Along-running dispute between HM Revenue & Customs and commodities giant Glencore over a £1.5bn tax bill may be decided in secret by a panel of foreign arbitrators, after changes to UK law and trade agreements.
For 15 years British officials have been trying – and largely failing – to tax profits shifted from Glencore’s UK-based trading arm to a holding company in the Swiss canton of Zug, findings by TaxWatch shared exclusively with The Observer show.
In that period, four-fifths of the company’s profits were transferred abroad in return for “non-routine services”, which HMRC has claimed should be valued at “zero”.
So this is the ISDS process. Which is, effectively, the ability to, outside the UK court system, find out whether the UK govt has obeyed UK law. You cannot appeal to “international law” under ISDS. Only to whatever treaties, laws, the govt itself has signed up to. So, the real test is whether govt is doing what govt said it would.
Which is appalling, obviously, making govt keep its word.
You know, like say the Vodafone case. Which was, at heart, whether Britain’s controlled foreign companies rules matched up with what the UK govt had signed up to with the EU’s free movement of capital rules. As the Cadbury case showed, no. So, Vodafone was won by Vodafone. At the ECJ of course – a foreign court testing whether the UK govt had lived up to hte law it had itself agreed to.
But then TaxWatch. Largely run by Richard Brooks who is the laddie who invented the Vodafone problem at Private Eye. So, at least consistent over the years – UK govt should not have to live up to whatever laws UK govt has signed.
One further joy is that TaxWatch is funded by Julian Richer who, you know, sold – wholly legally – his company without having to pay capital gains tax on the revenue from doing so.
“One further joy is that TaxWatch is funded by Julian Richer”
Did he lose his marbles or something?
The guy should have been knighted for Richer Sounds. Services to Getting People Really Good Hi-Fi. Why do people think that the 3rd Sector are the goodies, and that there’s something not great about getting The Matrix in Dolby 5.1? In my experience, most of them are bone idle grifters. How much more would the world have improved if the Joseph Rowntree Foundation were innovating in new chocolates (which have seen a dearth of improvement since the 1980s) rather than paying Richie?
The best charity stuff I see is a couple of people doing a thing with almost nothing official to them. Bring your laptop to the village hall on a Saturday and 2 blokes fix it up. Two women running a homeless cafe. The average girl guide group where 3 women plan the activities around a dining room table.
Got to admit that Richer Sounds is still a pretty marvellous company. Bought my huge OLED TV and 5.1 sound system from them last year and still in love with the richness of the colour, the quality of the digital Audio and most of all the price. £1,600 for the two combined.
So they don’t like foreign courts now? Make your damn minds up.
It all depends on how those foreign courts are likely to rule.
Consistency? What’s that?
Ian Hislop’s self-important folly over the Vodafone issue was the first big sign of how badly he’d gone off the rails. Along with the MMR nonsense I suppose. Meanwhile his belief that the establishment had stitched things up in both those areas was utterly inconsistent with his toe-the-line approach to Brexit.
Find the interview with Simon Mayo about MMR (Anthony Cox has it archived) and he really didn’t like the tables being turned and asked questions about how he behaved. At which point…cunt. You want to pontificate about others moral shortcomings, you’d better take some responsibility.
“Find the interview with Simon Mayo about MMR (Anthony Cox has it archived)”
May we have a link please. Timmy might also like to link to the Vodafone and Cadbury cases.
https://on.soundcloud.com/ZQZbsTTIfC3t7cSAqz
No. Not going for that scam.
“One further joy is that TaxWatch is funded by Julian Richer who, you know, sold – wholly legally – his company without having to pay capital gains tax on the revenue from doing so.”
Yeah but no but. He sold 60% of a company that makes £10m annual profits to an Employee Ownership Trust for just over £9m. Thats valuing the whole as c. £15m, or 1.5 times annual profits. I’d say he undersold his business by some considerable margin. Had he sold it to some private equity firm he’d might have got £50m (annual sales were £200m at the time). After paying tax @ 20% and using his £10m Entrepreneur relief (it was 2019) he’d have walked away with over £40m. So in fact he’s paid ‘tax’ of far far more than he would if he’d been greedy. Its just that tax went to the employees, not the government. Which frankly I think is a good thing given what the government would have done with it.
Ah. No. The £9 million was the first year’s payment. There are more payments than just that one.
Yes, I know AI says the £9 million was the full payment. But, no.
“The company will pay Richer an initial £9.2m for the stake” https://www.theguardian.com/business/2019/may/14/richer-sounds-staff-julian-richer “If Richer Sounds continues to be successful Richer will receive additional payments over a 15 year period”
You still don’t know or not if he’d have ended up with more money by selling it on the open market and paying the tax due.
And its not clear what the ‘additional payments’ are for, whether they are capital or income. He still owns 40% of the company, maybe they agreed to pay out a certain % of profits as dividends or something. And those payments are not guaranteed, they depend on the continued success of the business. If it goes bust he gets nothing. If he’d sold out to the private equity guys he’d have been able to disappear into the tax haven sunset with his money regardless of whether they drove it into the ground or not.
I still say he will have come out of the deal with less money than he could if he’d done it the ‘normal’ way.
The real point remains that Julian Richer arranged his tax affairs to suit his preferences but funds an outfit that seeks to stop others from doing so.
More or less overall, well, mebbe.
But the employee share plan buys his stake – the 60% – for a series of payments. Up to 15 in this case I think. The £9 million is only the first one.
And neither do you.
But we do know that moar tax would have been paid.
I’m not the one accusing Julian Richer of being a hypocrite……
That’s still insanely generous terms for an earn-out.