Stupid fucking MPs

Turn on the automatic Ritchierant machine:

But he faced criticism from Labour’s Ian Lavery, who said: “People who pay their taxes unquestioningly are sick and tired of seeing hugely profitable companies use every trick in the book to get out of contributing their fair share.

“Hard-pressed families struggling with sky-high energy bills will be absolutely astonished that an energy company which makes hundreds of millions in profits doesn’t appear to be paying its fair share in tax.”

The MP cited figures showing npower\’s total “operating result” over the three years from 2009 to 2011 was £766m profit.

So why wasn\’t tax paid on that vast sum?

The discrepancy between the £766m profit figure used by MPs and the £40m used by npower arises because npower\’s \”operating result\” is on an earnings before interest, taxation and amortisation basis (EBITA) while the figures on which it pays tax are after amortisation, or EBIT.

And even that\’s not right as interest is deductible meaning that it pays on EBT.

Today\’s cretin in Parliament is therefore demanding to know why taxes aren\’t paid on operating profits. When taxes are not due on operating profits, but upon net profits.

Ignorant grandstanding cretin.

26 thoughts on “Stupid fucking MPs”

  1. I’m more concerned about the notion that anyone paying tax (or anything else) ‘unquestioningly’ is seen as a good thing.

    Tax is the biggest expense for most of us.. the idea that we should happily hand over whatever the state requests, without question, is beyond even Murphyism.

    Everyone should make an effort to understand, check, and manage their tax. Even if only to ensure that the ‘fair share’ is paid.

  2. Shows how effective the Murphy disinformation operation is. And how sharp is the wielded sword of truth? Whatever it’s merits, that view of the energy industry’s tax liabilities is now firmly woven into the fabric of public discourse. Score another one for retired Wandsworth accountants. Although reading trougher extrodinaire Tim Yeo’s defense adds a certain added flavour of unreality to the debate.

  3. Actually “tax farmer extraordinaire” would be a more accurate & better spelled description of that particular individual.

  4. So Much For Subtlety

    Nothing reconciles me to the braying upper class idiots who used to run Britain like the fools who have followed them.

    Oh for the government of Stanlety Baldwin – someone who actually knew what a free society was supposed to be. Better yet Lord Salisbury.

  5. A minor point of pseudo-academic interest: it was, I believe, Matthew Taylor, a Blair-era career policy wonk who about a decade ago first argued that payment of tax should be regarded as a badge of civic virtue irrespective of the practical good (as he saw it) to be achieved with said tax payments. May his name live in infamy.

  6. I am sure Mr Lavery does not pay his taxes “unquestioningly” and that he employs an accountant to make sure he pays as little tax as possible. Avoidance, in fact…

    I’m equally sure I pay for his accountant.

    And people who do pay their tax “unquestioningly” are mugs.

    If you are an ordinary employee, your tax code is probably right, if you are higher paid and receive benefits it is probably wrong and if you are a pensioner receiving private pensions it will be wrong.

  7. Equally FS is the article, which states that tax is paid on earnings before interest but after amortisation.

    Makes you wonder what Emily studied at Uni?

  8. “the figures on which it pays tax are after amortisation”

    er, no.

    Tax is paid on profits BEFORE amortisation / depreciation. You can then deduct capital allowances (and other things) that are specifically allowed in tax law, debated and passed by MPs.

    It would help if those MPs understood what they were voting on.

  9. Pay your taxes unquestioningly. Above all, don’t dare to question what they have been pissed away on.

  10. Pleased to see you’ve noticed and blogged on this idiocy. I’m trying to spread some light within the thread on 38 degrees’ facebook story, without much luck…

  11. Does anyone know of any literature around the theme of finding out the Great and the Good actually know fuck all? I did once read a biography of Cecil Rhodes; his discovery was the establishment has a completely soft underbelly and everyone, absolutely everyone, was for sale. However, corrupt isn’t quite the same as useless is it.

  12. Capital allowances, amortisation on intangibles, interest and research and development tax reliefs will all be caught by my GAAR guidance so Ian Lavery is perfectly correct to shame nPower for investing in things and employing people.

    And even if they aren’t caught by my GAAR guidance, then they are obviously immoral and are therefore avoidance and not legal, even if they are not illegal. They are blatantly alegal.

  13. What on earth is nPower claiming cap-ex relief for, though? They don’t have any capital expenditures. Presumably another member of their larger group of companies is using nPower’s profits to subsidise investment in another area, which whilst not unreasonable does rather reinforce what I was saying the other day about nPower making overly large profits.

  14. What on earth is nPower claiming cap-ex relief for, though? They don’t have any capital expenditures.

    What about the new Pembroke B Power Station? Okay it’s old, but CAPEX surely?

  15. People increasingly refer to paying one’s “fair share” of tax.

    Can anyone provide an objective definition?

  16. Surreptitious Evil

    Can anyone provide an objective definition?

    The whole point of “fair tax” is that it has an entirely subjective definition.

  17. For the sake of clarity, I must inform my fellow commenters that in modern parlance “fair” means “loadsa”.

    As in, npower should pay “fair” corporation tax and Ian Lavery should claim “fair” expenses.

    I trust everyone now understands Herr Lavery’s position.

  18. £15000 a year. Thats payable by every adult. So the rich people are paying their fair share plus the fair shares of some other people too by the look of things.

  19. “And even that’s not right as interest is deductible meaning that it pays on EBT.”

    Well even that’s not right. Tax is paid on taxable profits, which for these purposes is EBT with depreciation added back and capital allowances deducted. Since nPower claim to have spent £3 billion on new power stations in the last 5 years, and a large part of that will be plant and machinery eligible for capital allowances (writing down allowances at 20% on a declining balance basis), it is highly likely that any operating profits that are not sheltered by the £90m annual interest (perfectly reasonable for £3bn of capex) will be sheltered by gazillions of capital allowances.

Leave a Reply

Your email address will not be published. Required fields are marked *