In 2002, Dame Vivienne’s UK business sold the rights to her trademarks to Luxembourg-based Latimo SA, which she also controls, for £840,000.
A year later Latimo SA became “the ultimate parent company” of the UK business by “virtue of its acquisition of the entire share capital”.
Accounts for the year ending December 31, 2013 show the company paid just over £2 million to Latimo SA for “licence fees” and a further £2 million the year before.
By paying the money to Latimo, the profits of Dame Vivienne’s UK business have been reduced by £2 million a year. In 2013, the UK company registered an operating profit of £3.2 million and a corporation tax bill on that of £780,000 – about a quarter of the operating profit. By paying her Luxembourg company £2 million, the UK company avoided paying an additional £500,000 to the UK Exchequer.
It’s an international brand. So, of course there are going to be brand payments to some company somewhere or other. And this really isn’t tax dodging for two reasons.
The first is that tax avoidance is, as Ritchie says, using a provision of tax law in a manner that Parliament didn’t intend. Yet for such brand and royalty payments the EU states that it’s actually illegal for a country to try and tax these payments on their way out. Meaning that the use of a royalty collection company is not just expected but expressley recognisde in law.
The ohter point is that given that Dame Vivienne is a UK resident she can’t actually get the money out without paying entirely normal tax on it. At best this delays a tax bill, not deletes it.
On the other hand the idea that the Green Party is being funded by what they themselves call dodged tax has me laughing like a drain.