Sir Jim Ratcliffe is worth an estimated £17.5 billion. He made his money as the founder, chief executive and major shareholder of Ineos, a diverse chemicals company. The Queen honoured him with a knighthood in 2018 “For services to Business and Investment”. The Sunday Times tax list reported that he paid £110million in tax to HMRC in the 2017-18 tax year. He ranks as Britain’s third highest individual taxpayer.
But isn’t he a Brexit supporter?
Yes, he’s been very vocal about his support of leaving the European Union. In 2015, he told The Sunday Times: “The Brits are perfectly capable of managing the Brits and don’t need Brussels telling them how to manage things. I just don’t believe in the concept of a United States of Europe. It’s not viable.”
And after the referendum was won by the Leave campaign, he advocated a strong stance to the British government in the subsequent negotiations: “We must listen, we must be unwaveringly polite and retain our charm. But there is no room for weakness or crumpling at 3am when the going gets tough and most points are won or lost. Never forget that we have a decent set of cards. Mercedes is not going to stop selling cars in the UK. And London is one of the two key financial centres, and that isn’t going to change.
Sir Ratcliffe has become an official tax resident of Monaco, a well known tax haven for the world’s wealthiest citizens. If you’re tax domiciled in Monaco for the official minimum 183 days a year, you don’t pay any income tax or property taxes. The UK’s highest rate of income tax is 45% on all taxable income over an annual £150,000. His estimated tax saving is £4 billion.
And living conditions in the French Riviera are hardly a sacrifice.
What do other people think of the move?
Price Waterhouse Coopers (PwC) were Ineos’s auditors. Last year, this relationship broke down and Deloitte were hired instead. This was at the time when Sir Ratcliffe, and two other bosses at Ineos were planning to change their tax residency status to Monaco. Apparently this was a considerable factor in the irreparable deterioration of this business relationship, as PwC didn’t agree with the decision.
On 24th September 2020, former chair of the Public Accounts Committee, Dame Margaret Hodge said: “It seems Jim Ratcliffe is so rich he can’t afford to pay his taxes. While his tax contributions to the public purse will be missed, I’m not sure the same can be said about him.”
The tabloids have a typically colourful response to his move to a tax haven, with plays on his name and ‘rats leaving a sinking ship’ abound. In his article for the Daily Mirror, Kevin Maguire says that he “should leave his knighthood at Heathrow”.
What do you think?
It seems that many people see his departure as a betrayal of the UK, just as we are in the last throes of leaving the EU. He supported it before, during and after the referendum – but is now leaving to reduce his own tax bill, as it is becoming a reality.
But would any of us turn down the opportunity to have smaller bills? Especially considering how much money he has already paid into the Treasury. Nothing he has done is illegal. He is certainly not the only Briton choosing to live in another country to take advantage of their tax regulations. What would you do?