Those Guardian Results

Well, quite:

Grant Thornton senior tax partner Mike Warburton said: "Guardian Media Group has enjoyed a tax holiday courtesy of some very helpful rules introduced by their friend Gordon Brown. They are taking full advantage of the relief legally available to them, which all businesses should do. That\’s fine, but don\’t knock people who do exactly the same."

Our favourite retired tax accountat (who, I believe, is funded by the Ford Foundation) has more:

The low charge is on the exceptional part sale of the Auto Trader group. No complicated planning was needed to produce a low tax charge: the government allows for tax to be deferred in this case if funds are reinvested. The Guardian did reinvest the funds. That’s not artificial, offshore, or complex. Indeed, it is tax compliant: the company is doing what the government wants, and for which it provides a relief.

Both statements are, as far as I can tell, entirely true. It\’s just that, when calculating the tax gap in the report "The Missing Billions", our favourite retired tax accountant did not make similar adjustments. Companies using reliefs provided by the government (and thus, one would assume, doing, as above, what the government wants) were castigated for paying a lower than headline rate of tax.

Seems there\’s something of a difference between goose and gander around here, no?

9 thoughts on “Those Guardian Results”

  1. Tim

    Absolute nonsense, and you know it

    I stated the effective tax rate of the Guardian on ongoing business to be 21%. That is low, but in this case (unlike most, and I know, because I’ve read all the accounts involved) that rate can at least be explained.

    For the record, I do not approve of the Guardian’s use of an offshore structure to avoid stamp duty.

    And whereas the Guardian is being tax compliant Tescos, with whom no doubt comparison is being made, is using complex, secretive and highly abusive offshore structures to avoid corporation tax on income.

    Finally, I think Brown was daft to offer the relief the Guardian has used. But there is world of difference in claiming legitimate releifs, as the Guardian has done, and avoiding the requirements of law. Warburton knows that. You know that. But you choose to deny it.

    So I have one request. Shall we stick to the facts? Then I have one question. Why do you choose to misinterpret?

    Richard

    Tim adds: I don’t choose to misinterpret Richard. I’m commenting specifically upon your earlier report, The Missing Billions. When you came up with your calculation of how much corporation tax was being “avoided” you specifically rejected the sort of adjustments that you’ve just made to the Guardian accounts.

    I’ve made this point before and you’ve not addressed it. Yes, there is a difference between headline rates and effective rates paid. You have gone on to state that this is a result of companies flouting the will of Parliament. However, when we get to an organisation that you write for, work with, your claim rather changes to it being them just using the legitimate allowances which Parliament has deliberately enacted so that companies do precisely as Parliament wills.

    You cannot have it both ways. Either rewrite The Missing Billions so as to include those legitimate uses of the allowances which Parliament specifically provides or don’t claim that it’s OK for The Guardian, and only The Guardian, to use them.

  2. “Finally, I think Brown was daft to offer the relief the Guardian has used. But there is world of difference in claiming legitimate releifs, as the Guardian has done, and avoiding the requirements of law. ”

    So you think that Tesco has avoided the requirements of law? I hope the Tesco libel lawyers are taking notes.

  3. Richard Murphy must have retired before 2002 when the ‘Substantial Shareholdings Relief’ (SSR) kicked in (e.g. for sale of Autotrader).

    He says:
    “the government allows for tax to be deferred in this case if funds are reinvested.”

    Wrong, wrong, wrong.

    Provided the conditions are met (and they clearly were – it’s actually a very sensible relief which most other European countries have had for ages) then it is a permanent and absolute exemption, there’s no requirement to reinvest. The Guardian can pay it all out as dividends if it so wishes.

  4. Mark

    OK – one up to you: it’s true, I don’t often deal in SSR and didn’t bother to check. So I prove I am human, after all

    But this does not change one iota of what I said about the liability. And I entirely dispute that it’s a sensible relief

    Richard

    PS As for Tescos libel lawyers, I have no concern. It is abundantly clear that Tescos has been tax avoiding. Is telling the truth libelous?

  5. I always think it funny when the unblinking and bonkers GM (Monbiot) criticises those who take tainted money from Big Oil when his hugely inflated salary comes mainly from the profits of Auto Trader.

  6. “it’s actually a very sensible relief which most other European countries have had for ages”

    Darn tooting. I’ve been involved with a company that couldn’t restructure and dispose of its stake in a joint venture because of the daft position prior to this relief.

  7. Not an attorney but something tells me there is a difference between the following statements:

    “avoiding the requirements of law”

    and

    “tax avoiding”

    The latter is quite different and quite legal. The former, a bit more of a claim that one is breaking the law by not living up to the “requirements”. A requirement is a requirement as they say.

  8. BlacquesJacquesShellacques

    “complex, secretive and highly abusive offshore structures to avoid corporation tax on income.”

    What’s wrong with complex? Murphy uses in to suggest some evil motive or stratagem, which is nonsense. Is the UK tax code not equally or more complex? Is the UK government then also motivated by evil?

    Secretive? likewise, what’s wrong with that? Why should any person or business blether their financial information to the world?

    With highly abusive we come to the kernel. What are the facts and reasoning that makes them abusive?

    When I tried to read the missing billions pamphlet I had a lot of trouble with Murphy’s statement that “Tax avoidance is the grey area between tax compliance and tax evasion”. This is a completely different definition than has been used for years by accountants and lawyers. What was always called tax avoidance Murphy calls “Tax Planning”. Why the new definitions?

    I have tried, truly tried, to understand what Murphy thinks is abusive about the Tesco deal and cannot get there. Maybe he can comment or point to some explanatory material.

    As far as I can tell he explains the basis for it at page 8 of the pamphlet. He hates “the conclusion that tax avoidance, since it is legal, is acceptable.”

    Murphy is offended that Tesco, and others, do what Parliament permits, and is offended that Parliament has not (yet) prohibited the practises in question. Oh wait, except for the the Royal Corps of Grauniaders.

    I do give him credit for objecting to the foreign-ness of the Guardian transaction. Filthy wogs.

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