Isn’t this just the most horrendous scandal?

Theresa May’s husband’s investment bank employer has paid no UK corporation tax in the past eight years, it was revealed today.
Philip May, 60, works as a relationship manager for Capital Group, an American financial services company with assets of £1.1 trillion with offices in Belgravia.
Since 2009 the company has turned over £467million but made losses of £125million meaning they don’t have to pay corporation tax – a levy on profits.
Despite the huge losses it directors were paid £43million in salaries, pensions and other benefits – but it is not know what Mr May earns.

Company making losses doesn’t pay a tax upon profits. And the workers keep being paid all the same!

British Leyland wasn’t paying profit taxes – and the workers still got paid too.

And what the fuck is this idiot saying?

While tax expert Prem Sikka added: ‘It’s very odd a business can pay substantial amounts to directors while not turning a profit.’

No it’s fucking not.

We’ve an 8 year period here. How many directors? 10 say? No, dunno either.

£500 k each? For directors of a wealth management company in the City? That’s not actually large by the standards of the place an time you know.

Then there’s this idiocy:

Labour MP John Mann told the Mirror: ‘It is fundamentally un-British to avoid tax. The Prime Minister should raise this at the breakfast table immediately.’

Paying people a salary or a bonus gains twice (actually, more than that) the tax of making a profit an paying corporation tax instead.

Well, dunno

A Guernsey finance chief has claimed that the release of the Paradise Papers was ploy by left-wing media to influence the first ever tax haven blacklist.

It was most certainly a part of the campaign, that’s for sure.

What a wonderful whine this is

Setting aside the fact that HMRC has already begun to review certain tax arrangements on the Isle of Man, it’s a question that seems as ridiculous now as it was in 2013. Because if there is one big lesson from the Paradise Papers, it’s that currently legal tax avoidance by certain companies and individuals has been shown to be as antisocial, immoral and unfair as many of the arrangements that are banned.

The correct reading of this is “I believe that” antisocial, immoral and unfair and “I’m seriously pissed that everyone else doesn’t.”

Especially as this is from the Guardian’s head of investigations who has just spent a year trawling through those Paradise Papers to find nothing of any great moment.

Denise Coates and that £200 million pay packet

I’m just wondering who is going to chunter over this:

Denise Coates, the billionaire founder and boss of gambling firm Bet365, paid herself £217m last year as her company made a £525m profit from a record £47bn of bets.

The 50-year-old, who started Bet365 in a Portakabin in a Stoke car park 17 years ago, is now the best-paid boss in Britain, dwarfing previous titleholder ad man Sir Martin Sorrell on £48m.

Coates’s £199,305,000 pay this year is more than 1,300 times that of the prime minister and more than double the wage bill of Stoke City, the Premier League club owned by Bet365. On top of the £199m, Coates collected £18m in dividend payments.

That would seem to indicate that it really was pay. So, employers NI, income tax in the top band, that’ll be at least 50% tax paid then. Not even using Ritchie’s dividend trick.

Do we expect to see anything about how much she has contributed to he Exchequer then?

Cadbury’s taxes


A British subsidiary of Cadbury’s American owner paid no tax last year, despite making a £2.1bn profit.

The accounts for Vantas International, ultimately owned by the Toblerone-to-Ritz maker Mondelez, show that £442m of income — about what it would have paid in corporation tax — was not subject to tax. Mondelez declined to elaborate on why there was no levy on the income.

Meanwhile, the company’s main operating subsidiary in this country, Mondelez UK, paid corporation tax equivalent to a rate of 0.6%.

It paid £122,000 on pre-tax profits of £22m. If the subsidiary had paid the standard rate of 20%, the bill would have been £4.4m. It lawfully avoided paying the tax thanks to “compensating interest deductions” of £11.9m during the year.

On that second, “lawfully avoided” is a hell of a phrase for the fact, a plain and simple one, that interest paid is a cost of doing business. We even have laws about people taking the piss which HMRC obviously don’t think they are.

On the first, the opening comment on the piece is fun:

Bad journalism again from the Times. I just had a look at the accounts at Companies House. This company doesn’t trade. It just holds shares in Cadbury group companies, along with some inter-company balances. During the year it moved some of them around and booked profit on some of the intra-group transactions. Quite normally, transactions like that aren’t taxable, because nothing really happened – they’re just rearranging the shareholding furniture within their own group.

It had no sales and no trading in the year. Nothing to see here.

Idiocy, idiocy

The way we tax companies needs to be turned on its head. Abolish taxes based on a company’s profits and replace them with taxes levied on their turnover.

Apple makes a 45% gross margin, Facebook a 50% net margin near enough. Walmart, Target, Sears, make 2%, 1% or so and sometimes negative margins.

Yep, taxing turnover’s the right way to go.


Ed Conway is economics editor of Sky News


So, the Paradise Papers haven’t created revolution then

The street-level response to the Paradise Papers, the mighty follow-up punch to last year’s Panama Papers, has been curiously tepid. This is probably not what many activists, and the 100 media organizations involved in the leak, expected to happen.

In striking contrast to the bombshell release of the Panama Papers in mid-2016 that immediately triggered a 10,000-person-strong protest in Iceland leading to the resignation of Prime Minister Sigmundur Davíð Gunnlaugsson, the Paradise Papers have thus far made many headlines but no uprisings.

There’s a reason for this you know.

The fundamental lesson of the Panama and Paradise Papers is twofold. First, the people everywhere, regardless of whether they live in Russia or America, are being oppressed by the same minuscule social circle of wealthy elites who unduly control our governments, corporations, universities and culture.

We now know without a doubt – thanks to the incontrovertible evidence provided by the Panama and Paradise Papers – that there is a global plutocracy who employ the same handful of companies to hide their money and share more in common with each other than with the citizens of their countries. This sets the stage for a global social movement.

Second, and most importantly, these leaks indicate that our earth has bifurcated into two separate and unequal worlds: one inhabited by 200,000 ultra high-net-worth individuals and the other by the 7 billion left behind.

The reason being that’s not what they show. Rather, the vast majority of all of these people are obeying the law and paying their taxes. Sure, there’s a few actors trying it on with their pay for a TV show. A jet lease looks a little odd. And everyone else is coughing up as hey should do.

This is not the stuff of which revolutions are made.

As has The Guardian

The universities of Oxford and Cambridge, and nearly half of all Oxbridge colleges, have secretly invested tens of millions of pounds in offshore funds, including in a joint venture to develop oil exploration and deep-sea drilling, leaked documents from the Paradise Papers reveal.

The files show that both universities have committed significant funds to multibillion-dollar private equity partnerships based in the Cayman Islands, a tax haven popular with American and British hedge funds.

Tee hee

Jeremy Corbyn was accused of hypocrisy yesterday after an investigation found that two authorities controlled by his party avoided paying more than £12 million in stamp duty on the purchase of commercial properties.

On Monday Mr Corbyn hinted that the Queen should apologise if the offshore investment of £10 million of her personal wealth — as revealed in the leaked Paradise Papers — was designed to avoid tax. Yet in May Sefton council in Merseyside bought the New Strand shopping centre in Bootle via a Luxembourg-registered company for £32.5 million, saving £1.6 million in stamp duty. The council also bought insurance against the possibility that the taxman might chase it for payment.

In July Warrington council agreed to pay more than £200 million for Birchwood Park, a business centre in Cheshire, via an offshore company, saving almost £10.5 million in stamp duty. By agreeing to the purchases, the councils may also have helped the sellers to avoid capital gains tax.

I look forward to Snippa telling us that the State not paying taxes biases markets, makes them unfree.

So now we know we’re dealing with an ill informed idiot

In some ways the duchy appears to be acting like a commercial machine rather than a quaint ancestral estate. Things were simpler when the Queen came to the throne in the early 1950s. For a start, profits were modest (£100,000 in 1952, compared with £19.2m in 2017) and the rules of the game clearer.

£100k in 1952 is around £8 million today. Sure, depends upon which inflation index you want to use. But not even noting that is idiocy, no?

If you take your investments offshore, don’t be surprised if eventually you sail into some choppy waters. A growing swell of criticism threatens to swamp the Queen’s financial vessel after the Paradise Papers revelation that the Duchy of Lancaster – her private estate – had invested more than £10m in the tax havens of Bermuda and the Cayman Islands.

The MP Margaret Hodge, the former chair of the public accounts committee, said she was “pretty furious” with the Queen’s investment advisers for sullying her reputation, while John McDonnell, the shadow chancellor, has demanded that they give evidence to a public inquiry into offshore tax havens.

I have spent months investigating the duchy for a new book on the Queen’s wealth, and believe the public would expect the sovereign to act to the highest standards over her financial investments. The head of state must be beyond reproach.

Yes, OK, head of state beyond reproach. The head of state of the Caymans and Bermuda should not invest in a place she is head of state of?

We’re going to have to call this the Zucman Leap

By investigating data from HSBC and the Panama Papers we were able to study how wealthy the typical users of tax havens are. The extent to which offshore wealth is concentrated in just a few hands is staggering. About 50% of the wealth held in tax havens belongs to households with more than $50m in net wealth, a group that private bankers call “ultra-high-net-​worth individuals”. These ultra-rich represent about 0.01% of the population of advanced economies.

The implications are dramatic in a country such as Russia, where most of the wealth at the top is held outside the country. In the ​UK, Spain, Germany and France, about 30-40% of the wealth of the richest 0.01% of households is held abroad. In the US, accounting for offshore wealth also increases inequality, but the effect is more muted than in Europe, because US wealth is already very concentrated even disregarding tax havens. In all cases, it is clear that our standard statistical toolkit to measure inequality is not adapted to the realities of 21st-century capitalism. And the problem is getting worse by the hour.

As global inequality rises, the companies located in offshore financial centres refocus their activity on a smaller but wealthier clientele. Wealth concealment thus deprives governments of about €155bn a year in revenue. In Britain alone, annual revenue losses are €6bn, to which must be added almost €12.7bn dodged by multinationals.

Here is that Zucman Leap. Tot up assets held offshore. OK. Well, maybe the number’s right, maybe it isn’t, but, still. Assume a rate of return – hmm, maybe, but OK. The assume, and this is the leap, that no tax is being paid on that return.

But that’s not true, is it? We have multiple pieces of evidence that tax is being paid on much of the returns from these offshore assets.

David Cameron’s father and those offshore trusts. Sure, they didn’t pay tax, that’s why they were set up that way. But David Cameron, for one, did pay the due tax on all income from one of them. Zucman’s Leap is to assume that offshore means those domestic taxes weren’t paid – but, at least as far as we know, they were.

Similarly, the Swiss Banks. Osborne did the deal, investigations were done, the £5 billion (or whatever) in tax revenue didn’t happen. Why? Because the vast majority of the Brits with Swiss accounts were in one of three categories. Brit non-residents who didn’t owe UK tax on Swiss income. Brit non-doms who didn’t owe UK tax on Swiss income as long as it stayed in foreign. And Brits who had a Swiss account and paid tax to the UK on their Swiss income. The portion of accounts held by Brits not in one of those three groups was trivial.

Or multinationals. e-Bay stashed foreign profits offshore, just as Google and Apple do. Then they brought them back into the US and paid US corporation tax. Zucman’s Leap is to gaily assume that no such foreign profits are ever brought back to pay US tax. He’s deliberately ignoring that such tropical islands do not extinguish a US tax bill, they delay it only.

My assumption is that he’s not acting in good faith. Unkind of my I know but there we are.

That tax dodging Duke of Westminster

The international property empire of the dukes of Westminster pumped dividends worth millions of pounds into secretive companies in Bermuda and Panama, the Paradise Papers reveal.

Hugh Grosvenor became Britain’s youngest billionaire after his father’s death last year. Thanks to careful planning by his predecessors, the 26-year-old inherited the sprawling Grosvenor Group without having to pay the 40% death duties imposed on most British taxpayers.


The trusts established by successive dukes to control Grosvenor are UK resident and subject to British tax – they pay a 6% charge on the value of many of their assets every 10 years.

26 year old will live, what, 6 more decades? So we get 36% of the value of the estate then. That really is tax dodging, isn’t it?

Dear Lord this is drivel from Chakrabortty

The second myth of British politics is that austerity was the only correct response to the high-living of the New Labour boom. That was always opposed by some of us – now it is exploded with each new tax investigation. Drawing in part on data from last year’s Panama Papers and the HSBC files leaked in 2015, Zucman recently co-published a study that found wealthy Britons have stashed about £300bn – equivalent to 15% of our GDP – in offshore tax havens.

Three hundred billion quid would more than cover our entire education budget for the rest of this decade and into the 2020s. Or, if you prefer, it is the equivalent of £350m being paid into the NHS every week for the next 16 years. Instead, it is funnelled offshore and used to buy yachts and mansions and other baubles – tax efficiently, of course.

£300 billion is not the amount of tax which would be due on £300 billion now, is it?


It is the income from £300 billion which would be subject to an annual levy. Say, at 5% (a good return in this low interest rate world), some £15 billion. Of which what, 50% should be tax? So, £7.5 billion.

At which point we’ve got to ask well, what tax was paid? As far as we know, from the Panama Papers and that look at David Cameron and his father’s offshore etc, the tax due was in fact paid. Similarly, from the Swiss bank thing we found that the vast majority of accounts were either paying tax due or didn’t owe any as the holders weren’t UK resident (or perhaps were non-doms).

That is, weirdly, presently we don’t know what the “tax loss” is or was, we’re not even sure there is one and any reasonable estimation of what it could be is small.

Chakrabortty also claims that Ashcroft promised to give up non-dom status on taking vermine. That’s not how I recall it – does anyone else? – rather, that he would become resident. Which he did as far as I recall. Not understanding that distinction is one of those things that shows a paucity of knowledge about the tax system.

So, any actual tax dodging in the Paradise Papers?

Askin’ fer a friend and all that:

The world’s biggest businesses, heads of state and global figures in politics, entertainment and sport who have sheltered their wealth in secretive tax havens are being revealed this week in a major new investigation into Britain’s offshore empires.

The details come from a leak of 13.4m files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth.

Is there anything in there which shows anyone actually dodging their taxes?

I wonder how this will be spun

One of Britain’s most famous retail names has lost a legal battle to recover £1.25 billion in interest on overpaid VAT after five Supreme Court justices unanimously dismissed the claim.

Well, yes, it’s a victory for HMRC.

But here’s the underlying point. No one at all doubts that HMRC took too much in VAT. The only question was which interest rate should apply to the repayment. The specific law said one low one, common law might indicate something higher. Without getting too complex about it, the lower one applies.

OK, fine.

But I do wonder how you know who is going to regard this.

This rather worries me

I have no idea what the rules about the taxation of foreigners dealing in UK commercial property is. So, whether Stella Creasy actually has an issue here or not I’ve no idea.

But this is still quite obviously wrong:

When a seller is a UK individual or company, they are subject to UK corporation tax on their capital gains. Yet where the seller is foreign they are not.

It’s difficult to think of any time when an individual is going to be subject to corporation tax. And if she’s getting something that simple wrong then what else is in error?

One of the things I love about this current tax avoidance insistence

The competition commissioner, Margrethe Vestager, has announced an investigation into the UK government’s “controlled foreign company” rules, which were altered by George Osborne in 2013 to exempt multinationals from anti-tax avoidance measures. The European commission believes that the UK’s CFC rules give an unfair advantage to multinationals over UK companies with no foreign subsidiaries. Osborne’s rule change may be costing HMRC around £800m a year, according to its own estimate.

It’s worth pondering quite why the CFC rules were changed. Because Cadbury, and by strong implication Vodafone, showed that the UK’s CFC rules were illegal under EU law.

Which is fun, isn’t it?

And this is even better:

Country by country financial reporting, with tax paid where revenue is generated, might help clear up some of this fiscal and moral mess. We need to put an end to the excessive jiggery-pokery of transfer pricing and aggressive tax avoidance.

Country by country reporting depends for its very existence upon those transfer pricing rules. Otherwise, how can you allocate revenue or costs to a specific location?

Odd to say it works by complaining about how it works

Why is Donald Trump planning to give away $700 billion — that’s billion, with a “b” — to foreigners, no strings attached? You probably didn’t know that he’s planning to do this. In fact, he himself almost surely has no idea that he’s planning to do this. But it would be one clearly predictable consequence of the tax “reform” he and his congressional allies are trying to pass.

Krugman’s point being that many US equities are owned by foreigners thus a reduction in the taxation of foreign profits will flow, as a benefit, to foreigners.

OK, fair point.

For what it’s worth, the argument goes like this: Cutting corporate taxes would bring foreign capital into the United States, which would raise investment, which would increase productivity, and this productivity would then get reflected in higher wages. If this sounds like a convoluted and uncertain story, with many weak links in the supposed chain of events that ends up helping workers so much, that’s because it is.

It’s actually entirely standard reasoning on the point but still.

What this means is that around 35 percent of a tax cut from an administration that proudly uses the slogan “America first” — $700 billion over the next decade — wouldn’t even go to Americans. Instead, it would be a windfall to wealthy foreigners, who would probably gain a lot more from the tax cut than U.S. workers. Oh, and it makes all that talk about allies not paying their “fair share” sound kind of silly, doesn’t it?

Err, yes. But by lowering the tax foreigners pay we’ll raise the incentive for foreigners to invest in the US. That’s rather the logic of the point in the first place, isn’t it?

As Dame Margaret, Lady Hodge, points out, why don’t they do it in Liechtenstein like respectable people?

Britain is the “country of choice for every kleptocrat, crook and despot in the world”, a Labour MP has said following revelations by the Guardian and media partners of a massive money-laundering scheme run by the government of Azerbaijan.

Margaret Hodge said the UK thought itself to be a “country of integrity, respectability and trustworthiness”. However, recent money-laundering scandals featuring Azerbaijan, Russia and the offshore industry showed this self-belief to be “flawed”, she told parliament.

Hodge – a former chair of the public accounts committee and an outspoken critic of corporate tax avoidance – was speaking in an adjournment debate on Thursday. She told MPs that UK corporate structures were being used for a wide range of crimes, including tax evasion and bribery.

The Observer lies to us

The IMF’s analysis does something to redress the balance, making two important points. First, it says that tax systems should have become more progressive in recent years in order to help offset growing inequality, but have actually become less so.

Second, it finds no evidence for the argument that attempts to make the rich pay more tax would lead to lower growth. There is nothing especially surprising about either of the IMF’s conclusions: in fact, the real surprise is that it has taken so long for the penny to drop.

That isn’t what the IMF said at all. Rather, that those with less than averagely progressive tax systems could probably have more progressive tax systems without great damage. Also, that those with low end top tax rates could probably have higher.

The UK is currently neat exactly average on both counts. Thus it is not true that the IMF has said that Britain could or should have higher tax rates or more progressivity.

They’re lying.

This is also casuistry:

With a nod to the work of the French economist Thomas Piketty, the fiscal monitor also says that countries should consider wealth taxes for the rich, to be levied on land and property.

Land and property taxes are not the same thing as wealth taxes. Don’t, ever, pretend that they are.