Starbucks Solidarity

st pauls

The unwashed hordes who support UK Uncut will be harassing low-paid workers in Starbucks today. It seems like only yesterday that the Occupy crowd were queuing up outside the St Paul’s branch for a fair trade skinny decaf. If you are doing a bit of Christmas shopping today maybe pop in and show some solidarity with the workers…

MILT: Mums I’d Like To Tax

It’s taken some time but it seems the Labour kickback machine is getting into gear. The dividing lines are being drawn over the whether or not Labour back the Welfare Uprating Bill that will apparently be published this side of Christmas. In the meantime a nice row is brewing over the so called “Mummy Tax”. After granny and pasties, hidden hits are de rigueur these days. A friend of Ed Balls tells Guido this morning:

“Osborne effectively branding mums, taking time out from work to be with their new baby, as work-shy benefit scroungers is a big political mistake.”

Guido is not sure how a reduction in hand-outs is a “tax”, but the issue is certainly potent. Mumsnet will be unbearable today…

Halfon to Campaign for ‘Great Gordon Brown Repeal Bill’

gordonToday’s Indy reports on rumours that fuel duty campaigner Rob Halfon will turn to the 10p tax rate for his next trick. Guido can confirm that Halfon will push George Osborne to repeal Gordon Brown’s abolition of the 10p rate, bringing it back for everyone earning under £15,000. The move is inspired by work done by the ASI to produce a living wage through tax cuts rather than wage fixing. Halfon will lobby the treasury to make the move by the 2013 budget, 2014 failing that. A friend of Halfon tells Guido that Gordon’s 10p rate abolition was a “reckless, lunatic thing to do, Robert wants to put that right”. They’re calling it the Great Gordon Brown Repeal Bill…

Margaret Hodge Worked for PriceWaterhouse

When Margaret Hodge went off on one about the ‘Big 4’ professional services firms this morning, she awkwardly forgot that half the shadow cabinet have employed staffers from PricewaterhouseCoopers during the last year. Could there be anything else languishing deep down in Hodge’s memory that she needs reminding of? Something that happened before she became an MP, perhaps? Maybe to do with a past career choice?

Between 1992 and 1994 Hodge worked as a senior consultant for, you guessed it, PriceWaterhouse, as they were known before the 1998 merger with Coopers & Lybrand. Guido would ask what her duties were, but she’d probably just dodge the question…

Hodge the Dodge: Satire is Dead

Question-dodging Margaret Hodge had some nerve asking the PM about tax avoidance today, and when she got her phone out to tweet afterwards the irony knew no bounds:

Never mind the fact that she still hasn’t answered Guido’s repeated questions about her own tax arrangements. Come on Margaret, what was that about failing to answer questions? 

Broke Guardian Selling the Rest of the Auto Trader Silver

Somehow Sky beat the Media Guardian to the story in their own backyard – GMG are selling their remaining 50% stake in Auto Trader for up to £600m. Things must be getting really bad…

Of course it was the sale of the first chunk of the car classifieds goldmine that employed the finest tax avoidance techniques known to the Cayman Islands. Guido will be watching this sale closely…

Bring It On Hodge

Margaret Hodge told the Daily Politics that she will be taking action against anyone that points out that her  family firm Stemcor pays very little corporation tax on a billion pound turnover. Yet, she will still not explain the exact nature of her “tiny, tiny, tiny” shareholdings worth several million pounds and the trusts involved. Where is our writ? Where is the letter before action? Guido says: Bring it on.

Video via @LiarPoliticians

All Eyes on Hodge the Dodge

dodge

Margaret Hodge is enjoying her day in the limelight but continuing to dodge Guido’s questions about her own perfectly legal and sensible tax efficiency. The slayer of Starbucks and chief inquisitor at the Public Accounts Committee has been peddling around a Private Eye story that she says exonerates her over the tax avoidance allegations put to her by Tory MP Priti Patel. The Eye claim that one figure used by the Telegraph and Mail was “complete b******s”, but there was more…

Cute as it is of the Eye to fight her battles for her, their whitewash conveniently ignores why Hodge described the valuation of her family business shareholdings as “tiny, tiny, tiny”, and whether or not – as even Polly Toynbee suggests – placing some shares in trust reduces the inheritance tax liability of her children. Guido put those questions to her again last week, but still Hodge is dodging answering. If she called Stemcor to the Public Accounts Committee, as recommended, we would get to the truth once and for all…

Guardian Hosted Seminar Encouraging Tax Avoidance

To mark the Guardian’s ‘Offshore Secrets’ week Guido has been exposing some home truths of their own over the past few days. On Monday GMG’s Cayman Islands company was shown to still be active, while yesterday a special Guidorama investigation revealed that their King’s Place offices are owned by a tax-exempt offshore investment trust. Guido can now reveal that last month the Guardian hosted a seminar in which attendees were openly advised on how they could avoid tax:

“Guardian investing’s seminar will introduce and explain the principles, benefits and risks of investing and help you determine whether you could be making more from your money, with the aim of helping you achieve your financial goals. During the seminar we will also introduce our unique proposition Monitored Informed Investing (MII), discuss what you could do to mitigate Inheritance tax and protect your estate from a potential 40% Inheritance tax bill and look at how you can effectively plan for retirement.”

The seminar, held at the Guardian’s tax efficient offshore-owned York Way offices in October, was organised by Guardian Investing, GMG’s personal finance advice team. This is no third party operation, the Guardian has approved, condoned and even put its name to helping people avoid inheritance tax. Their high-minded journalists wax lyrical about hiding money from the Treasury’s coffers, all the while encouraging tax avoidance on the quiet. There is no end to their hypocrisy…

Guidorama Investigation: Guardian Offices Owned Offshore

Day two of the Guardian’s ongoing Offshore Secrets investigation focused on “who is buying up London: the real identities behind Britain’s secret property deals”. Apparently some 100,000 tax avoiders have been purchasing British properties and offices using offshore companies, hiding their dealings in the UK and reducing their bill to the exchequer. Wouldn’t it be ironic if the Guardian’s very own offices were owned by an offshore company? Surely not…

Guido can reveal that 90 King’s Place, the Guardian’s offices in central London, is owned by a tax exempt offshore investment trust managed from Germany:


If and when the trust’s owners ever decide to sell the property, bought for £234 million and now worth considerably more, the owners could sell the trust offshore rather than the property itself and avoid all UK taxes. The trust itself is exempt from corporation tax in Germany. The Treasury will be denied millions of pounds.

It is incredible that the Guardian is paying millions to an offshore trust which is structured in such a way that it pays no corporation tax anywhere in the world. Guidorama tried to contact James Ball, the Guardian investigations journalist at the forefront of the Offshore Secrets series, he said he was too ill to speak to us, the Guardian Media Group’s press office claims that all the press officers are abroad. Caught on camera Patrick Wintour, the paper’s political editor, pleaded ignorance.

The hypocrisy of the Guardian moralising about tax-avoiding offshore owned properties when it is actually based in one is priceless …

Guardian’s Offshore Secrets: Guardian Media Group Cayman Islands Company Still Active

 

In 2011 Guido produced a video highlighting Guardian Media Group’s financial hypocrisies, provoking a rambling article from editor Alan Rusbridger and another self-justifying piece in the paper blaming the decision to place hundreds of millions in assets offshore on their investment partners Apax.

Rusbridger argued essentially that it is a tough world for his newspaper so they can’t be pure in their business practices. A transparently self-serving argument. It remains the case that despite the Guardian’s high-mindedness it has tax dodging in its DNA. The original trust structure was set up by CP Scott to avoid inheritance taxes. That was wound up in 2008 to exploit a loophole enabling them to pay zero capital gains tax on £307 million in profits. But they haven’t stopped there.

Guido checked with the Cayman’s company registrar yesterday to see if a certain controversial tax-exempt corporation was still operating. In 2008 The Guardian claimed GMG Hazel Acquisition 1 Limited, a GMG-owned company, would be transferred into their investment partner Apax’s offshore structures, normally when this happens there is a name change. The name is unchanged to this day, strongly suggesting the ownership is unchanged. In the spirit of their Offshore Secrets investigation into tax havens, sham companies and nominee directors, perhaps it is time the Guardian explained why

  • 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?

There may well be an innocent explanation, these are the sort of questions they ask of others…

Further reading on the Guardian‘s tax hypocrisy:

Priti Patel Demands “Hodge the Dodge” Calls Stemcor to PAC

Priti Patel has written a strongly worded letter to Margaret Hodge demanding that she calls Stemcor in front of the Public Accounts Committee for a grilling –  as Chair of the PAC she would have to stand aside when Stem or gave evidence to avoid a conflict of interest because of her position as a shareholder with millions tied up in Stemcor. Her family firm has a multi-billion pound turnover yet paid a mere £157,000 in tax. Much like Google, Amazon and Starbucks who have already appeared in front of the PAC…

Letter in full:

Ouch…

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. 

[…] Read the rest

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Quote of the Day

Alan Sugar on Jeremy Corbyn:

“It’s clear you alluded to students refunds to get votes from young impressionable people. You are a cheat and should resign.”

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