Margaret Hodge’s Multi-Million Pound Stemcor Trusts

Margaret Hodge didn’t take too kindly to being accused of tax hypocrisy by Priti Patel yesterday. The litigious Labour MP and ardent anti-tax avoidance campaigner insists she has done nothing wrong with her shareholding arrangements at 0.01% tax rate paying Stemcor. She has succeeded in scaring off the dead tree press from reporting her arrangements. Guido has been crunching the numbers and it seems Priti is on to something…

Hodge claimed in a grilling by Michael Crick earlier this month that “I am a tiny, tiny, tiny shareholder”. Her direct shareholding is 1.26% which, given that Stemcor paid out £4,519,000 in dividends last year, means she received some £56,939. That shareholding alone is worth £1.8 million. Hardly a tiny amount.

What’s more Stemcor confirmed yesterday that this figure “excludes shares held in trust or in her children’s names”. The company share register shows that Hodge holds several million pounds worth of shareholdings in trusts, including for members of her family. As Polly Toynbee helpfully explains, this is a clever way of minimising future inheritance tax liability:

“The big sell is trusts, special ones devised for this company’s clients, guaranteed to protect almost all your wealth from inheritance tax. They are right, it can be done easily. Put all moveables and all cash and investments into a discretionary trust, and it passes to your heirs without tax as soon as you die, not even waiting for probate. It counts as a gift so the beneficiaries need pay no tax either.”

Yesterday Guido challenged Hodge to explain the purpose of placing her Stemcor shareholdings in a trust other than to reduce the future inheritance tax liability of her relatives. She has yet to reply…

Letter From Priti Patel to Margaret Hodge
Tory MP Says Tax Avoiding Firm Threat to Hodge’s Position 

Tory backbencher Priti Patel is twisting the thumbscrews over Margaret Hodge’s family firm.

Hodging Her Bets

“Are you lying to your shareholders” barked Margaret Hodge as she had her moment in the limelight chairing a Public Accounts Committee hearing this afternoon with representatives Google, Starbucks and Amazon – three global companies that pay huge amounts of tax in the UK, but perfectly legally and sensibly reduce their tax bills.

Hodges’ mock incredulity, amateur dramatics and Vaz-esque playing to the camera would have carried more weight if she had not been busted over the weekend profiting as a shareholder from her family firm that paid just 0.01% tax in the  UK last year. Were Stemcor’s directors lying to her as a shareholder? Or is Hodge just a spectacular hypocrite?

HuffPo’s Luxembourg Tax Dodge Bonanza Part II
Pays Lower Tax Rate Than Starbucks

The Huffington Post is attacking Starbucks’ tax dodging this morning with the claim that despite earning millions in the UK it pays only 1% in corporation tax. Another headline clearly demonstrating how Mehdi Hasan’s appointment has shifted Arianna Huffington’s website markedly to the left. That left-wing politics are subordinate to corporate profiteering is graphically illustrated by the fact that AOL pays even less UK corporation tax than Starbucks, less than 1%, a miniscule 0.15%:

The latest company accounts available show that in 2010 AOL UK Limited, HuffPo‘s owners, had a revenue of some £78 million. Their accountants certainly earned their fees ensuring that AOL paid just £122,000 in corporation tax. They cleverly and arguably somewhat aggressively pulled £30 million out of the reach of the UK tax authorities by “repatriating” a dividend payment to AOL UK’s sole shareholder – a tax avoidance special purpose vehicle (SPV) AOL Europe Sarl, registered in the tax haven of Luxembourg. Giving AOL/HuffPo an effective tax rate of less than 1% despite returning a massive 38% of revenue to shareholders.

Not only does Arianna not pay her UK bloggers, her company doesn’t pay UK taxes either. Guido applauds their ingenuity in legally avoiding taxes, however the hypocrisy reeks. Left leaning HuffPo campaigns against tax avoidance yet shelters nearly half its annual earnings offshore in Luxembourg. People in offshore glass houses shouldn’t throw large, tax-shaped stones…

See also: Introducing Tax Avoiding HuffPo Luxembourg

Introducing Tax Avoiding HuffPo Luxembourg

HuffPoUK have jumped on the tax status exposé bandwagon, lambasting those terrible internet companies for avoiding tax:

At least they have been gracious enough to admit AOL does not make it into the top five companies on the internet. Guido wonders though, would that by any chance be the same HuffPo UK that is owned by AOL Limited, whose parent company is the Luxembourg-registered AOL Europe Société à responsabilité limitée?

The HuffPoUK exposé makes clear the benefits of such an arrangement:

“Amazon, the UK’s most popular shopping site, generated £3.2 million in UK profits last year yet managed to pay zero corporation tax as its European headquarters are registered in the tax haven of Luxembourg.”

Loads of media organisations have similar set ups, though most would not be so stupid as to throw stones from inside Arianna’s glasshouse. There was no byline on the post –  it seems whoever wrote it is ashamed to put their name to the: Biggest Piece of Hypocrisy Ever Seen on the Internet.™

UPDATE:

Labour Row Back on Millionaire Spin

Interesting that Labour attack dog Michael Dugher is rowing back on Millionaire Miliband’s tax spin this afternoon. Dugher is refusing to repeat the absurd idea that Cameron has written himself a £40,000 cheque, now nuancing the argument by noting that only 8,000 millionaires will benefit. Might be something to do with Dave slaughtering Ed on tax during his speech:

“Did you hear what Ed Miliband said last week about taxes? He described a tax cut as the government writing people a cheque. Ed…Let me explain to you how it works. When people earn money, it’s their money. Not the government’s money: their money. Then, the government takes some of it away in tax. So, if we cut taxes, we’re not giving them money – we’re taking less of it away. OK?”

An important distinction…

Farron Struggles to Defend LibDem Tax Avoidance Scheme

24 hours after Danny Alexander warned tax avoiders “we are coming to get you”, LibDem President Tim Farron has unveiled the party’s new tax avoidance legacy scheme. Rich delegates were plied with red wine and chocolate gateaux in the Grand Hotel’s Empress suite as Farron and his team explained how wealthy donors could reduce their inheritance tax bills.

Following in the tax avoiding footsteps of Labour and the Tories, rich donors were told how “a gift in your will to the LibDems will be tax efficient as gifts to a recognised political party are deducted from your estate before inheritance tax is calculated“. Guido asked an uncomfortable Farron what he thought about his party encouraging members to avoid tax, but the party president attempted to shift the blame by holding his hands up and insisting “I didn’t put it together”. It was later emphasised to Guido that the scheme was “within the law”. It seems Danny Alexander’s promise does not extends to the after life…

Hollande’s Taxodus: Dave’s Red Carpet Already Well Worn

Fresh from the humiliation of his premature gold medal boasting at the Olympics, President Hollande is facing the much predicted taxodus from Paris to London.

This morning’s City AM reported:

“London-based recruitment firm Astbury Marsden, which specialises in the banking sector, has seen a 51 per cent rise in French-language applicants in recent months, compared with the same period of 2011.“There is a definite spike in French-speaking candidates,” said managing director Jonathan Nicholson. We have not seen similar increases in candidates from other countries.”

When Hollande vowed to steal 75% of his hard-working countrymen’s income earlier this year Dave promised to roll out the red carpet. Now they’re saying au revoir to François…

Labour Wonks v Page 3 Girls

Labour wonk-shop IPPR have declared war on the Sun‘s Page 3 girls as they publish a report claiming that the government’s bleeding of motorists via high fuel taxes is just a “myth“. Earlier this week the Sun[…]

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More Magic Money Tree Madness

Richard Murphy is a left-wing economist, accountant and blogger who has advised Brendan Barber’s TUC and Mark Serwotka’s PCS and written regularly for the Guardian. Twitter users will know that he maintains a close relationship with several tweeting Labour MPs. […]

+ READ MORE +

Britain Sends Aid to Mars

The Indian government has today announced plans to launch a mission to Mars next year. The $82 million project, funded in part by the British taxpayers’ money meant for starving children, will see an unmanned spacecraft set off for the […]

+ READ MORE +

Unions Help Teachers Pay Less Tax

Guido would like to express solidarity with £142,000 per year union fat cat Christine Blower, who has found an innovative new way to reduce her members’ tax bills. For all her moralistic demands that people “play fair on tax[…]

+ READ MORE +



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