Merry Christmas and a happy new year! It's taxation by stealth.

Abu Dhabi, 2010. I receive a speeding fine - not an unusual occurrence when I lived in the Middle East, I confess - but on this occasion, there is no way that my car could have been caught on a camera at 2am on an Abu Dhabi road travelling at 100km/h in an 80 zone. On the date of the supposed offence, my car was safely parked in the car park of Volkswagen's UAE head office in Dubai. This is because I was testing one of their cars for a review during that particular week.

The only way it could possibly have been my car was if someone broke into it without damaging the lock, hot-wired it, again without doing any noticeable damage, drove it from Dubai to Abu Dhabi in the middle of the night, got snapped by a speed camera, and then drove it back to the Volkswagen office car park, parked it in the exact same spot, and returned my driver's seat and mirrors to the positions favoured by my 5'1", corgi-legged self.  

Still, I paid the fine. Compared to Australian or British speeding fines, it wasn't too expensive, I was well-paid, the points system for traffic offences was way more generous than Australia or Britain, and the process for appealing vexatious speeding fines is a bureaucratic palaver for which I had neither the time or energy.

I know I am not the only person to have lived in the UAE and paid a phantom speeding fine. The governments of the seven emirates probably do pretty well out of these fines.

But before anyone outside the UAE dismisses my phantom fine as part and parcel of life in a country that is not a fully fledged democracy or writing it off as the result of corruption in a far-off land, ask yourself if you think such a thing could ever happen in your own country. Would your government find ways, either by accident or design, to get their hand in your pocket for some extra revenue, above and beyond what you legitimately pay via such things as income tax or VAT?

I fear this is happening in Britain right now. This is not the fear of a paranoid, conspiracy theorist. Let me give you an example of what happened to me over Christmas.

My parents and my sister and brother-in-law, all living in Australia, sent Christmas presents to the UK for my husband and I. The gifts were items of clothing and jewellery, not ivory furniture, weapons or hard drugs, so hardly the sort of thing that would ring alarm bells for HM Revenue and Customs. But instead of these parcels, which would have fitted through our letterbox, being delivered to our house, we got red cards from the Royal Mail informing us to collect the parcels from the nearest mail collection centre. 

On two brisk Saturday mornings, we walked across the park and on both occasions, could only collect the parcels after paying £17 in "customs duty and/or import VAT" for receiving goods from outside the European Union. This struck us as bizarre, especially as the customs forms that our loved ones filled out in Australia clearly had a tick in the "Gift" box. I am hardly likely to go into business by trying to sell on the Wonder Woman apron my sister gave me, rather than exporting it to me, for Christmas. At the same time as this farce, a friend posted us some novelties from Cyprus, a fellow EU member state for now. The parcel came through the letterbox, it didn't cost us a penny.

Somewhat miffed about being £34 poorer for the privilege of receiving Christmas presents, we looked into the matter and found out that you can try to claim back incorrectly charged customs duty. We now have to fill in a form for each parcel and provide a load of documentation. This includes (and I am looking at the form as I write this):

● Customs black and white charge label

● Customs declaration form

● invoice/receipt or other evidence of value (such as eBay page or Paypal receipt) of the goods

● for returned goods - evidence of refund on goods returned, certificate of posting, cost of repair etc

● for overseas students - confirmation from University/College of course details and permanent address outside the European Community

● for antiques - verifiable evidence of age

If the parcel contains one or more personal/private gift(s) from someone abroad, please provide written confirmation from the sender, including details of the gift(s), its/their value and the intended recipient(s).

Rather like appealing a phantom fine in the UAE, this is a palaver but we're going to go through with it and hopefully recoup the £34. It's a matter of principle.

But I do wonder how many other people who received Christmas presents from outside the EU got a similar festive surprise this year? And it's not as if people only receive gifts from outside the EU at Christmas - I am now looking forward to paying needless tax on any birthday presents from Australia in a few months time. 

According to www.gov.uk, you do need to pay 2.5% customs duty on gifts worth between £135 and £630, and there are special rates for gifts worth more than this, depending on what they are or where they came from. But for most of us, we are not expecting or receiving gifts worth more than £135. That would be a very expensive T-shirt and apron from my sister and brother-in-law.

And of the people who received a bill for customs duty on Christmas presents from outside the EU, how many simply paid up without question? How many people were aware that you don't have to pay customs duty on gifts? And of those, how many knew how to go about claiming the money back? It's not as if this was advertised at Christmas. You do need to go digging around online to find the information you need and then download the form, print it, fill it in and post it, along with the aforementioned documentation, to a sinister-sounding government department called "Border Force", located in Coventry.

For people without internet access, for people with literacy issues, for people who need to get letters from relatives abroad who might struggle to write letters in English, for people who simply didn't think to question this charge, it's not hard to see why many people wouldn't try to claim the money back. It just goes straight into the government coffers, unchallenged.

And if a hard Brexit goes ahead, it does not take a great leap of imagination to picture more and more people getting a red card from Royal Mail and bill to pay for presents from friends and family across the Channel. Can anyone seriously imagine this government going out of their way to inform people about their rights in regard to gifts from Europe?  

Consider this a warning. If you have received a bill for customs duty on a gift, click here for the link you need to download the form and obtain the information you need about the rules on this matter.

Photography by Petr Kratochvil 

"The Turks are coming! Let's be more like Norway!" The latest Brexit campaign panic...

Today, the Brexit campaign is warning us that if we vote to stay in the EU next month, we'll be overrun with Turks. It all exploded this morning on The Andrew Marr Show (BBC One) when Penny Mordaunt, a vote leave campaigner, incorrectly said that the UK would be powerless to stop Turkey joining the EU. Next up, on Peston's Politics (ITV), David Cameron correctly said that the UK has the power of veto over any Turkish bid for EU membership and that it will be "literally decades" before the prospect of Turkey joining the EU is realistic.

Turkey's ambitions for EU membership never really got out of first gear, since applying for European Community membership back in 1987. As long as Turkey continues to illegally occupy the northern third of Cyprus, they're not going to be allowed in. Cyprus too has a veto and Turkey won't even recognise Cyprus. And over the years, genuine concerns about security, human rights and economic reform have further stalled their campaign.

If we vote to leave the EU, we won't ever get the opportunity to veto Turkey's membership.

But why would this matter if we left the EU and had full control of our borders? ask the Brexiters. Because, dear Brexiters, leaving the EU does not automatically guarantee this utopian border control of which you so frequently speak.

If you are a Brexiter who constantly points to Norway as an example of why we'd be just fine out of the EU, you are especially culpable in a bad narrative.

Norway has twice voted to remain out of the EU, first in 1972 and again in 1994, with the out vote narrowly winning each time. But in order to trade with the EU (and anyone who thinks we can simply not bother trading with the EU or negotiate a mutually beneficial trade deal quickly is utterly deluded), Norway must retain all EU financial regulations, employment regulations and product standards and contribute to the EU budget, all while having no say in any of these regulations, standards or contributions. Do you really think the EU will treat the UK like a special snowflake in this regard if we vote to leave? Please. Do not be so naive.

On top of that, free movement of people, as per EU rules, is central to Norway's relationship with the EU. Yet Norway has no say in the making of these rules. This has resulted in a higher inward migration of EU citizens into Norway than the UK when measured as a percentage of total population. So, in decades to come, if we vote to leave, we'd have no say in Turkey's EU membership and, in order to keep trading with the EU so the economy doesn't completely tank, we'd have to give Turks freedom of movement into the UK if they ended up joining.

In short, if you think leaving the UK will mean less people in the country, and therefore less pressure on the NHS, schools and social services, you are wrong.

The Vienna Convention of 1969 would give EU citizens already living in the UK legal protections post-Brexit because of individual acquired rights. The convention says that the termination of a treaty "does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination".

Bang goes the Brexit arguments that leaving the EU would mean we could trade with the EU without letting in EU citizens or that we'd instantly be able to pull a drawbridge up on EU citizens coming to work here.

Additionally, plenty of businesses would struggle if they had to sponsor the visas of EU citizens, as is the case with non-EU staff. This would be crippling particularly for many businesses which rely on staff who can speak European languages. As long as the average Brit remains embarrassingly monolingual, plenty of employers will require the services of EU citizens.

On top of all this, the Norwegian example is particularly ridiculous especially when spouted by conservative Brexiters. The simplistic moronomics of the Brexit campaign, as encapsulated in the stupid campaign bus (made in Poland and Germany...) goes along the lines of "If we leave the EU, we will have £350 million per week to put into the NHS". Except the bus slogan neglects the money we get back as a result of being in the EU, such as the billions invested in the European Regional Development Fund, money made in trade and contributions by EU citizens who are resident here and are paying taxes and being economically active consumers.

If anyone seriously thinks the government,  particularly the current one, will match the funding we receive from the EU, especially for infrastructure projects and especially in the north of England, think again.

"But Norway is doing alright without all this EU funding!" comes a howl from the Brexit peanut gallery.

Again, if you are a conservative Brexiter and you think this is a good argument, you are being absurd. Norway is one of the highest taxed nations in the world. This is how it funds things. While this may appeal to left-leaning Brexiters, you cannot be taken seriously for a nanosecond if you are a low-tax conservative Brexiter using Norway as an example. VAT is at 25%. Corporation tax is 25%, the top rate of income tax is 46.9% and ordinary income is flat-taxed at 27%. Tax revenue as a percentage of GDP is consistently above 40%, as opposed to just above 30% in the UK. All tax rates for Norway are well above the OECD average - this would be a massive vote loser for the UK, regardless of who is in power. The Norwegians might well be perfectly happy with this tax burden but it is naive to think this will fly in the UK.

But the sad truth is that this whole EU referendum debate is degenerating into an unedifying Dave versus Boris spectacle along with people trying to win the argument with internet memes. If the standard of debate improves over the next month, I will be amazed.

Oil, gas and Greek salvation

Imagine this: A country is on the skids economically. The reasons for this crisis are myriad and blame is not limited to one person or one group of people. Corruption and tax evasion have been rife for years. Governments of different shades have been incompetent. Attempts to solve the economic problems have not worked.

But for the last five years at least, the country's energy ministry has known about significant offshore oil reserves - some 22 billion barrels to the west and a further 4 billion barrels in the waters to the east. Surveys have also estimated that the country may have natural gas reserves worth $9 trillion. Further exploration of the country's coastal waters could reveal even more oil and possibly natural gas reserves too. There may be enough to cover at least 50% of the country's oil needs. The country already has some oil and natural gas production but this has dropped sharply between 1990 and 2000 and has continued to fall ever since, dwindling to no gas production and barely enough oil production for one of the salads the country is so famous for.

This country is not hypothetical. This country is Greece.

Exploiting its oil and gas reserves alone won't solve the country's economic problems but it could make a massive difference.

Fuel would become cheaper - it is currently at around €1.59 per litre - and this would benefit everyone from struggling taxi drivers and farmers to the people who live on and visit the islands, where prices are higher for the many goods that need to be shipped from the mainland. There may be enough oil and gas to not only fire up power stations and further develop the petrochemicals sector. The government could remove bureaucratic obstacles to the development of renewable energy, so oil and gas-fired power stations are used in conjunction with renewables. This would mean a more reliable supply of electricity for the country. This is a minor bummer when the lights go out while you're enjoying a pint of Mythos in a Cretan taverna and it is an ongoing pain in the arse if you live in Greece.

Fossil fuels won't last forever - the clue is in the name - but we need to use them for now alongside renewables because the technology for solar, wind and tidal energy still needs work. A thriving oil and gas industry would be a fiscal multiplier and a creator of jobs.

As a bonus, Greece's heavy reliance on coal and imported hydrocarbons from such bastions of freedom as Russia, Saudi Arabia, Iraq, Libya and Kazakhstan would come to an end.

Imagine that: Greece could be one of the few countries in the EU to get off the Russian gas teat and tell the Saudi government to go pound sand.

But will this happen? Probably not, especially if the IMF and EU governments succeed in getting Greece to sell off assets such as ports and public companies, in particular the national energy companies, to reduce the debt. But who the hell is going to buy these assets at this time? Realistically, how much money could be made from such a fire sale?

Joint ventures between Greece's national energy companies and foreign investors would make more sense. Keeping the ports for the transport of oil and gas and the development of LNG terminals would also make sense. LNG - liquefied natural gas - is a growing sector of the gas industry and one of its benefits is that it eliminates the need for pipelines with other countries, thus reducing the risk of geopolitical dramas, especially with nearby Turkey.

Additionally, LNG is a great way to store gas for domestic use and transport it for export. Remember exporting? A way that a country can make money! Exporting! Part of a sensible, steady economic recovery for Greece rather than the current debacle. It'll never catch on, especially if the Greek government eliminates tax breaks for the Greek islands. Yeah, what a great idea. Let's make it harder for the Greek islands to attract tourists! We're only talking about places so damn beautiful that all the advertising they should need is a Google image search. It's not as if tourism is a revenue-raiser for Greece or anything...

There is a lot of love out there for Tsipras at the moment but if he succeeds in raising taxes for the islands while not properly reforming the whole country's taxation system, and if he doesn't do a damn thing to push for oil and gas development, he is completely short-sighted. Equally, bullying tactics from the IMF and EU governments are not conducive to getting Greece back on its feet and five years of austerity in a vacuum where there have been no real plans to grow the economy haven't solved a damn thing either.

TLDR version? It's a bloody mess and I'll be stunned if anything improves any time soon.



Photography by George Hodan

Myleene Klass, Ed Miliband and the sorry state of political debate

Well, that was a sorry sight. We witnessed Ed Miliband supposedly being "owned" by Myleene Klass on ITV's "The Agenda", a programme I hadn't heard of until my Facebook news feed erupted this morning with people on either #TeamMyleene or #TeamEd. From what I can tell, the programme is an attempt by ITV, albeit not a particularly good one, to foster political debate.

Instead, we had the unedifying spectacle of Miliband calmly trying to explain the rationale behind the so-called "mansion tax" as a means of funding the NHS, while Klass kept talking over the top of him, using the phrase "fiscal drag" so everyone thinks she knows what she is talking about, claiming to speak out on behalf of grannies in £2 million pound houses, claiming £2 million will only get you a garage in London even though a cursory glance at Rightmove will reveal that she is talking bunkum, and using the non-analogy of "You may as well just tax me on this glass of water" even though that doesn't make any sense.

But in the midst of her spiel, she made a good point - or at least she gestated the embryo of a good point. It is unclear how much money a mansion tax will bring in for the NHS. Miliband says £1.2 billion. He may be right. He may not. Klass claimed the tax might only raise £300,000 but this figure wasn't attributed to a person or a group. Leaving aside the rights and wrongs of the mansion tax, whatever sum of money it might raise, it quite simply will not be enough to sort out the funding crisis in the NHS.

Miliband said that the NHS has gone backwards under this government. That is true, although it has been going backwards under successive governments. It was then that Klass asked: "But why? But what are the other options?" and asked Miliband why the NHS is in this mess in the first place.

That is a good question. So naturally the cloth-eared dolt of a presenter decided to wind up the NHS discussion there and then. The whole discussion lasted all of two minutes. Two minutes. One-hundred-and-twenty seconds devoted to discussing one of the biggest issues facing this country, an issue that elections can be won and lost on. And it was a mere two minutes that caused social media to lose its shit today.

And Klass's embryonic good point was lost forever.

The two biggest reasons for cost pressures on the NHS are crippling PFI debts - paying back loans taken out to build or redevelop hospitals across the country will end up costing us around £300 billion with repayments expected to peak at £10.1 billion per year by 2017-18 - and the cost of the marketised NHS. The administration alone on the tender process for NHS contracts costs billions and that is before a single contract has been signed or any service has actually found its way to a patient.

But this is never really discussed properly. There may be some tinkering around the edges with Labour Party NHS policy but no major party is actually tackling these two issues head on. And any discussion about NHS finances is completely meaningless without discussing these two factors. Any party that has a clear plan to sort out the waste of our money created by both these scandals deserves to win the next election.

Similarly, this morning on Sky News, the red sofa of inexplicable guests was filled with Tony Blackburn and Michelle Dewbury, neither of whom appeared to have any real clue about the NHS. This didn't stop them discussing it anyway with Stephen Dixon, surely the most intellectually mild news presenter in the country right now. It was another ill-informed discussion full of the usual wailing about how we all need the NHS, and what can be done about it but nobody ever being particularly clear on what "it" is. And given that "it" is PFI debt, it's NHS marketisation costs, it's Clinical Commissioning Groups created by the rancid Health and Social Care Act of 2012, it is all too hard to be summed up in the Sky News breakfast news programme or on a lame attempt at serious journalism on ITV. Meanwhile, debate in the House of Commons is generally a petty schoolyard rabble.

And as a result, we are all the poorer and less informed for it.




Photography by Petr Kratochvil

Tax: it's not all bad

I am delighted to report that Costa Coffee sales are up. The high street coffee chain has released figures showing that like-for-like sales at its coffee shops were up by 7.1% and total sales increased by 25.5% in the three months to November 29.

This is no coincidence given that Costa has demonstrated that it is paying its fair share of tax while Starbucks has been less than forthcoming and says it has not been making a profit in Britain, a curious claim for a company that is expanding. Despite the Starbucks near my office appearing to be no less busy since news of their tax shenanigans broke, it would appear that overall, British consumers are happy to support businesses who, like them, pay tax in a responsible manner.

Yes, I know Starbucks is a business, not a charity, and I know they have minimised their tax liabilities legally. But just because something is legal, it doesn't mean that it is right. The government has a duty to close loopholes so that multinationals contribute properly to Britain, to play its part in ensuring its staff and their families can access important things such as healthcare, transport and education.

Instead, Starbucks has been allowed to negotiate a new tax bill with the government. Nice work if you can get it. I might give George Osborne a call and see if I can pay a little less tax next year, which brings me to the point that, yes, most of us would pay less tax if we could. But most of us are not Starbucks and most of us cannot afford the kind of accountants and taxation lawyers who are very good at helping clients stick to the letter of the law even if they violate the spirit of it. Most of us are not managing our affairs Jimmy Carr-style and accepting cash-in-hand for a babysitting job as a teenager is about as dodgy as a lot of us ever get.

But without tax revenue, we lose out on the basics such as healthcare, education, infrastructure, transport and law and order. And we miss out on things that aren't essential to survival but important culturally, such as free museums, galleries and, yes, even the BBC. We can whine all we like about the things we deem to be a waste of taxpayers' hard-earned money and argue over whether our taxes should go to the royal family, wars we disagree with, MP allowances, the welfare bill and so on and so forth. It is important to monitor where our tax quids go and to call out government when they piss it up the wall.

However, the one thing I learnt from living for five years in a tax haven is that with taxes come rights. Obviously, basic human rights should not depend on how much you pay in tax, but when you do have a financial stake in the country where you choose to live, it is easier to complain when you feel your rights have been violated and it's much easier to hold the government to account.

As an example, when I lived in the United Arab Emirates, I received a completely absurd parking ticket from a police officer at Dubai Airport. I was looking for somewhere to stop briefly in the busy drop-off zone and a police officer caught my eye and pointed to a space by the footpath, directly behind another car. I smiled, waved and thanked him as I got out to help unload my visitors' suitcases and he started to write me out a ticket and demanded my driving licence. I asked him why I was getting booked, he refused to explain, he wrote me out a ticket in Arabic.

I admit I should have learnt more Arabic while I lived in the Middle East but in a country that claims to be constantly improving its justice system, it is not too much to expect an explanation for a mysterious parking ticket. Imagine if I was a tourist and that was the warm reception I received at the airport? I asked for his name, he pointed to some Arabic writing on the ticket and told me: "You're not in London anymore!" even though my licence, which he had confiscated, clearly said I was Australian.

A Lebanese friend translated the ticket for me - I'd been booked for "blocking the road" and he'd written that his name was simply "Mohammed" which wasn't really going to narrow it down in the Dubai constabulary. I had no choice but to pay the fine if I wanted to get my licence back from a police station drawer. I could forget any ideas about making an official complaint - I know it wouldn't get any further than maybe a phonecall or a turgid form to fill out. Even though I was working as a motoring journalist on a national newspaper at the time, I wouldn't have gotten too far with any plans to write an expose on bent traffic enforcement.

That parking ticket was my tipping point. As I drove off furiously, I burst into tears and told my husband I didn't want to live there anymore. And true to my word, I left not long after that incident. It is awful to feel so powerless over a damn parking ticket and to know that my rights for any kind of recourse where next to nil.

To say the UAE is tax-free is actually a myth - the government finds plenty of ways to get their hands in your pocket but they just don't call them taxes. Spurious traffic fines, road tolls, government-owned telephone companies, government-owned utilities companies, government-owned media... But without a line on your payslip each month telling you that you've made a contribution towards the running of the country and its facilities, it's hard to complain too hard about the government or get taken seriously if you open a can of whoop-ass on the authorities. Both locals and expats have landed themselves in hot water - as in prison - for doing just that.

As such, expats cannot send their kids to state schools, health insurance is compulsory in Abu Dhabi but at the whim of your employer in other emirates (I had two jobs in Dubai - one where it barely covered cough mixture, and one where they didn't offer any health insurance at all, and a job in Abu Dhabi where coverage was excellent - it's a crapshoot...) and if you want that gaping hole in the footpath fixed outside your flat, you can try asking the municipality to do so but you're not paying council tax, so why would they hurry?

Paying taxes provides us with all manner of things essential to a healthy, functional society. We don't always agree with the way our taxes are spent and we don't always agree with the way it is collected. Few of us are delighted that Starbucks can simply promise to £20 million in tax over the next two years and it'll all be fine.

But it's not the principle of paying tax that needs to be challenged. Instead, we must challenge how the government collects tax and hold them to account to spend it wisely. And we can do that by voting with our wallets to boycott the likes of Starbucks, as well as exercising freedom of speech to criticise the government without fear of prison.

(Meanwhile, here are some further sensible suggestions for UK tax reform from @christophersaul who is an British expat based in Dubai and willing to actually contribute to the UK coffers)

Image courtesy of www.kozzi.com