It didn’t take long for HMRC to start crowing about their “success” in defeating UK Uncut Legal Action over its deal with Goldman Sachs. On the day of the decision they tweeted this:
"The High Court’s dismissal of UK Uncut’s claim puts to rest the fallacy that HMRC is soft on large businesses" http://t.co/El8WRzHxIp
This week’s Private Eye states that
Homer [HMRC Chief Executive] insisted to MPs that the judge “found that on all the substantial points our judgement was right”. which he didn’t. If the whole inglorious episode was indeed an endorsement, things are even worse than we thought
I accept that most members of the public will dismiss the whole thing as yet more proof that the Establishment always wins. It’s interesting, however, to compare HMRC’s treatment of Goldman Sachs with their treatment of one of my one man band limited company clients.
In Goldman Sach’s case HMRC let the bank of £20m in interest.
My client paid her company’s £14,600 corporation tax bill a couple of months late and was charged interest of £99. Within a few weeks of being asked to pay the £99 HMRC transferred the collection to iQor Recovery Services Ltd, a private firm of debt collectors.
Nice that HMRC have their priorities correct and, in their own words, isn’t
soft on large businesses
Last week the Sunday Times published an article titled Osborne’s Tax Attack! (on international tax avoidance).
This week they very kindly published a letter highlighting my concerns about the direction the argument is progressing; at the expense of micro, small and medium sized businesses (SMEs).
With all the excitement about multinationals and tax, I thought HMRC had bitten the bullet and named all those who think it’s quite acceptable not to pay UK tax despite selling goods in the UK.
Sadly it isn’t.
HMRC do say though
Most people play by the rules and pay what they owe, but HMRC is cracking down on those who don’t.
So there is hope for 2013!
P.S. I should add that the top tax criminals are all guilty of tax evasion. Tax avoidance, which is what the multinationals practise, is not illegal.
As yet another high street retailer closes the shutters, we have an opportunity to vote on the following
Tax avoidance: fair or foul?
Don’t be put off by the fact that its being run by AccountancyAge or because its only for professionals, it isn’t.
The arguments for and against are put simply by Richard Murphy, the director of Tax Research UK, and Stephen Herring, a tax partner in BDO.
Please vote by clicking here.
It will make a difference.
Well it’s early days yet but the Taxation survey isn’t very supportive of HMRC.
Baker Tilly have written an article in Economia, the ICAEW magazine, which suggests that SMEs are one of the headline groups most guilty of perceived tax abuse according to HMRC’s own figures.
I’m not in a position to assess who “avoids” the most tax, multinationals or SMEs, but I’d be bloody annoyed if my accountant suggested that SMEs were a bigger problem than the multinationals.
A pretty good reason I would suggest to make sure your accountant only acts for SMEs!
Just before Christmas this question was asked in Taxation.
Like most readers, I suspect, I have been intrigued by the ongoing saga of whether companies such as Starbucks, Amazon and Google are paying the “right” amount of tax in the UK. Thinking about this made me wonder whether this strategy might be something that smaller businesses such as my clients might use….should they pay a royalty to a family member, etc?
A few of the comments published this week reveal why in the tax world it’s definitely them and us.
The first problem is to ensure that the payment is treated as tax allowable for the paying entity – if not, there is the risk of creating taxable income for the recipient without a matching reduction in the taxable profits of the business.
HMRC’s increasing sensitivity to convoluted tax planning arrangements, must mean that the advice for business owners would be to remunerate themselves (and their family members) by way of customary, and still tax efficient, salary and/or dividend payments where possible.
Setting up an overseas entity such as a British Virgin Isles company is expensive (these low-tax jurisdictions are well aware of their appeal and will charge accordingly)
I have added this post to my other blog
Only the little people pay taxes
Hopefully, it will make paying this month’s Self Assessment tax just that little bit easier.
The Midland in Morecambe is described as
curving gracefully along the North West coast. Sleek, unique, it isn’t just any hotel. It’s a hotel with history, a hotel with a past, an internationally renowned Art-Deco classic. Today, Morecambe’s modernist masterpiece has regained its rightful place as the crowning glory of the North West coast. Now lovingly restored and taken right into the 21st Century, it’s a modern day masterpiece, inside and out. Seaside chic is back in style.
which makes me wonder why in these days of public sector cost-cutting has HMRC hired the Midland for its Morecambe Business & Employer Event?
If it wants to provide a ““friendly and relaxed”” for people who are setting up in business for the first time I’m certain they can find a cheaper venue.
As more and more is revealed about the “unwillingness” of multinationals to pay tax anywhere in the world, who better to be Tax Rat of the Month than Eric Schmidt, who has overseen Google avoid $2 billion of tax worldwide in 2011.
Not satisfied with that in itself, he announced
I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate. It’s called capitalism.
No Eric, it’s not capitalism – it’s operating with a completely different set of rules to the vast majority of other businesses.