The Guardian - Hypocritical Gobshites!

As I have stated before, it's not just the politicians who are hypocrites but also the media who feed off them.

Step forward the bastion of the "moral left" the Guardian, which yesterday published an article about the finances of David Cameron's family under the attention grabbing headline "Cameron Family Fortune Made in Tax Havens".

I will allow one of my ICAEW chums, Christie Malry, to explain why this story is bollocks:

"Ooh, have we caught the Cameron family doing something naughty?

David Cameron's father ran a network of offshore investment funds to help build the family fortune that paid for the prime minister's inheritance, the Guardian can reveal.
Though entirely legal, the funds were set up in tax havens such as Panama City and Geneva, and explicitly boasted of their ability to remain outside UK tax jurisdiction.

Er, no (emphasis added):

The structure employed by Cameron senior is now commonplace among modern hedge funds, which argue that offshore status can help attract international investors. UK residents would ordinarily have to pay tax on any profits they repatriated, and there is nothing to suggest the Camerons did not.

So they've put a bunch of money into a place where it's not subject to UK tax. They'll be subject to UK tax whenever they bring any money back to the UK and there's no evidence or allegation that they haven't complied with their tax obligations at all.

This isn't tax avoidance, because not even the mighty brains at The Guardian seem to be able to articulate precisely what taxes have been avoided."

Well said Christie!

Now there is of course another point to be made about the Guardian's hissy fit over tax avoidance (even though their story states clearly that there is no avoidance in this particular case), what of the Guardian's own dealing with HMRC and it's use of Auto Trader as a possible "vehicle" (pardon the pun) for tax avoidance?

Here I will refer you to Tim Worstall:

"There’s a reorganisation from the Scott Trust to the Scott Trust Limited in 2008.

2008 is also when that 50% sale of Autotrader went through, leading to the £300 million profit which was not taxed: quite righteously not taxed because it was a subsidiary of Scott Trust Limited and the sale of a subsidiary of a limited company is not, under the SSE rules, subject to corporation tax (technically, a chargeable gain).

The question is: if the Scott Trust had not reorganised into the Scott Trust Limited, would some form of tax have been due on that £300 million?

That is, did the reorganisation alleviate some of the tax bill on that capital/chargeable gain?"

Oh, and by the way, don't forget that the Guardian Media Group set up a Cayman Islands company to minimise its own tax liability.

I think the phrase hypocritical gobshites springs to mind here!