I wonder if Margaret Hodge will consider this a smear?

Margaret Hodge, who has taken on companies such as Starbucks, Google and Amazon over tax avoidance, said that she had to take on her own relatives after an attempt six years ago to take Stemcor, the steel-trading company founded by her father and run by her brother, offshore. She said: “It would be perfectly legitimate. It’s a global trading company so you could locate it anywhere. But we are not in the business of minimising our tax. So we stayed onshore.”

Ms Hodge, a shareholder in the company, said she had been upset by claims in Westminster that it had avoided corporation tax, adding that they were false. “If anybody is trying to smear me to stop me doing the work I intend to do around tax, I won’t have it,” she said.

If we could just raise the subject of that little trust for your children and grandchildren where your circa £18 million of Stemcor shares are placed.

One of the effects of this structure is that said beneficiaries will not suffer the depredations of inheritance tax at that, hopefully long delayed, moment of your death.

This is, of course, entirely and wholly legal. But that isn\’t the current question is it? That is whether this is moral?

Said structure will, from my quite possibly incorrect and very basic calculation, deprive the Revenue of some £7 million.

I personally would not describe this as tax avoidance. It is quite clearly tax compliance, obeying the law of the land in each and every particular. But it does leave us with an interesting point.

It would appear that when a corporation obeys the law of the land in each and every particular that this is immoral. When a Labour MP does so it is moral.

Which is an interesting little philosophical point, isn\’t it?

6 comments on “I wonder if Margaret Hodge will consider this a smear?

  1. There is a difference Tim. EUropean Law allows Corporates to have their head office, where they pay their Capital Gains Tax, in any EU company they wish if they are trading in any part of the EU.

    There is no law, EUropean or British which specifically allows Hodge to do what she is doing, just a loophole.

  2. “I personally would not describe this as tax avoidance. It is quite clearly tax compliance, obeying the law of the land in each and every particular.”

    Sounds like Murphy! For the record, let’s be clear – “tax avoidance” is completely legal (“tax evasion” is illegal), however one also then wants to play with supplementary words like tax “compliance”, “planning”, “mitigation”, “nasty, unfair or immoral avoidance”, (who defines immoral or unfair: me, the labrador or Hodge).

    In Hodge’s case, as with many of her political persuasion – probably either the usual hypocrisy or she genuinely can’t see the obvious similarities?

  3. This one of these irregular verbs, I prudently plan my Estate, he is engaged in dubious accounting practices, they have been charged with fraud and tax evasion.

    Or in this case, anything the Left does is fine and above board because, you know, they mean well. But nasty capitalist multinationals are born in sin and error and deserve Hell fire.

    The interesting test will not be what Hodge thinks, it is a foregone conclusion that she will be indignant about it – if she wasn’t an insufferable self-righteous harridan she wouldn’t be in the Labour Party – but what Ritchie thinks about it. Is he prepared to bite the hand that feeds? I don’t know, not being a regular reader of what he might like to call his thoughts, but I am willing to bet he won’t if someone offers me the right odds.

  4. @Ampers
    “There is no law, EUropean or British which specifically allows Hodge to do what she is doing, just a loophole.”

    Hi. Why does a law have to “allow” something, that’s not the way we operate? Laws specify when tax must be paid, not when we are permitted not to pay it? Unless I misunderstand you?

  5. What I pick up from the story is the influence she has on the company. She stopped them going offshore with only her tiny share. So that she says her tiny share doesn’t mean anything and she is not being hypocritical is a lie.

  6. I’ve dropped this little factoid into conversations recently. It’s been a fairly consistent reaction, I mention Hodge, they say, yes, she’s doing a good job, bastard corporations etc. etc.

    Then I mention the trust. Mostly all I get is a weary shake of the head indicating that, these days, you can’t trust anyone, least of all an MP…

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