I guess I'll have to submit that tax return after all.

But in case you think "well, this is all very well, but I doubt it would really work", the company I spoke to really does hold the rights to administer corporate registrations for the Marshall Islands, and if HMRC wanted to find out about my tax affairs, it would have to investigate my affairs, find my Hong Kong bank account (numbered of course, not named), then issue proceedings in both China and the Marshall Islands. It's probable the game isn't worth the candle for HMRC if you're a lowly TV producer, rather than say, someone as rich as Mitt Romney. If the Marshall Islands don't take your fancy, there are plenty of firms offering to offshore you to Panama, Belize, the Caymans or Cyprus, who are using Google Adwords to show up to those googling "Marshall Islands Tax Haven".

I spoke with a tax expert about whether the structure I'd been offered would be legal. He said, in no uncertain terms "what you're suggesting would be a crime. Admittedly, a crime that's relatively easy to commit and relatively hard to investigate." He did also concede that with a little tweaking, it could be made kosher, but that it would be unlikely to be worthwhile legally for people with incomes under £150,000 a year. Still, that salary wouldn't exactly put me in the ranks of the super-rich; I probably wouldn't be troubling Abramovich to buy Chelsea. Maybe something like Folkestone Invicta FC . . .

Still, what the experiment showed me was that in the online age, international tax dodging doesn't have to be (and probably isn't) the preserve of multi-national mega corporations. In the connected, globalised world of the internet, it's very easy to find a tax haven, and the companies and consultancies who offer to move you (or your business) to one are easily available. It's probably something governments should be looking into stopping before it becomes more common.

Willard Foxton is a freelance journalist, who tweets @WillardFoxton

The Marshall Islands - solution to all your not-wanting-to-pay-any-tax problems. Photograph: Getty Images

Willard Foxton is a card-carrying Tory, and in his spare time a freelance television producer, who makes current affairs films for the BBC and Channel 4. Find him on Twitter as @WillardFoxton.

Getty
Show Hide image

I somehow feel very different this year, waving my teenager off to Pride

I thought times had changed, and was glad – then Orlando hit me like a smack in the face.

When I guest-edited Radio 4’s Today programme a couple of years ago, one of my chosen topics was young people and the internet, and specifically the way in which it can be such a positive force for gay teens who are coming to understand themselves and to find friends and allies. This item was entirely inspired by my own teenager, who came out at the age of 15, and had already found an online community of help, support and friendship.

Back when I was a teenager, I didn’t know anyone who was gay. Well, of course I did, but didn’t know it. My friend had a boyfriend with whom things never quite worked out, and when he came out years later it all made sense. We didn’t talk about it or wonder about it at the time. We sang “Glad to Be Gay” and thought we were cool and we knew nothing.

My kids, on the other hand, know everything, and they’ve taught me so much, mostly in terms of theory and terminology. I’d still thought I was cool but it turned out that in fact I was 53 and out of date, and they dragged me cheerfully into the second decade of the 21st century, blinking, dusting myself down.

The whole experience was a happy one, on both sides. A teenager who came out into a welcoming family. A brief, teary hug, because I hadn’t instinctively known (“God, Mum, your gaydar is crap”), and laughter at the clues I’d missed (“All that watching Eurovision together, Mum – did you still not guess?”). It wasn’t that I didn’t think any of my kids might be gay: just that I was still being a mum and not realising they’d stopped being kids.

Back in 2007 I wrote a song called “A-Z”, about gay teens being bullied at school, a kind of retelling of Bronski Beat’s “Smalltown Boy”, which I’d always adored. But then my own teen wasn’t bullied at school, and was happily out there, and everyone was cool, and I thought, “This is fantastic. What a time to be alive.” A crowd of them – gay, straight, bi – went off to Pride, wrapped in flags and with rainbows painted on their faces, and we took photos and celebrated, and again I thought, “What a time to be alive. Hurrah for Now.”

But then Orlando. Oh God, Orlando, which hit me smack in the face, left me shattered and weeping, feeling stupid for not remembering that there were still people out there who might want to harm my beautiful, clever, funny, science-loving, Ru Paul-loving child. Had we been living in a dream? Were we wrong to do so? We’d just been enjoying the good news, that’s all. The increasing freedom and equal rights. The taking of simple things for granted, like being able to marry and have kids. Just ordinariness – nothing anyone should have to feel grateful for.

How we can both know and not know things. How our longing for change lulls us into believing change has come. Of course I knew there was still a way to go. But there’s knowing and not knowing. There’s knowing something cerebrally, and knowing it viscerally. Love makes you strong and it makes you vulnerable. The people you love are the gap in your armour where the blade gets in, and Orlando was quite some blade.

“Four dead in Ohio,” sang Neil Young, in a plaintive lament for the students killed at Kent State University back in 1970. And the tune keeps coming into my head, with different words. Fifty dead in Orlando. Those text messages sent from the bathroom at the Pulse nightclub, what was it one of them said? “Mommy . . . Trapp in bathroom . . . I’m gonna die.” Mommy. That’s where the blade got in. And I wave my child – 18 now, an adult, but always my child – off to Pride for the third time, but in a different mood this year. Alert. Steely.

I’m reading Maggie Nelson’s The Argonauts, a book about same-sex marriage, non-binary gender identity, family, motherhood and, above all, love, and I come across this line: “Sometimes one has to know something many times over. Sometimes one forgets, and then remembers. And then forgets, and then remembers. And then forgets again.” I promise not to forget again.

Tracey Thorn is a musician and writer, best known as one half of Everything but the Girl. She writes the fortnightly “Off the Record” column for the New Statesman. Her latest book is Naked at the Albert Hall.

This article first appeared in the 30 June 2016 issue of the New Statesman, The Brexit lies