Saturday, 27 October 2012

The silence of UK Uncut Legal Action

I'm still intrigued by the lack of what's going on with UK Uncut Legal Action and their case against HMRC that was due to be heard this month. To not provide any updates for a matter of months is very odd, and we are talking complete silence here, not even a "stay tuned" message. It's actually very disrespectful to those who have donated which all in all has added up to a significant sum of money. Even if there are legal reasons why they can't discuss details of the case, it doesn't preclude them from explaining the situation.

I've done some further digging on what they've been up to and there really isn't a lot apart from a couple of articles. First though, I've revisited their website and I think that it is important to highlight a few things on there:
It’s alleged that David Hartnett, the government’s top tax man, who loves to be wined and dined, met Goldman Sachs’ top brass in late 2010 and with a handshake agreed that the bank would be let off paying £10 million owed to the public purse in interest on an unpaid tax bill.
Compared to:
One of the most recent examples of this egregious practice occurred when Her Majesty’s Revenue and Customs(HMRC) allegedly made a decision that allowed global banking giant Goldman Sachs to avoid paying up to £20 million in tax.
Two things here; the amounts are inconsistent and based on rumour rather than anything released officially, and to be clear, whatever the sum was related to interest on outstanding tax, not tax unpaid/avoided/whatever. There's also a bit of embellishment here as the National Audit Office in their report on settling large tax disputes states that three of the departments' top officials (unnamed) made the settlement decision, not Hartnett alone.
Our fantastic lawyers are taking on the case on a ‘no-win, no-fee’ basis, but if we lose we are likely to have to pay HMRC and Goldman Sach’s legal costs.
Well that's not actually true given that Goldman Sachs aren't a party to the court case.

So what now?
UK Uncut will review the National Audit Office’s report Settling large tax disputes that was published on 14 June to determine if it should revise its case. It has 28 days from then to serve amended grounds on HMRC; and HMRC has until 14 September to respond. A full hearing will follow subsequently.
I wasn't aware of this but it is important, especially given that:
In relation to remedies, Simon J. indicated that there was no prospect of an order unravelling the settlement agreement.
As I've mentioned previously and UK Uncut Legal Action know full well, the dispute has been settled and Goldman Sachs will not be paying the interest that was waived. The best case that they can hope for is that the deal is declared unlawful in the court. However in the New Statesman, Tim Street, one of UK Uncut Legal Action's directors makes this statement:
Our aim now is to have the High Court declare that the agreement reached by HMRC with Goldman Sachs was unlawful. We also want the court to order HMRC to take steps to reopen the agreement it reached with Goldman Sachs about the interest owed and seek to recover that money.
Either he's being dishonest, stupid, or a bit of both - the judge refused permission for a case to quash the deal so it isn't going to happen. To not mention this whilst soliciting donations on the basis that there's a chance to get some money out of Goldman Sachs is borderline fraudulent. This is also very naughty:


So we have no idea when the court case is, if UK Uncut Legal Action changed their case in light of the NAO report, and if so, what HMRC's response was. Even if the court case does go ahead and the case is declared unlawful then so fucking what? Apart from lumbering HMRC (read: the taxpayer) with costs, nothing changes. My money is on UK Uncut Legal Action being wound up on the quiet prior to any accounts being filed.  If they wish to refute anything that I've said on this blog, elaborate on points already made, or answer questions raised, then right of reply is in the comments below.

Thursday, 25 October 2012

Where has the money gone?

Remember UK Uncut Legal Action? They were challenging a tax settlement made by HMRC in favour of Goldman Sachs. However just a day after the judge granted permission for a judicial review, HMRC released details of how the settlement was reached. Things have gone a bit quiet since then with no updates to their website and no tweets for over two months now. Given that the judicial review was meant to take place in October, there's not a hell of a lot of time left. In the absence of any update from them, and I did tweet and ask, I thought I'd throw the following out there - here's a extract from UK Uncut Legal Action's amended model articles that I got from Companies House:

What that allows UK Uncut Legal Action to do is to wind up and distribute the money to a similar organisation, the Objects of UK Uncut Legal action being:

So that would be UK Uncut then. Given that UK Uncut is not registered as a charity or company, has no constitution, and will claim everything is done by consensus therefore having no leaders, it's a financial black hole; perfect then for funneling away £17k raised for a court case that appears to have gone away. So prove me wrong UK Uncut Legal Action - let's see you in court and your accounts filed.

The hypocrisy of the Left...

Now as I understand it, Occupy are viciously anti tax avoidance and evasion, so you'd expect them to be transparent and squeaky clean with their finances. Not so it seems:


This is interesting:
I am requesting money for the camera which can be bought and imported from the US for £310 - (the UK price is £500). The £16.99 strap will attach to any bike helmet and by purchasing 2 MicroSD cards, there will be an opportunity to continue recording if one memory card is full.
That's clear then; by importing the equipment from the US to get it at a significant discount, they're evading customs duty and import VAT. Completely illegal. Just wait for the usual excuses to come out - "corporations/banks/banksters are doing worse", "the protest is important enough to justify it", and so on. Fucking tax dodging hypocrites.

Sunday, 21 October 2012

eBollocks

Since it has become trendy to display zero knowledge, even at a remedial level, of basic accounting and tax concepts and do a hatchet job of how little a multinational company supposedly pays in tax, now eBay is in the sights of some ignorant hack:
US auction site eBay has paid only £1.2m in tax in the UK, according to an investigation by the Sunday Times.
The newspaper said that its tax bill in 2010 comes despite eBay's UK subsidiaries generating sales of £800m.
Oh fuck, not this one again. A company's revenue has no bearing on corporation tax that it may or may not pay.
According to the Sunday Times, eBay had sales of £789m during 2010 in the UK at its four British subsidiaries. Using its worldwide profit margin of 23%, it would have made a profit in the UK of £181m, leading to corporation tax owed of £51m.
Instead, it paid £1.2m, the report said.
The 23% figure will be an average but it is meaningless in this context as the eBay subsidiaries in the UK don't trade with the public; they provide services to their Swiss parent company eBay International AG:

eBay (UK) Limited - "Recommends market penetration and advertising strategies for the UK internet market place to eBay International AG"

eBay KTA (UK) Limited - Holds 99.9% of the shares of Korean company Gmarket Inc. - it doesn't trade and is also loss-making.

Shopping.com UK Limited - "The principle activities of the company during the year were the provision of sales support and marketing services to Shopping ePinions International Limited." ePinions is an Irish company by the way.

eBay Promotions (UK) Limited - "The principle activity of the company in the year under review was that of online internet advertising and promotions." And once again, these services are provided to eBay International AG. The company is also in the process of liquidation.

So like Facebook, Google, and Amazon the actual company that trades with the UK is a foreign one, in this case Swiss by virtue of Switzerland being a member of the European Free Trade Association. Mystery solved - really, there is nothing illegal, dodgy, or even slightly suspect here.

Update on 8/12/12 - My mistake, it is eBay in Luxembourg that trades with the UK and can do so as part of the European Single Market.

Friday, 19 October 2012

Wanker jailed

I'm a bit surprised that Trenton Oldfield, Australian boat race saboteur, has been jailed for six months. It seems a bit harsh and pointless when we could have got a couple of hundred hours of community service out of him, preferably cleaning Oxford and Cambridge student digs. However I'm reminded of his (now defunct) entry on the list of RSA fellows:
Trenton is also working on debates within inter-disciplinary urbanism around notions of 'Darwinistic individual selfishness'.
I'm just wondering if he came across as much of an insufferable wanker in the court as he did above. Might have had some bearing to the sentence handed down...

Thursday, 11 October 2012

Killing off the debate

An article in student rag the Independent has convinced me that any sensible debate about personal and company taxation is over:
Facebook was accused last night of "disingenuous and immoral" tax avoidance after a new analysis of its UK business suggested the social networking giant paid just £238,000 in corporation tax in Britain last year.
Sound familiar? Well here we go again...
Although industry experts estimate the company made £175m in revenue from its UK businesses last year, Facebook is able to avoid paying millions in corporation tax by diverting most of its sales via Ireland.
Annual accounts published yesterday at Companies House showed Facebook UK Limited declared turnover of £20.4m using the entirely legal scheme. Yet Enders Analysis, an independent research firm, has estimated Facebook's likely UK sales at £175m last year as the world's biggest social networking website has continued to attract advertisers.
So here we have the EU Single Market in action, you know, free movement of goods, people, capital and services. It isn't a scheme, it isn't tax avoidance, the company is complying with tax law exactly as the UK and EU parliaments intended.
Labour MP John Mann, who sits on the Treasury Committee, criticised the willingness of web based companies to avoid paying UK tax. "It's disingenuous and immoral for these hugely profitable companies not to be paying tax in the countries where they are based and make a profit," he said. 
Now Mann really is a fucking idiot and this would be funny if he wasn't in a position of power and influence. Facebook's Europe HQ is based in Ireland as is Google's. Amazon's is based in Luxembourg. That is where the sales are made, where the majority of profits will be, and where they will pay the majority of their corporation tax assuming that any is due.
Mr Mann has suggested implementing a "traffic fee" which would charge companies that are predominantly internet based from being able to use and profit from British infrastructure.
 Mann clearly doesn't understand the internet either, the bellend.

What's killed off the debate then? Well tax can be pretty dry but scandal generally isn't, indeed it makes good story so a headline of "Corporate giant dodges £6B tax" sells more papers than "Long running tax dispute settled favourably to the taxpayer". Hence we now see fairly frequent articles like the one above, not just in the left-leaning papers but in the Telegraph and Mail too. You can lay the blame for this with the UK Uncuts and Richard Murphys of this world propagating the myths that the richest people and big business don't pay the tax they believe due and that there is a tax gap roughly equaling the deficit of around £125B that HMRC have been slack in collecting. That companies are now being attacked for complying with the law and not even trying to bend it is their fault. HMRC have recently tried to explain away tax settlements, their calculation of the tax gap, and taxation on multinational companies but as mentioned above, it's not news and few are listening. Until that changes then expect more articles like the one in the Indy today and worse, the likes of John Mann basing policy decisions on this misinformation, as starting from an incorrect position will probably mean you end up with the wrong result...

Saturday, 6 October 2012

Living Wage - Dead

A bit more on the living wage at the Labour party conference from Bristol Mayoral candidate and NHS diversity manager Marvin Rees:
In Manchester, he said: "My opponents have attacked me for saying I want a living wage for Bristol. It says more about them than it does about the living wage.
"They haven't got a clue about the hardships faced by thousands of families.
"They are out of touch with the people living on my street. They don't speak for them. We will."
When I last wrote about this, Rees hadn't explained how he was going to fund giving council staff a raise to £7.20 an hour if they earn less than that. It transpired that he is planning on cutting an unspecified number of "consultants" to cover the approximate £1M cost per year of doing this. Now you should only be bringing consultants on board for a specific, time-bound piece of work (i.e. a project) or to cover a short-term skills gap, so assuming that the council is managing its resources effectively, these people will be going when their contract is up. After that time, their cost won't be in a budget so it isn't a saving. If he gets rid of them during their contract, then what projects or services won't be delivered? This is probably all academic anyway as there is a problem:
Bristol City Council is facing budget cuts of £15m more than had been expected, the BBC has learned. 
The city's new mayor, due to be elected in November, will be asked to sign off cuts of £25m from next year's budget - a 7% cut from the current £366m budget.
Previously a sum of £10m had been agreed.  
A number of reasons are believed to be behind the proposed cuts, including less money due to come in from central government and more staff redundancy payments at the Liberal Democrat-led authority.
These cuts are in the context of a 2.5% increase in council tax. Now when Rees stated that his opponents attacked him for wanting a living wage, what they actually said was along the lines of "we want to look at what we can do for the lowest paid council workers but there's no way that we can promise anything". That's fair enough and was sensible given the further budget cuts that have since emerged. That leaves Rees, the favourite to win the election, with an undeliverable and, given the council tax increase, redundancies, and extra cuts, a rather unpalatable manifesto pledge.