The Murph gets Polly to listen once again

The crass comments of Boots’ Monaco-based CEO, that a Labour government would be a “catastrophe”, is in fact a gift, a perfect example of the kind of “predatory” capitalism Miliband has condemned in the past. A fine old Nottingham company seized by private equity, used to pay fair tax, but now it’s nominally in Switzerland, it pays a fraction of what it did. Labour should belt out this tax avoidance theme.

Sigh, the tax is being paid by the people who receive the interest rather than upon the profits in the company. It’s not actually obvious that any less tax is being paid: theoretically it could be more.

Tax is a big vote-winner. How can high-street chemists who pay their tax compete fairly with Boots who doesn’t?

Umm, because corporation tax is paid on hte residula, the profit? Which is the result of the competition? So, by the time this tax bill is issued they’ve already done the competition thing?

How can retailers compete with Amazon, or cafes compete with Starbucks?

Neither pays tax because, to a reasonable level of accuracy, neither makes a profit.

When I recently asked Michael Heseltine what he’d do about the avoiders he was unequivocal: “Go after them! How many gunboats have Amazon got?” If they won’t pay up, they have warehouses that can be seized.

It quite specifically says, in both domestic and international law, that those warehouses don’t lead to a corporation tax liability. Seriously? Seizing something against a bill that doesn’t exist?

Labour should use one of its great assets – the grand inquisitor Margaret Hodge – to head up a new Office of Tax Responsibility to oversee HMRC’s pursuit of tax.

Another Murph idea. Happily Hodge La Dodge would have to resign from Parliament if this happened.

Richard Murphy of the Tax Justice Network, says Osborne’s gestures towards getting cash back from tax havens have often had the opposite effect. Murphy estimates that cutting corporation tax 28% to 21% has meant £9.4bn less was collected than the Office for Budget Responsibility forecast in 2010. Meanwhile, some £119bn a year goes missing in tax evaded, avoided, unpaid and cheated.

And that’s just ridiculous. He’s been whining about tax that should be owed according to his calculations. The cut in he headline rate has obviously reduced the amount that is not paid by his calculations. Can’t have it both ways matey. Complain about avoidance reducing and then that tax collected is falling.

30 thoughts on “The Murph gets Polly to listen once again”

  1. hodge’s committee is complaining today about “tax avoidance on an industrial scale”. Wow. Legal activity on an industrial scale? How dreadful, promoting the idea that people should comply with the law. MOAR TAXIS! goes the rallying cry

  2. “So, by the time this tax bill is issued they’ve already done the competition thing?”

    This cannot be iterated often enough.

    Although… there’s an argument that post-profit tax avoidance advantages a business because it enables them to accumulate capital faster than one which does not, and this can be a competitive advantage (e.g. making it easier to fund acquisitions, capex, price wars etc). The tax effect should equalise over time, but the cash flow effect will not.

    Private Equity knows this well, so Boots are potentially in that game… not that the campaigners ever appreciate the impact at that level.

  3. I have it on good authority that MPs are avoiding, not just tax, but paying anything at all on their second homes.

    This may be technically legal, but is clearly not ‘fair’. After all, I don’t have a second home paid by the taxpayer.

    Obviously, Mrs Hodge will shortly be calling for them all to be prosecuted for this appalling breach of no law at all.

  4. A fine old Nottingham company…

    Stop it, I’m getting misty-eyed!

    Why the left gave John Major stick for his old maids on bicycles comment I’ll never know, they’re not exactly immune to looking at the past with rose-tinted spectacles.

  5. “If they won’t pay up, they have warehouses that can be seized.”

    It’d be worth it, just for the effect on the political party that did it. Grabbing all those warehouses in various cheap bits of the country, a few million quid worth of real estate. The blowback from the silent majority would be similar to the effect that industrial action had on the Labour party for 18 years.

    One day, I want someone from Amazon to turn up at one of Hodge’s select committees in a black suit, sucking on a Big Kahuna Burger shake and after she says her piece, drains the shake, looks at her and says “are you gonna bark all day little doggie, or are you gonna bite?”

  6. So, invoking Stalin (“how many gunboats..?”) and the Spanish Inquisition in the same article, as well as advocating arbitrary seizures by the State. How thoroughly “progressive”.

  7. Tim Newman,

    “Why the left gave John Major stick for his old maids on bicycles comment I’ll never know, they’re not exactly immune to looking at the past with rose-tinted spectacles.”

    The left are far more backward-looking than the right. It’s the left’s major weakness, that they don’t have a forward-looking vision, they just constantly repackage old, failed ideas as new. Look at how they’re weepy about libraries and high streets closing, like having to take a load of bus trips to get books is better than clicking a button.

  8. She’s getting a bit of a hiding in the comments. I wonder if the Guardianbores are finally starting to wake up to the likes of Rusbridger, Monbiot, Toynbee etc.

    It would be nice to see Polly go below the line and debate with some of the commenters on her articles, but she doesn’t seem game for that.

  9. Hezza actually said this?

    When I recently asked Michael Heseltine what he’d do about the avoiders he was unequivocal: “Go after them! How many gunboats have Amazon got?” If they won’t pay up, they have warehouses that can be seized.

    I always knew he was a prick.

    This is the language of the looters from Atlas Shrugged. Or, Ming the Merciless.

    “Some bastard is selling things to British people, helping the serfs taxpayers make the little bit of their income we let them keep to go further? Seize them!

    It’s time Tarzan got treated by the Liverpool Care Pathway.

  10. Stigler-

    Indeed. This is my point about Feminism. It pretends to be a “progressive” movement, but like all actual Progressive movements it’s trying, depending on context, to take us back to either 1950 or 1850.

    The left in general still haven’t stopped mourning the collapse of the 1940s dispensation in the 1970s.

  11. OK, can seize warehouses – causing a mad rush to move warehousing out of this country by every company capable of it!
    The contents of the warehouses however – that will mostly belong to other companies!
    Those using amazon fulfilment will own own stock or its owned by suppliers. Amazon will have considerable stock owned by suppliers.

  12. Martin-

    You think the social justice stazi care about little details like ownership? All property is theft anyway, remember.

  13. Bearing in mind that the tax affairs of both the Murph and La Hodges are, shall we say, a little opaque, one would have to have a heart of stone not to laugh.

  14. His many gunboats does the Conservative Party have?

    A serious question. If your political outlook is to disregard the Law and act like a fascist state, you really have to be sure you really are top dog and will be for a long while. Because once you have abolished all the rules, all bets are off, and there are lots of people out there who are better at it than you and are just itching for a go.

  15. The left are far more backward-looking than the right.

    Indeed. I don’t know which New Labour clown came up with the description of half his support base being “small-c conservatives” but in that one instance he was bang on.

  16. It would be nice to see Polly go below the line and debate with some of the commenters on her articles, but she doesn’t seem game for that.

    She’s probably unaware people are able to comment. I can imagine her submitting her copy and sitting back in her Tuscan villa, thinking everything is still like the good old days when nobody could answer back save for 5 or 6 carefully selected letter writers.

    Or was it Polly who got a nasty shock some years back when she read the comments for the first time and found she didn’t like what the oiks had to say? It was either Polly or one of her ilk.

  17. “One day, I want someone from Amazon to turn up at one of Hodge’s select committees in a black suit, sucking on a Big Kahuna Burger shake and after she says her piece, drains the shake, looks at her and says “are you gonna bark all day little doggie, or are you gonna bite?””

    Seriously, I’d pay good money to see that, and then watch all the useless froth…

  18. Tax is a big vote-winner. How can high-street chemists who pay their tax compete fairly with Boots who doesn’t

    Umm, because corporation tax is paid on the residual, the profit? Which is the result of the competition? So, by the time this tax bill is issued they’ve already done the competition thing?

    I think the complainy thing is that they are artificially reducing that profit number (due to loan interest etc), on which that tax bill is based, all perfectly legally of course. Ie, unlike the local company, the multinational can simply reduce that “profit” number which is reported to HMRC.

  19. Tim Newman – good point. I wouldn’t be surprised if he did though. Maggie should never have let him darken the door of her Cabinet.

  20. “When Monaco went a step too far in tax cheating, General de Gaulle surrounded it with troops and threatened to cut off their water supply.”

    Fookin ‘ell, I don’t expect much from Toynbee but approvingly burbling about medieval siege tactics is a new one even for her.

    What’s next? Using HMRCs trebuchets to fling bodies of the enemy over the battlements? Sapping the walls of Amazon fulfillment centres before trundling in the siege tower full of chainmail clad Taxmen?

  21. Of course, a lot of this moaning from Hodge, Murphy et al springs from the fact that some countries charge less tax than the UK so it makes sense to base operations in those countries. So what does Hodeg want? All countries should have UK tax rates? Maybe some countries don’t want or need to tax the bejeezus out of business and people? And what of countries with higher tax rates than the UK? Why isn’t Hodge demanding that UK companies exporting to the US go out of their way to establish a presence there so they can pay corp tax at 35% instead of the mere 21% in the UK?

  22. “Why isn’t Hodge demanding that UK companies exporting to the US go out of their way to establish a presence there so they can pay corp tax at 35% instead of the mere 21% in the UK?”

    Because they’d be avoiding UK corp tax at 21% by paying US corp tax at 35%, duh 😉 The WGCE said as much himself in a similar analogy involving Germany.

  23. What Rob says. Because computer-literate revolutionaries can source 99% of their needs from Amazon, eBay, and their local hardware store – drones, jammers, computers, phones, propane etc. They would have to make their own C-4.

  24. Re Office of Tax Responsibility – we have one of his admirers grovelling to him again (although she does make an excellent point about Hodge’s possible impartiality):

    Richard, to his credit on this occasion, shows some genuine restraint and passes on the obvious suggestion… But his good friend Ivan won’t let it pass…

    http://www.taxresearch.org.uk/Blog/2015/02/05/if-labour-has-any-sense-it-would-got-for-an-office-for-tax-responsibility/

    (6th Feb / 12.11am)

    I wonder if Richard might be tempted if Le Hodge was to dodge the idea. For him, that would surely be the grand finale of a glittering career. And for which he might possibly expect in due course to be knighted…

    First off, it just needs Ted to win.

  25. Jack, indeed – or even “I speak to the truth, you talk to the hand, and she taketh the pith”…

    I’m half expecting a clown to wade in next and eulogise as to how such courageous expertise could lead to the end of all poverty, famine and neo-flatulence…

  26. Stigler– raised a smile
    PWC exec to HofC committee “Yeah. It breaks down like this: it’s legal to buy it, it’s legal to own it, and, if you’re the proprietor of a hash bar, it’s legal to sell it. It’s still illegal to carry it around, but that doesn’t really matter ’cause… get a load of this: if you get stopped by the cops in Amsterdam, it’s illegal for them to search you. I mean, that’s a right the cops in Amsterdam don’t have.”

  27. Tim Newman

    If you follow the ‘pendant’ link (referring to Tim W) you should be directed to La Toynbee’s first encounter with the comments!

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