Reform has come up with one of the most stupid tax proposals I have ever heard of. As The Guardian summarises it: Reform UK are to offer wealthy foreigners and returning British expats a bespoke tax regime in exchange for a one-off payment of £250,000, with all funds collected then redistributed to Britain’s lowest-paid workers, the party claims.
The proposal, dubbed the ‘Britannia Card’, promises a 10-year residence permit and a return to the controversial “remittance basis” of taxation, allowing cardholders to shield overseas income from UK tax and avoid inheritance tax entirely.
In return, high-net-worth applicants would pay an upfront “entry contribution” of £250,000, which Reform UK said would be distributed in full to the bottom 10% of UK earners.
A tax haven deal
Farage is, in reality, planning to offer a tax haven deal to people who want to come to the UK, and a plan to boost migration into the UK.
In exchange for £250,000, paid upfront, those arriving in the UK will get a tax deal not available to those already here. A tax deal that favours migrants. Those coming to the UK will be able to hide as much of the income as they like outside the UK, and entirely avoid UK inheritance tax.
In other words, Farage is planning a scheme where migrants to the UK will be deliberately allowed to avoid contributing to UK society in the way everyone already here has to do. He is planning to create a country biased towards migrants.
Farage will, in fact, be offering inward migrants a tax avoider’s dream. You might even call it a tax evader’s dream. We would never know the difference, because the people in question will not have to declare the income that they have received that is kept outside this country.
Only one reason to pay
And Farage claims that this will raise money for the UK. Except that this is absurd because no one will pay the £250,000 entrance fee unless they are going to save taxes as a consequence.
How much tax will they save? We can reasonably presume that they will expect to save at least £250,000 over a period of 10 years. Otherwise, the deal would make no sense.
In fact, because of the impact of interest costs and uncertainty, they will actually have to save much more than that in tax to compensate for the fact that they would be paying a significant tax bill early to get entry into this scheme. The result would be that very few people would use this arrangement unless they were going to save significantly more than £250,000 in tax.
No money for the poor
In other words, contrary to Farage’s claim, there will be no money to redistribute to the poorest in the UK as a consequence of this arrangement. His proposed deal to favour migrants will, in fact, dramatically cut the tax cost of some very wealthy people, so there will be less money to redistribute to those in need, rather than more.
For Farage to pretend otherwise is for him to assume that we are all stupid. We are not. We can spot a dodgy deal when we see one. We can see someone who is peddling a con trick from a mile off.
And, what is more, we can spot someone who has dressed up something that only benefits the rich as something that supposedly benefits the poor when it doesn’t.
Farage’s real agenda
And we will presume that the person making such an absurdly false claim does not give a damn about the poorest people in the UK. This scheme reveals that he is only interested in helping the wealthy. No one else matters to him.
If he was really serious about helping people on low income in this country, he would be talking about how he is going to reform public services so that they get what they need. His planned cuts can never deliver that. He would be talking about how he is going to tax the wealthy more to provide the funds to help those in need. He would also be talking about boosting public services, not cutting them.
But instead, he’s offering massive tax opportunities for those who wish to abuse the UK, with no gain for anybody already here. And what is more, he is planning to boost inward migration into this country. Hardly what most Reform voters believe.
You could not make the absurdity up. He is planning to boost migration in the UK, and he is planning to do so at a cost to the country, and most especially those on lower incomes who are his supporters. They really should see him for exactly what he is.
