The tax dodgers are at it again - Tell George to fix them

The tax dodgers are at it again. Private equity bosses - some of the richest people in the country - are using a legal loophole to avoid paying their fair share in tax. [1] They’re fiddling their income in a way which means they pay far less tax than they owe. On top of that, some are secretly using another tax break to pay an even lower rate of tax than their office cleaners, or the nurses who care for them in their hour of need. The government isn’t investigating - in fact, they rubber-stamped the whole shady deal! [2] So should 38 Degrees members step in? Together, we could expose this scandal, and stop the tax dodgers in their tracks. Should we campaign together to get the loophole shut down? YES - WE SHOULD   NO - WE SHOULDN'T We’ll need to act fast. George Osborne is preparing his March Budget now. [3] He won’t want to be embarrassed by the fuss of a tax dodge going on right under his nose. Together, if we make enough noise, we could force him to close this loophole when he stands up to give his speech in five weeks' time. There are powerful people behind this sweetheart deal - but that’s never stopped us before. We’ll need proof, and that means investigating this tax loophole: who’s behind it, how it works and how to close it. It’ll need an expert - someone who knows the ins and outs of tax dodging - to draw up the evidence. The rest is up to us. Together, 38 Degrees members can expose this dodgy loophole and take our demands directly to Osborne. Are you up for the campaign? YES - WE SHOULD   NO - WE SHOULDN'T 38 Degrees members stand up for fairness, and this tax dodge is fundamentally unfair. While the rest of us are working hard to pay our fair share of tax to keep the country going, crafty investors are being allowed to play by different rules. It’s time to stop that. Thanks for being involved, Amy, Belinda, Laura and the 38 Degrees team NOTES: [1] Most top-rate taxpayers have to pay tax on their income at 45%, plus national insurance. But millionaire private equity fund managers – amongst the wealthiest and highest-paid people in the City of London – structure a large part of their income to make it appear as a capital gain on an investment. In fact, the investments that they’re managing are almost all other people’s money, not their own. But through clever structuring and a special deal with the government, they get to pay tax on much of their multi-million pound income at a maximum of 28%. Some private equity bosses also get to pay a tax rate of just 10% on their first £10 million of income because they’re using a tax break meant for entrepreneurs - ‘entrepreneurs relief’. They also dodge national insurance on this income. The campaign wouldn’t close the tax relief for genuine entrepreneurs. [2] Both Labour and Tory-led governments have signed special sweetheart tax deals with the private equity industry. These special deals say that the low tax rates on private equity bosses’ ”carried interest” income won’t be challenged by the taxman. It meant that in 2003 HMRC signed a special Memorandum of Understanding with the BVCA (replacing a previous one signed in 1983). No other industry in the UK enjoys this kind of special tax treatment: http://www.hmrc.gov.uk/manuals/ersmmanual/ersm30520.htm [3] BBC News: George Osborne announces 18 March date for 2015 Budget: http://www.bbc.co.uk/news/uk-politics-30518291

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