Tuesday, May 21, 2013

Miliband’s Google Glass House

Just one problem with Ed’s Google-bashing this afternoon:

Guido readers will know that HuffPoUK is owned by AOL Limited, whose parent company is the Luxembourg-registered AOL Europe Sarl.

In 2010 AOL UK Limited, HuffPo’s esteemed owners, had a revenue of £78 million. Despite that they paid just £122,000 in corporation tax, cleverly moving £30 million out of the reach of the UK tax authorities by “repatriating” a dividend payment to a tax avoidance special purpose vehicle (SPV) AOL Europe Sarl, registered in the tax haven of Luxembourg. This meant, despite returning 38% of revenue to shareholders, they had an effective tax rate of less than 1%. Guido looks forward to Ed’s article attacking AOL and HuffPo for “going to extraordinary lengths to avoid paying taxes”. His spokesman insists that “all companies need to be responsible.”

Further reading on HuffPo’s tax avoidance hypocrisy:

James Tobin: Lefty Tax Campaigners Misuse My Name

A great little nugget in the FT this morning: before he died Professor James Tobin, he of the ill-advised Tobin Tax, accused loony lefty tax campaigners of misrepresenting his ideas: “I have absolutely nothing in common with these anti-globalisation rebels. They’re misusing my name”. The 2001 interview with Der Spiegel makes for very interesting reading:

“I appreciate attention to my proposal, but many of the praise comes from the wrong side. Look, I’m an economist and, like most economists, an advocate of free trade. Moreover, I support the International Monetary Fund, the World Bank and the World Trade Organization — everything that these movements are attacking. They’re misusing my name…  I feel that I’m being misunderstood and that my name has been wrongly co-opted for other people’s priorities. The Tobin tax offers no platform for the reforms that these people are seeking. But what can I do? Their intentions are good, I assume, but the proposals are badly thought out.”

For some reason you don’t hear that quote from today’s ‘Robin Hood’ wannabes…

Ed’s Evening With Evil Eric

Dave dodged the opportunity to ask Google supremo Eric Schmidt about his company’s commendable methods of legally maximising their shareholders’ profits when the pair met yesterday. Surely tomorrow Ed will keep his own promise and grill Schmidt about Google’s tax bill, when he is a guest of honour and keynote speaker at their Big Tent tech conference in Hertfordshire.

Presumably he won’t be repeating Margaret Hodge’s line about how Google “do evil” to his generous hosts, however…

Friday, May 17, 2013

WATCH: Tax For Dummies

The wonkish equivalent of a motherly lesson in life from the Taxpayers’ Alliance. Osborne’s suggestion that he would merge income tax and National Insurance two years ago has – surprise, surprise – gone absolutely nowhere. Hardly a shock seeing as the status quo lets him tax workers three times on the same income. It should be as easy as ABC…

Hodge the Dodge: Spot the Difference

Compare and contrast Margaret Hodge’s holier-than-thou hectoring for not answering questions with her own non-answers in her Kay Burley interview yesterday. Here is Hodge berating Amazon’s Andrew Cecil at the Public Accounts Committee:

“Well, I think what we are going to have to do is order somebody to come who can give us answers to the questions we ask. We will order somebody to appear before us who does that. It is just not acceptable. I don’t know what you take us for, but we need proper answers to perfectly proper questions, which are trying to establish the economic activity in this country, and therefore what would be a reasonable corporation tax due. That is our job. The idea that you come here and simply do not answer the questions, and pretend ignorance, is just not on. It is awful… I cannot believe you have come without the information-or they have deliberately sent you. We will order somebody who can answer the questions, in public… Dear, dear. Well, we will have to come back to this.”

And here is Hodge’s humiliating exchange on SkyNews yesterday:

MH: I’m not, I’m not, I told you, I’m not, I haven’t, you know I don’t have any dealings with the company day to day.

KB: But you did say that you were confident that every penny that should be paid in tax has been paid in tax. You’ve obviously looked into it?

MH: Yes, I’m confident.

KB: And 0.01% is enough?

MH: No it isn’t 0.01, it’s what they pay, what they pay, the profits they make on the business they transact in the UK.

KB: And how much is that as a percentage of tax?

MH: I, I, I mean I can’t give you that answer.

KB: But you did say that every penny has been paid in tax so presumably you have the figures?

MH: Sorry?

KB: You did say that every penny they should pay in tax has been paid…

MH: I, I also said to you I don’t work for that business. I’m a shareholder. I think you should ask the company if you have any questions.

“Dear, dear. We will have to come back to this”…

Thursday, May 16, 2013

WATCH: Kay Burley Skewers Hodge the Dodge

Margaret Hodge got the full Kay Burley treatment this afternoon. After a day of grandstanding at her committee, she was left spluttering about her 0.01% tax bill. Hodge had the nerve to bring up the newspapers who retracted their own stories about Hodge and tax. She has never asked for a retraction from Guido for the stories that appeared on this blog, nor has she answered our questions about her family’s use of trusts…

Read Guido’s stories and unanswered questions here.

Friday, April 26, 2013

Cosy Relationship Hodge the Dodge Ignores

20130426-085348.jpg Some strong words from Margaret Hodge and the Public Accounts Committee as they release their report on tax avoidance today. Apparently the Big 4 accountancy firms have an “unhealthily cosy relationship with government”, saying it creates a “ridiculous conflict of interest”. Readers will know of Hodge’s great expertise in this area, given that she worked for one of them, Pricewaterhouse, before she became an MP. Not to mention that Hodge’s friends on the frontbench such as Chuka, Balls and Rachel Reeves have all had PwC analysts on their payroll. Guido can reveal that Labour’s Shadow Treasury ministers Chris Leslie and Cathy Jamieson also currently have PwC employees working in their offices. For some reason Hodge hasn’t said anything about this, you might say, cosy relationship, but then she has form for keeping quiet about awkward questions…

UPDATE: Hodge comes in at number 15 on the Times’ Politicians Rich List (£) this morning with a mere £18 million fortune largely tied up in the family Stemcor steel trading business. She told  Michael Crick “I am a tiny, tiny, tiny shareholder”, an 8-figure shareholding is hardly what Guido would call “tiny”. Her shareholding is via family trusts which have the advantage that they won’t be subject to inheritance tax. Cunning.

Thursday, April 4, 2013

A Tip-Off For the Guardian Investigations Team

Today’s Guardian splashes on millions of leaked emails revealing the “secrets of the super-rich” using offshore tax havens to hide vast sums of money from the Exchequer. One company was missing from the list: GMG Hazel Acquisition 1 Limited, registered and still active on the Cayman Islands. The last time Guido asked the company’s owners, Guardian Media Group, for an explanation he was told their spokesperson was, er, abroad. When Guido asked Liz Forgan of the Scott Trust what was going on, she tried to blame it on Apax, GMG’s investment partner. Even Alan Rusbridger promised to look in to it, making a note of the company name on his phone.

Always one to help their journalists get to the bottom of the mystery, Guido suggests the Guardian’s investigations team take a look at the following:

  • If GMG Hazel Acquisition 1 Limited holds no assets, why have its owners continued to pay registration fees since 2007 so it can remain an active company?
  • If it does hold assets what is the total present value of GMG and associated companies’ assets held via the Cayman Islands or other offshore tax havens?
  • Does GMG Hazel Acquisition 1 Limited have “sham” nominee directors, if so, who are they?

If they could answer these questions, now that would be a great story…

Further reading on the Guardian’s tax hypocrisy:

Wednesday, April 3, 2013

After Merkozy, Whatever Happened to Hollibande?

François Hollande is at an all-time low after the Socialist government’s “Monsieur Propre” (Mr Clean), Jérôme Cahuzac, admitted to having a “bank account abroad” for the past two decades. The former budget minister with responsibility for cracking down on tax dodgers admitted to holding €600,000 in an illegal offshore bank account at UBS Switzerland. Hollande is now facing questions about exactly what he knew and when. Scandals are arguably the least of Hollande’s worries. His flagship 75% top rate of tax has been ruled unconstitutional, wealth creators and film stars alike are fleeing his tax tyranny. This week his new supertax on companies has been shunned by business leaders, and even the left-wing press are abandoning him. As unemployment hits a 16-year high, Hollande’s approval rating is at a record low for any leader so early into his mandate. France is suffering from the disastrous consequences of electing the socialist president.

Where is Ed Miliband in all this? Last summer Ed was welcomed onto the steps of the Elysee Palace by his new best friend, declaring:

“What President Hollande is seeking to do in France and what he is seeking to do in leading the debate in Europe is find that different way forward. We are in agreement in seeking that new way that needs to be found and I think can be found.”

As is plain for all to see, Hollande’s “different way forward” is dragging his country to her knees. Even Ed knows this, notice how he doesn’t seem to talk about his old pal François so much any more? France should serve as a warning to us all of what would happen under Monsieur Millibande…

Tuesday, April 2, 2013

Labour Advocate Tax Avoidance

Nottingham’s Labour council have found an especially underhand way of getting council tenants out of paying the bedroom tax: encouraging tenants to redefine two-bedroom flats as having one-bedroom. If Labour are standing by their line that the spare room subsidy is a tax, then surely using a loophole in the rules to get out of paying it is tax avoidance? Either they admit they are lying to voters, or they admit they are advocating tax avoidance. What’s it going to be?


Seen Elsewhere

Government Needs 10.6% Spending Cuts To Meet Target | IFS
What We Learned From the Referendum | FT
Scottish Crisis Moves South | Nick Wood
English Democrats Accidentally Celebrate Yes Victory | Pink News
Union In Its Current Form is Dead | Janan Ganesh
Labour Could Be Split in Two | Sun
Ashcroft Poll: Why Scotland Voted No | Buzzfeed
Boris: Change Barnett Formula | Sun
Cameron is Back | Dan Hodges
What Happens Now | James Kirkup
Cairo of the North | Quentin Letts


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Diane Abbott on the Daily Politics:

“Labour MPs will unite behind Ed Miliband, once we find out what our policies are.”



cynic says:

Can anyone help me? I went on holiday a week ago and returned to find someone has pulled out the stake and Gordon Brown is back and acting as Prime Minister. What did I miss? Has there been a snap election?


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