Archive for February, 2011
The following has been lifted unashamedly from Guido Fawkes website, Order-Order.com
On Saturday morning The Guardian decided to give UK Uncut a front page boost. The protestors managed to shut down three dozen of the 1,720 branches of Barclays bank. Surprised they found any branches to occupy given Saturday opening hours.
The gist of the shabby story was Barclays bankers are evil tax dodgers. The evidence was a hatchet job with the paper making the spurious claim that Barclay’s only paid 1% tax on their £11.6 billion profits. In arriving at a profit before tax figure of £11.6 billion, The Guardian has added the profit from the ongoing business (£4.5 billion) to profits from a disposed business (£726 million) and the gain made on disposal of that business (£6.3 billion) to reach a total of £11.6 billion.
What they chose to ignore however was the total tax take Barclay’s had to pay; payroll taxes, bank levy, non-recoverable VAT, employers NI, SDRT and so on. Over the weekend Tim Worstall and the FCA Blog tore chunks out of the piece:
The article compares the cash paid to HMRC in respect of UK corporation tax in 2009 (£113 million) to the profits generated by the consolidated Barclays group worldwide in 2009. In the UK, tax is paid in arrears, so 2009 taxes would relate to widespread 2008 losses, not 2009 profits.
Multinational companies such as Barclays pay tax in a number of jurisdictions. Generally speaking Barclays only pays UK corporation tax on profits it generated in the UK. Anything earned outside the UK doesn’t get taxed here. So it’s a howler to compare the UK corporation tax payment to the global consolidated profit. Most of those profits were taxed where they were made.
In 2002 (under Gordon Brown, Chuka), the UK government introduced the substantial shareholdings exemption, a corporation tax exemption for UK businesses disposing of a substantial shareholding in a part of their business. The idea was that businesses should be able to restructure their businesses without having to worry about chargeable gains implications. Barclays are heavily criticised by The Guardian for using it. The last time that Guido saw this being used was by the, err, Guardian Media Group to save themselves some £60 million of taxes in 2008:
“In 2008 GMG sold half of Auto Trader publisher Trader Media Group and made an exceptional (one-off) profit of more than £300 million. No tax was payable on the return from that sale because under UK law GMG qualified for SSE”
In 2008 The Guardian made £302 million in profits and paid no corporation taxes. The CEO, Carolyn McCall, was paid an £827,000 package. Yet we don’t see the UK Uncut crowd kicking up a stink about The Guardian’s tax structures or their fat cat pay and bonuses.
Over the weekend the Guardian editor Alan Rusbridger (half-a-million a year since you asked) tweeted about Barclay’s offshore holding corporations. Guardian Media Group holds hundreds of millions in assets in a Caymans Island domiciled offshore corporation.
Guido put it to the GMG press office that GMG has £223.8 million invested in an overseas/offshore hedge fund managed by Cambridge Associates which trades currency derivatives. They don’t deny it and have declined to confirm the fund’s structure for tax purposes.
Guardian readers seem to be under the illusion that it is owned by a not-for-profit charity. The Scott Trust was wound up in October 2008 and the Guardian is a for-profit-privately-owned media business, the well paid directors of which confirm in their annual accounts that they operate tax strategies in line with their fiduciary duty to the shareholders – just like any other business.
The old Scott Trust was set up in 1936 to avoid inheritance taxes and wound up in 2008 so that GMG could cynically exploit the SSE capital gains tax shelter to pay 0% in corporation taxes on their £302 million in profits that year. GMG claim that it was about modernising the holding structure, in fact it was a disingenuous cover for corporate venality.
For three quarters of a century the The Guardian has been shirking taxes, Guido has no problem with them acting in their shareholders’ best interests. The hypocritical cant from them however about others doing the same is beyond contemptible…
Barclays paid out just £113m in corporation tax in 2009, despite making a pre-tax profit of £11.6bn, according to chief executive Bob Diamond.
The revelation came in a letter to Chuka Umunna MP, a member of the Treasury Select Committee (TSC), who put Mr Diamond under pressure to declare how much of the £2bn in tax paid by Barclays to HMRC was in the form of corporation tax.
The vast majority of the tax paid by Barclays was pay-as-you-earn and national insurance contributions, while corporation tax accounted for 5.7pc of the total bill.
Mr Umunna said it was “shocking” that Barclays had paid so little in corporation tax in 2009.
“This revelation underlines the government’s failure to take the robust action needed to make sure that the banks which caused the crash pay their fair share, and will stick in the stomachs of small businesses struggling to borrow and ordinary people feeling the pinch of the government’s austerity measures,” said Mr Umunna.
See if you can spot the error. A clue is that the present Government only came to power in May 2010.
Hattip to: Working Class Tory
I honestly thought, from the noise the left were making about this, that it was the Tories who let the banks off all the Corporation Tax – and now it turns out that the Labour Party made them this enormous present.
Watch this video for true enlightenment.
As you can see, this is the way to conserve your laptop battery each and every day.
Watch this video and you will be enlightened and will, forever, know the difference. Thanks to my good friend Max for this gem – Lord knows what he would do if they took his editing software away!
John Maynard Keynes wrote…
“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens…. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
So have you stocked up on beans or gold yet? Have you taken Guido’s advice?
Inflation is always and everywhere a monetary phenomenon, if we don’t figure out a way to exit QE we will inevitably suffer double digit inflation. This is not an accident, it is as the Chinese have pointed out, the deliberate intention of policymakers in Washington and London to inflate away their debts. The cost of that policy will fall hardest on savers and pensioners who will be the collateral damage of this policy.
It is entirely cynical of Mervyn King and Ben Bernanke to scaremonger by talking of a bogus threat of deflation…
Thanks to Guido Fawkes at order-order.com for this reminder, he has a really good website and often gets the political news before the newspapers..
The following was written by Working Class Tory and was nicked from his blog – but I know he won’t mind as long as I have acknowledged the author and given a link to his website! This, in turn, was nicked from the National Review On Line, but like my blog, full acknowledgements have been given. When something is good and of great interest, it moves around!
Britain has the highest crime rate in Western Europe, despite having a third of all the closed-circuit television cameras in the world to oversee the population, and despite having more or less abandoned a suspect’s right to silence.
There are whole areas of the country in which the weight of the state in the economy is not far short of that of the state in Soviet Russia.
Thanks to state-sponsored social pathology, more than a third of the population is entirely dependent on the state for its livelihood, and would starve without it.
The last government created a new criminal offense every working day for ten years, such that no citizen can possibly know what is legal and what is not.
Arbitrary and constantly changing regulation makes life a nightmare for anyone running a business or a service.
While expenditure on education doubled between 2000 and 2007, the proportion of British children learning a foreign language declined by 75 percent.
In short, the British state is a swamp of corruption, all the worse for being more intellectual and moral than straightforwardly financial.
The IMF (International Monetary Fund) told the incumbents at the Treasury (Gordon Brown and Ed Balls) as early as 2004 that it was borrowing too much and spending too much.
But our illustrious duo totally rejected the IMF findings and, further more, bullied the officials into keeping schtum (silent) and not to broadcast their findings to all and sundry. During this time Ed Milliband was the economic adviser to the Government.
A new report finds that information was not only withheld from the public, but from the IMF as well, by our then Government.
In addition, IMF officials were intimidated and because of the withheld information, regulators at home and abroad failed to spot serious risks to the financial sector and the economy.
The story gets worse but I will keep it short here and you can watch this unfolding over the next week or so. One high point in the following week will be PMQs (Prime Minsters Questions) in the House of Commons. On Sky News at noon on Wednesday for half an hour. Look out for fireworks there.