I have a suggestion about Margaret Hodge MP

The Government must be much more radical. It should refuse to give contracts funded by the taxpayer’s pound to any company that has been involved in aggressive tax avoidance. Why not publish the names of companies and individuals who have deliberately avoided paying fair taxes?

Now there\’s an idea.

Margaret Hodge MP has shares in the family company, Stemcor. The majority of this stake is held in trust for her children and grandchildren. This is clearly an avoidance (an entirely legal, I should point out, but avoidance nonetheless) of inheritance tax when that dread day comes that Mrs. Hodge pops her clogs. Whether it is actually tax avoidance is a matter of personal definition of course. I would say that it isn\’t tax avoidance as it is the simple use of the law to reduce a tax bill. But apparently Mrs. Hodge has a different view on what is and is not tax avoidance than I do.

The avoidance is significant: the stake is, I believe, £18 million or so. 40% of that is £7.2 million.

Clearly therefore the salary paid to Margaret Hodge MP must be withdrawn: we cannot have a government contract with someone avoiding tax, can we?

15 comments on “I have a suggestion about Margaret Hodge MP

  1. Ah. But Hodge doesn’t say ANY avoidance. She says “aggressive tax avoidance”. Which is an entirely undefined term and therefore means whatever she wants it to mean – which you can guarantee will not include putting shares in trust for her descendents. It’s the Humpty Dumpty definition of tax avoidance.

  2. IANAL but I have recently been working on letting a Govt contract that was subject to EU law and I suspect that the procurement lawyers will have a lot to say about that proposal, especially the ones working for bidding companies.

  3. Shouldn’t we anyway try to restrain from playing to the tune of the left on this issue.

    Tax avoidance is legal. That’s it.

    Tim, hence, when you say: “Whether it is actually tax avoidance is a matter of personal definition of course. I would say that it isn’t tax avoidance as it is the simple use of the law to reduce a tax bill.”

    May I suggest as follows: “It is straightforward tax avoidance, ie the legitimate use of the law to reduce one’s tax bill.”

    I sense we need to fight back with all of this. If we start to accept their terminology, we are increasingly letting them set the agenda on their terms.

  4. What about encouraging a voluntary donation of the dodged tax a la Starbucks?

    Say … occupy her office.

  5. Thats all right for her then. None of the companies she has had a go at seem to by any definition have been practicing agressive tax avoidance. In fact, judging by accounts, have been fully tax compliant – just not paying corporation tax where not required to!

  6. Actually, addressing the original point, may I argue that it’s a stupid lousy idea all by itself!

    “Fair taxes” (like “fair share”) is a nonsense concept. Who defines fair? Me, my neighbour, Uncle Tom..??

    When people can be fined or jailed for non compliance with the tax legislation, we need objectivity (ie laws), not notions such as morality or fair share – that is sheer stupidity on a grand scale.

    If we don’t like the law, we change it. And as many others have already said, simplification of the tax system is the easiest way to achieve that and – by increasing transparency, through simplicity – reduce the potential for, let’s call it, “unwanted” tax avoidance.

  7. One of the more peculiar ideas gaining a foothold is that avoiding tax is by itself wrong.

    Do these people like Hodge and others not appreciate the law of unintended consequences? They vote on the legislation, can they not see that making certain kinds of investments tax efficient in order to encourage economic activity causes earnings to be attracted to it? It always will.

    Our motives for doing something legal shouldn’t make a shit of difference.

  8. Surely Hodge abides by the HMRC definition of (aggressive) avoidance as any action that tries to artificially get around what Parliament has clearly intended.

    Parliament clearly intends that you pay 40% inheritance tax on anything over £325,000.

  9. @ Shinsei

    “Parliament clearly intends that you pay 40% inheritance tax on anything over £325,000.”

    Well yes. But only in the sense that ‘you’ means ‘us’ and not, y’know, ‘them’.

  10. Shinsei67, Parliament clearly doesn’t intend that, because Parliament has enacted so many exemptions to that rule.

    Agricultural and Business Property Relief alone reduce the tax take by 15%, which is a fairly large exemption from “anything over £325,000”.

    And the seven year gift rule is very clear in the legislation, and has been for decades.

    Just like the warehouse exemption and royalty deductions, in fact.

  11. I recently glanced at the curtain-twitcher’s magazine of choice, Private Eye, and the Stasi there were of the opinion that nothing is wrong with Stemcore’s tax position…unlike Starbucks. Glad to see that the Eye is still crappy and loathsome and wrong most of the time.

  12. @PW #3: “I sense we need to fight back with all of this. If we start to accept their terminology, we are increasingly letting them set the agenda on their terms.”

    Dayum right!

    Let’s not let the BBC define this issue.

  13. @Garrth #7″ “Our motives for doing something legal shouldn’t make a shit of difference.”

    What?

    How else could we control their behaviour?

  14. @Frabces Coppola #1

    ‘Ah. But Hodge doesn’t say ANY avoidance. She says “aggressive tax avoidance”. Which is an entirely undefined term and therefore means whatever she wants it to mean.’

    What she wants it to mean is “Aggressive tax avoidance is that which is effected by anyone other than myself”

  15. Pingback: Margaret Hodge’s hypocrisy. | The Jefferson Tree

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