Saturday, March 23, 2013

Tax and how it hurts (part 3)

If we think the affairs of Mr Blair are a tad confusing, how about another individual whose affairs are a lot clearer but less savoury?
Let's look at Sir Philip Green. Never mind his early years, they are all available elsewhere.
Let's look a bit nearer to today and a quote from him during the 2010 election run-up:
"Cameron and Osborne understand what needs to be done by giving more tax breaks to dodgers like me They get it."
Yep! Says it all really, doesn't it? "more tax breaks to dodgers like me" indeed!
His various companies seem to be above board, paying the tax due on their operations. Good for them!
However, back in 2005, he declared a dividend in one of his companies, Arcadia, which meant that as the owner of 92% of the shares in that company, he & his family had a £1.2 Billion pay day. How many!
£1.2 Billion, that's how many!
Of course, Sir Philip pays tax on his salary in the UK. So what's the problem?
Well, the company Arcadia is in his wife's name. She lives in Monaco and pays no tax. So the £1.2 Billion went to her account in Monaco and attracted zero tax in this country.
If tax had been paid in the UK on this amount, it is calculated it would have paid for the salaries of 20,000 nurses.
Not to worry though; there is no suggestion that anything he did was illegal.
Under the current 11,000 page tax code now in force, all he did was legal, even if distasteful. He is not alone though; it is reported that there are many rich buggers doing this in the UK; using "legal" tax loopholes.
Luckily for us, the new government in 2010 commissioned a review and report on how to improve government efficiency, including stuff like maximising revenue (tax) and minimising expenditure.
Don't forget, the government drones on day in and day out about the "deficit". This is the difference between government expenditure and income (or taxes). So, one would assume this review would encompass things like tax avoidance loopholes. Bet you it won't. The man appointed to carry out the review was Sir Philip Green!
Nope! I just read the review and tax doesn't get a mention. It is all about how the government spend lots of money on office premises, telephones etc. All depressing reading but not going anywhere near the real issue; a massive hole in the government's tax take.
Back to the corporate robbers; Cadburys was taken over some time ago by the American conglomerate, Kraft. What did Kraft do? Implemented a series of restructuring moves to channel Cadburys profits through Switzerland. According to Uk Uncut, a loss of £60 Million to the revenue.
Diageo is a company better known for its Johnny Walker scotch whiskey brand. Have a look at this report into yet another complex web of comanies here and companies there:
The article reckons that, if the company didn't ponce about and re-route profits etc to offshore operations, the difference in taxes would be the equivalent of the annual tax take from 20,000 households in the UK.
And here is a link (albeit an old one) that gives a clue to the tax arrangements of Tesco:
Isn't it high time we (the silly buggers who foot all the bills) got off our backsides and did something about this? How can we tolerate a government telling us we are a nation of spongers because their tax take is down, while they are going for cocktails, freebie holidays etc with the very people who could make a huge difference to the lives of ordinary, hard working people?

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