Why is everyone complaining about Ken\’s taxes?April 6, 2012 Tim WorstallTax13 CommentsHe\’s only been doing what a noted tax expert suggested people should do after all. previousChe is CromwellnextThere\’s a solution to this you know 13 thoughts on “Why is everyone complaining about Ken\’s taxes?” Grumpy Old Man April 6, 2012 at 12:30 pm They’re not complaining about his tax arrangements, they’re complaining that he is a hypocritical shit. I couldn’t possibly comment about your noted tax advisor who seems to believe that tax avoidance by other people is different to tax avoidance by himself or his clients james c April 6, 2012 at 12:34 pm If the company is wound up, then it may be possible to claim entrepreneur’s relief. Thus cash sitting in the company would not be liable to any further tax, if it is withdrawn in this way. nautical nick April 6, 2012 at 12:50 pm What amazes me, is that when Ken was interviewed on TV (by Andrew Marr?) he said that his affairs were arranged that way so that his accountants could sort it all out. Though that may well be a sensible approach, it did not inspire any confidence that he should be entrusted with the somewhat larger problem of London’s financial affairs…. diogenes April 6, 2012 at 5:53 pm perhaps if he hadn’t suggested that people who took actions to mitigate their tax burden were “bastards” and “should not be allowed to vote”, there might be some sympathy for him. the great redacto April 7, 2012 at 9:26 am Yes, the tax avoidance is legal (subject to going through the fine detail), though some of the book keeping looks a bit inept. But getting found out as a two-faced twat while seeking public office is not terribly bright. Ken, kindly leave the stage. Surreptitious Evil April 7, 2012 at 10:10 am But getting found out as a two-faced twat It’s never hurt him or his in the past, though? tfewster April 7, 2012 at 11:28 am He’s a fuckwit or a liar however you look at it. If he’d played straight, his tax+NI liability would have been £32K ( http://www.uktaxcalculators.co.uk/ ). Instead he says he’s paid £22.7K + £12K corp tax=£34.7K? Even the Employer/Employee NI dodges don’t make this tax efficient. Surreptitious Evil April 7, 2012 at 12:56 pm Hmm, well, his partner and he are both and the only directors of the company, yes? So what they are paid should be identical to the directors’ emoluments line included in each year’s accounts? (I’ve now check his company accounts and this line isn’t included.) I’m not an accountant (and my company accounts are prepared under Scots Law) so this could be complete shite. Although the recent Companies Acts (1985, 2004, 2006) have been UK-wide. 2. For paragraph 1 of Schedule 6 there shall be substituted the following paragraph— “Aggregate amount of directors’ emoluments etc. 1.—(1) Subject to sub-paragraph (2), the following shall be shown, namely— (a)the aggregate amount of emoluments paid to or receivable by directors in respect of qualifying services; Am I missing some small company exemption or something? tfewster April 7, 2012 at 6:09 pm Oops, my previous post was based on the misleading (BBC) figure of “98K income”, whereas his company accounts show more like 250K p.a. income, with his personal income being 98K from all sources. Obviously staff & legit expenses should come out of the Company, but it seems likely that he & his wife took £63K EACH out of the company in dividends that year, so his effective income would be 2 x 63K + 25K pension + 5K PAYE = £156K. Which means his “fair/moral” share of tax+NI would be £57K instead of the £34.7K of tax revenue he contributed in total. So it IS tax-efficient, tho’ the published accounts beg investigation by HMRC – Corporation tax of 12K implies gross profit of 57K (after all disbursements, VAT etc.), leaving 45K cash in the company. So how did he manage to take 63K out (or 2 x 63K)? It’s not cash banked from previous years profits! IANAA either, especially not on Corporation tax – Perhaps Mr Evil could verify my calculations? Surreptitious Evil April 7, 2012 at 7:11 pm Oh, this is all very difficult. And this shit hurts my head … Right. He doesn’t publish a P&L statement. Nothing to be ashamed of, I don’t either. The variously £350k / £250k in the accounts is the company net worth, not the income. But, in the absence of that, what can we tell from the published accounts and his web-site? Not a lot. Between close of accounts 2010 and 2011, the company ‘lost’ about £46k. He took £63k in divi. Few details of the rest are available – although putting together with other stuff released, his company expenses are at least £100k (£76k in salary, 12k in corp tax – just on the divi!) So company income must be, de minimis, about £120k. But it doesn’t say … He could have loads more expenses – the analyses of his whittering on the Feltz show may not be accurate. Hell, his whittering may not be accurate. I can’t understand how Ms Beal could be a basic rate tax payer if she got £63k of divi income? As a director, she must submit an annual tax return (Mrs S-E got very cross at me about this – and she is a working, rather than a nominal director. She’s just not a numbers person.) But she could have waived her divi. And I may be completely arsed up about all of this – it’s why I pay an accountant despite being trivially able to churn the numbers. It’s the rules that confuse me (and the fact the buggers change them every, and I do mean every time you turn your back!) Surreptitious Evil April 7, 2012 at 7:16 pm Oh, can I also note that I seem to be getting a much, much more abbreviated copy of his accounts than, say Andrew Gilligan. ‘Cause all I’m getting is a 4 pager, of which only one is of any use. I don’t see the amounts invoiced during the period, exclusive of VAT. Gilligan talks about at all 🙁 tfewster April 7, 2012 at 7:57 pm S-E, you’re good at this! From Andrew Gilligan: (I’ve not looked at the accounts in-depth myself): “Over the three years 2008/9 to 2010/11, the accounts show that a total of £755,776 passed through the company” – so roughly 250K p.a. income, that would have meant 100K p.a. tax+NI for an employee on that salary. But Silvetas income is irrelevant, as legit costs may be high. If Silveta paid a total of £24K tax over the 3 years it’s been going, that’s about £114K gross profit over that period. Hence £90K net profit. Ms Beal may not have taken a divi, but there isn’t even enough cash there for Kens £125.5K ! Surreptitious Evil April 7, 2012 at 10:23 pm Oh, does anybody know whether hot air is liable for VAT at the standard or the reduced rate ? Of course, if Ken is gobbing off for business rather than personal or charitable use, he needs to rerate himself at the higher rate. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.