Savour, for a moment, this line.
In responding I will ignore his pomposity
No, wait, just roll that around and savour it.
Now, watch Ritchie entirely destroy the UKUncut position on both Phillip Green and Vodafone.
Then let’s move on to his argument that Philip Green, or anyone else, may use a tax haven structure to avoid tax despite the origin of their profits being within the United Kingdom. Toby Young says that this argument is remarkably similar to one Nick Shaxson uses in his book. I’ve no doubt it is. We work closely together. The logic of the argument is quite straightforward. First of all, we believe in source taxation i.e. that profits should be taxed where they arise. I am not, incidentally, making any argument with regard to Philip Green in the observations that follow – none of which relate to his companies. Our argument is a quite straightforward one, and that is that a UK-based trading operation has a duty to pay tax, in accordance with the spirit of UK law, because if it takes advantage of UK limited liability then in the act of incorporation it assumes an obligation to be accountable, both transparently through the publication of accounts, and financially through the payment of tax, to the authority that gave it the right to use limited liability with regard to its debt i.e. the right to avoid payment of those debts to people to whom they are owed in the event that it becomes insolvent through no fault of its own. The authority that granted that right was, of course, parliament, through the passing of the Companies Acts. The authority demands tax is exactly the same, and it used the same legislative to create that tax demand as was used to create the right of limited liability: it is the UK parliament. The rights and obligations counterbalance each other.
Arcadia is a limited liability corporation both resident and domiciled in the UK and doing business in the UK. It pays corporation tax upon the profits it makes in doing so in the UK. No one at all has suggested at any time that Arcadia does not pay the correct amount of corporation tax, either by the letter or the spirit of the law. Richard is thus stating that Arcadia is entirely tax compliant.
As is Phillip Green: he pays UK tax on his income. As is Lady Green tax compliant: her income arises in Monaco, because that is where she is resident. Richard, UKUncut, the TJN, none of them have ever even hinted at the idea that already taxed corporate profits, when paid out as dividends, should be taxed in the UK when they are paid to non-residents of the UK. That is, rightly, a matter for the tax jurisdictions of residence.
Just as dividends paid out by foreign companies to residents of the UK are subject to UK taxation.
And as to Vodafone? The numbers under dispute were profits made from shops in Germany, used to sell phones and air time in Germany to Germans. Under Ritchie\’s rules these profits should be taxed in Germany, not anywhere else.
So Vodafone, in arguing that such profits should not be taxed in the UK, was and is totally tax compliant.
And we have this from the pen of one of the country\’s leading tax experts to boot.
Good, glad that\’s settled then.