Harra Digs Zahawi's Grave

 

Breaking:

Nadhim Zahawi has not made an 'innocent error' in his tax affairs, head of HMRC has suggested

Jim Harra told Public Accounts Committee that 'there are no penalties for innocent errors'

'If your error was result of carelessness then legislation says a penalty applies'

— Steven Swinford (@Steven_Swinford) January 26, 2023

Free Tax Advice For Corbyn

1 The Queen does not have to pay tax, therefore she cannot avoid or evade something she doesn't have to pay.

2 HMRC stands for Her Majesty's Revenue and Customs, any tax paid by the Queen (voluntarily) is her paying herself.

3 HMRC have outsourced their property to Mapeley (DYOR)

4 Oh, and this....

Labour rent their London headquarters from a tax exempt property unit trust fund based offshore in Jersey: https://t.co/DWZ3FiHi0Z

— Alex Wickham (@WikiGuido) November 6, 2017

Advice To David Cameron

HMRC stopped being called the "Inland Revenue" when the Inland Revenue and Customs merged many years ago.

Question Re Danny Beaker Alexander

Does anyone really believe that the £77M that Beaker Alexander is puffing himself up over is new money outwith HMRC's budget, or simply being skimmed from other parts of HMRC's existing budget?

Question For Ipsa

I thought that being an MP was a public service, not a small business?

Question For David Cameron

Why have you declared open season on every Tory MP, every Tory candidate and every Tory donor with your comments about Jimmy Carr's tax avoidance scheme (K2)?

Are you mad?

A politician lecturing us on morality is as natural as a cat walking on its hind legs.

David Gauke In Denial

David Gauke, Exchequer Secretary, is in denial about HMRC's chaotic performance wrt answering the phones.

"HMRC does not have a target time for answering telephone calls.

HMRC uses a variety of measures to assess the accessibility of telephone services, which include the percentage of call attempts handled by its contact centres.

In 2011/12, HMRC has significantly improved the number of call attempts handled to 74% (compared to the 48% in the previous year)."

I guess he leaves such tedious matters (ie tax and dealing with HMRC) to his accountant?

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!

Georgie Porgie Gets His Arse Bitten

Last week I wrote the following:

"The government, for reasons best known to itself, has decided to play up to people's prejudices  and encourage media hysteria over the tax affairs of people classified as "rich".

This is rather odd, given that Cameron, Georgie Porgie (Chancellor of the Exchequer) and their associates are not exactly short of a few bob themselves. Anyhoo, wee Georgie has today expressed shock at the fact that some "rich" people organise their tax affairs in a manner so as to reduce their tax burden. "

A week, as the old saying goes, is a long time in politics. Georgie Porgie has now released data showing the tax paid by those who he defines as "rich".


Oddly enough, the data contradicts his hysterical claims that "rich" people habitually "dodge" taxes.

Robert Peston has written the following:

"so it is striking quite how many people paid tax greater than 40% - a proportion 10 times greater than those who succeeded in paying almost no tax. Or to put it another way, perhaps the highest earners have had a slightly unfair press, because the majority of them seem to have been paying their proper share."

I noted last week that Georgie's policy of:

"Whipping up the media into a fire storm of hysteria over this may serve a short term political goal"

would come back to bite him and Tories on their arses.

However, I did not think that it would happen quite so soon.

Georgie Porgie Is "Shocked"

The government, for reasons best known to itself, has decided to play up to people's prejudices  and encourage media hysteria over the tax affairs of people classified as "rich".

This is rather odd, given that Cameron, Georgie Porgie (Chancellor of the Exchequer) and their associates are not exactly short of a few bob themselves. Anyhoo, wee Georgie has today expressed shock at the fact that some "rich" people organise their tax affairs in a manner so as to reduce their tax burden.

Osborne told The Daily Telegraph:

“I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right. 

I’m talking about people right at the top. I’m talking about people with incomes of many millions of pounds a year. The general principle is that people should pay income tax and that includes people with the highest incomes.

I’m not allowed to be shown the names of the individuals but I’ve sat with the most senior people at the Inland Revenue, the people who run some of the high net worth units there. They have given me examples, anonymised examples, and so we are taking action."

Georgie claims that he was shown anonymised tax returns of "rich" individuals who were paying a tax rate of "only" 10% or less on their income.

Well Georgie someone was having a laugh with you, the tax returns were yours!

All "joking" aside, as Chancellor how is that this is only now "news" to Osborne??

Whipping up the media into a fire storm of hysteria over this may serve a short term political goal. However, it will come back to bite the Tories on their arses:

1 Tax avoidance is legal

2 George, his friends and the boards on which they sit use the services of accountants, trust funds, schemes etc etc to reduce their tax bills.

Tory Tax Avoidance Hypocrisy

Last week in his Budget statement, George Osborne said:

“I regard tax avoidance and, indeed, aggressive tax avoidance as incredibly repugnant.”

For good measure he added that the Government would come down “like a ton of bricks” on those who seek to avoid stamp duty.

Step forward Andrew Mitchell, the International Development Secretary, who invested funds in DV3 Ltd a network of privately owned firms which is now at the centre of a tax avoidance case.

One of the subsidiaries of DV3 Ltd purchased the lease on the Dickins & Jones department store building in central London in October 2006 for £65.1M.

A month later, the subsidiary sold the lease to a partnership, also controlled by DV3, for £65,100. The company maintained stamp duty was calculated on the lesser amount, reducing the rate from 4% to zero.

HMRC challenged the transaction alleging it was a case of “aggressive tax avoidance” but lost at a tax tribunal in February 2011.

It is appealing the decision.

Taxes are, after all, only for "little people" and pasty eaters!