Dear God this is drivel about Net A Porter

Here. Channel 4 “investigation“.

The Murphmonster provides his usual rent a quote.

The entirety of it is simply nonsense. They’re shouting about losses being carried forward for fuck’s sake. Tax deductibility of share awards to executives (upon which they’ll obviously pay either income tax or capital gains tax, both of which are higher rates than corporation tax).

Paul Mason even comes out and tries to say that “not making a profit” is the most obvious method of avoiding corporation tax.

This is just the most lunatic drivel. Either they’re all just grossly ignorant or they’re lying to us.

11 thoughts on “Dear God this is drivel about Net A Porter”

  1. Ah c’mon Tim! Give ’em their due. When Paul Mason says that not making a profit is the best way to avoid corporation tax, well, he’s correct isn’t he.

    Well done Paul, keep up the good work comrade.

  2. Paul Mason even comes out and tries to say that “not making a profit” is the most obvious method of avoiding corporation tax.

    Hold on Tim. I’m inclined to agree. More than that, it is used to seek all kinds of rents from the State. It really is time to abolish non-profit corporate status and level the playing field. Let’s get the charities and pressure groups recognised as the business corporations that they are.

  3. Presumably the exec share schemes that generate the losses in the company will be generate a tax liability for the individuals concerned. And probably at a higher rate than the standard corporation tax rate.

  4. Paul Mason is a massive cretin. How Newsnight ever gave him a job related to economics I have no idea. His stuff can generally be demolished with ease.

  5. 20 odd years ago I rented a flat from a dentist. Or rather, I rented a flat from his practice. Over 30 years, his practice came to own every property up and down one side of the road, and it was a long road.

    He made enough money to pay himself a decent salary, and kept enough on one side, in the practice, to buy another property.

    When the dentist retired, he just owned the lot. He paid no tax on the dentist practice, where he used to fix teeth, because he was just closing up. He paid no tax on property development because it was an asset of the practice.

    Could or should you manage your financial affairs in that way today?

  6. I wouldn’t advise anyone to structure like that these days. The dental practice proper would be a trading business, which means he could sell it and pay 10% CGT (using Entrepreneur’s Relief), and there’d be no IHT on a transfer of it due to Business Property Relief.

    The property on the other hand is highly unlikely to be a trading business: you need to be actively buying and selling, not just investing, for that; and HMRC and the courts tend to assume that anything to do with property is a mere investment. That would mean that it wouldn’t qualify for ER or BPR, so you’d be looking at 28% CGT and full IHT.

    Worse: if the property business is significant compared to the dentistry (which sounds plausible, if there are that many properties), if it’s all in one entity then it would prevent the reliefs applying to the whole entity.

    Better to split out the two businesses into different entities (I’d suggest that from a legal liability perspective anyway). Dentistry gets ER and BPR; property doesn’t.

    It sounds like he benefited from Retirement Relief, which was a bit more generous than Entrepreneur’s Relief.

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