Ritchie on HICL

So he\’s gone to the Beeb with another story about how evil Teh Banksters are and their tax dodging ways.

The BBC has reported that HSBC set up a Guernsey-based company to reduce tax on profits from funding National Health Service hospitals provided under the notoriously opaque private finance initiative.

What can one say? This happened on the watch of HSBC’s former chairman Stephen Green, a Church of England minister and also trade minister in the British coalition government.

Now of course HSBC’s defence is that the private equity operations in the Uk that are owned by the Channel Islands’ subsidiary of HSBC will be taxed in the UK and so all will be fine. But that’s 10% iof the story.

Indeed, perhaps the other 90% of the story could be that HICL is not in fact an HSBC subsidiary, it\’s an independent company with it\’s own London listing? The major shareholders appearing to be pension and insurance funds?

As, actually, the Beeb itself reported:

HSBC said it did not set up the scheme to divert funds from the NHS but to give people a chance to invest in PFI projects.

It said it owned no shares in HICL and did not take a profit from it.

We\’ll put that one down as a fail shall we?

2 comments on “Ritchie on HICL

  1. One of the things I’ve noticed a lot of the tax campaigners like Ritchie saying is that companies operate within the letter of the law, as opposed to the spirit of it.

    The letter of the law states that you can’t exceed 70mph on the motorway. The spirit of the law is that you don’t drive at a speed that endangers you or others.

    If you were pulled over for doing 80mph on an empty motorway at 3am, you would hope the policeman would apply the spirit of the law (I believe they still have some discretion over this). However, you would have little recourse if that didn’t happen.

    Companies pay their tax in strict accordance to the letter of the law. I’m no lawyer, but it does seem a little ridiculous to me that Ritchie is advocating company tax accountants to overpay tax to an undefined scale of their own choosing and calling that “the spirit of the law” – especially when it could reasonably be argued that the spirit of the tax law is exactly the same as the letter of it.

    Furthermore, it looks like Ritchie is bringing his profession into disrepute by implying that tax law is not as valid as “making it up as you go along according to your whims, as long as they fit into the perceived morality of pro-tax campaigners”.

    Companies owe the tax they are required to pay by law. The whole standpoint that Ritchie seems to be basing his career on ignores this most basic of premises – which makes me wonder about the fitness to be in charge of the people running the companies that pay him consultancy fees.

  2. Interesting; the BBC contacted my university for an expert to investigate this. I volunteered, but didn’t hear from them. It seems they decided to go for Murphy instead.

    Someone at the BBC trying to get the ‘expert’ advice to give the answers they wanted?

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