Finally, what they\’re complaining about:
At 3.30pm we gathered on Oxford Street and moved toward a new tax-dodging target, Fortnum & Mason, to stage an occupation. This foodstore is owned by Whittington Investments, which runs a devious tax avoidance scheme, stuffing money in Luxembourg and avoiding £10m a year in tax. This money could pay for about 500 nurses.
Still entirely missing the point that Wittington itself is 79.2% owned by a charity, the Garfield Weston Foundation, which donates £40 million a year to good causes.
Health £
The Royal Marsden Cancer
Campaign London 1,000,000
Cancer Research UK London 500,000
The Forever Friends Appeal Bath 250,000
Stroke Association London 150,000*
Birmingham Children’s
Hospital NHS Trust Birmingham 100,000
The Liver Group Charity London 100,000
University of Dundee Dundee 100,000
Moonstone Therapy Centre
Appeal Bristol 100,000
Kids Kidney Research London 100,000
Best Beginnings London 100,000
Motor Neurone Disease
Association Northampton 100,000
Thrombosis Research
Institute London 100,000
Bowel & Cancer Research London 56,000
Alzheimer’s Society London 50,000
British Liver Trust Ringwood 50,000
Rainbows Children’s
Hospice, Loughborough Loughborough 50,000
Royal Surrey County Hospital
NHS Trust Guildford 50,000
Changing Faces London 50,000
The National Autistic Society London 50,000
East Anglia’s Children’s
Hospices (EACH) Cambridge 50,000
Melanoma Focus Chalfont St.
Giles 50,000
Treetops Hospice Trust Risley 30,000
Helen Rollason Cancer
Charity Chelsmford 30,000
Foundation for the Study of
Infant Deaths (FSID) London 25,000
Teenage Cancer Trust Cambridge 25,000
Aspire Stanmore 25,000
Tropical Health & Education
Trust (THET) London 25,000
Headway – The Brain Injury
Association Nottingham 25,000
Starlight Children’s
Foundation London 25,000
Jo’s Trust London 25,000
Willow Foundation Hatfield 25,000
Autism Treatment Trust Edinburgh 25,000
Buddy Bear Trust Dungannon 25,000
British Nutrition Foundation London 20,696
Muscular Dystrophy
Campaign London 20,000
St Andrew’s Hospice
(Lanarkshire) Airdrie 20,000
CancerCare North Lancashire
& South Lakeland Lancaster 20,000
Rainbow Trust Children’s
Charity Leatherhead 20,000
Cued Speech Association UK Dartmouth 20,000
Research Autism Bristol 20,000
SANE London 20,000
St Luke’s Hospice Plymouth 20,000
Action Cancer Belfast 20,000
Allergy UK Swanley 20,000
Cretins.
It’s apparently a tax avoidance scheme so devious that they’re unable to articulate how it works or provide any further details about it.
They couldn’t have got this one wrong as well, could they?
Good research!
But the bastards pay directly to worthy causes. What are the useless sections of the public sector to do?
I wonder what the loss to the taxpayer of the violence was? I am willing to bet that it exceeded the £10 million that they were complaining about. All of the losses that companies suffered will be tax deductible one way or another.
What Serf said – It’s private charity so they don’t like it. If the State was doling out the cash , after taking their cut of course, they’d be quite happy.
I’d reserve judgement a bit.
it’s possible that a tax advisor could say something like: if you turn yourself into a charitable trust and make £x minimum quantity of donations to good causes you will be able to avoid £X of tax and make yourself £y better off.
in which case, one would still observe £x of donations and be able to write the above blog post. £40m of donations does not strike me as very much for somebody who owns 50% of AB Foods, Primark, Heals …
you know I agree with much of what you say about ukuncut – in short, they spout a lot of rubbish – but nevertheless it is perfectly sensible to object to the existence of elaborate legal tax avoidance schemes, you know very well there is a large industry of lawyers and accountants cooking them up, and it’s perfectly possible some of these schemes entail taking on charitable status.
ukuncut give every impression of failing to understand, and showing no interest in, the legal constraints the government operates under, and appear to think that either companies are going to voluntarily decide to pay more tax or that that the government can easily force them to do so. A more realistic objective would simply be better drafted laws and more aggressive enforcement over them – that might not be your cup of tea, but it’s a coherent position worth campaigning for.
I know there is a debate to be had about the wisdom of corporation tax – these arguments are of a long-run nature, and not as strong as you imagine – in the mean time, rich people who own companies that exploit legal loopholes to dodge tax mean that the tax burden on the rest of us is higher than it would otherwise be.
“Luis Enrique // Mar 28, 2011 at 11:31 am
it’s possible that a tax advisor could say something like: if you turn yourself into a charitable trust and make £x minimum quantity of donations to good causes you will be able to avoid £X of tax and make yourself £y better off.”
Doesn’t apply here. The Garfield Weston Foundation was a bona fide charitable institution set up by a Canadian businessman with the same philanthropic intent as similar foundations set up by successful US businessmen.
See here:
http://en.wikipedia.org/wiki/List_of_wealthiest_foundations
Luis: Firstly, if UK Uncut have a problem with an organisation’s tax structuring then they must at least point out what that problem is. If they can’t do that then they should exit stage left on the double.
Re: “mean that the tax burden on the rest of us is higher than it would otherwise be”
Sadly I doubt it. They would simply grab that much more. The only argument that can convince government to lower tax rates appears to be Laffer’s. That they should simply leave money with those who have earn’t it seldom occurs.
I suspect that the “devious” tax structure is that Wittington investments holds its interest in De Bijenkorf (a Dutch retailer) through Luxembourg, which hardly saves any corporation tax because the Dutch company wouldn’t trigger any CFC charges, although it might cut UK stamp duty and UK capital gains charges if the shares are ever sold.
Alex,
thanks for the info: that is what I would like to pin down.
This money could pay for about 500 nurses.
They pick their examples well! Looking at the list of good causes, we could hazard to suggest that the Foundation probably already pays for about ten times that number.
Oh, yeah, see what you did there. I thought the list implied that they were a health-only foundation…
UkUncut, if they had any sense, would be protesting outside the treasury for it is them that set the rules. Unfortunately they’re just opportunistic arseholes.
Typical for labour to have done fuck all for 13 years and then make a fuss when the alternative have been in 10 months…
I suspect the target was chosen for no other reason than it was a posh shop used by posh people. The Extreme Left don’t need much more reason than that.
in the mean time, rich people who own companies that exploit legal loopholes to dodge tax mean that the tax burden on the rest of us is higher than it would otherwise be
On the other hand, the reason most of those loopholes exist is that the government thinks that the tax break is better for society in some way, eg R&D breaks to encourage innovation, charitable tax breaks to encourage a diverse civil society, business tax breaks to encourage investment in marginal electorates, and what not. (Okay, the duty-free goods is probably just really a perk for MPs who travel more than the average bod). Government might be wrong in their analysis of the good effects of any one of the tax breaks, but the good citizens engaged in tax planning are, in these cases, responding to the incentives created by their democratically-elected parliament about how they should be spending their money. While our tax burden might be higher than otherwise because of our loopholes, the government of the day does think that we are all better off if those loopholes exist than if they don’t.
So basically, in criticising tax avoidance, UKuncut is saying that companies should ignore the democratic will of the people of the society they live in.
(Occasionally a legal loophole is found that surprises the tax department. Then a budget comes along, the call goes out for any savings to be found, the tax department proposes eliminating said loophole, the minister goes “well that’s an easy win, tick”. )
Their nurses are very cheap at £20K per annum (500 nurses = £10 million). Nurses earn more than that, even before you factor in the other costs of employing them.
Tracy W
I understand that the tax code includes much designed to encourage certain things.
I don’t imagine that all those lawyers, accountants and other forms of tax advisor exist merely to help companies claim straightforward tax allowances in the manner intended by our democratic representatives. How many lawyers do you need to say “well, you’ve done some R&D, so you can claim that back” or “well, you are a charity, so you don’t need to pay this tax”
Luis Enrique, of course not. They exist to help companies claim complex tax allowances in the manner stated by our democratic representatives. If you want them to claim only straightward tax allowances, then the democratic government should be only providing straightforward options.
And I note that the point of an R&D tax allowance is to incentivise more R&D. If all an R&D tax allowance did was to give money to people who were doing R&D anyway, it would be a waste of time and money, as pointless as paying people to keep breathing. Ditto for charity tax breaks. So that lawyers and accountants are not just saying “you can claim that back” is part of what society wants.
Furthermore, you say “manner intended”, as opposed to “manner stated”. I think that in any decent society, we should not be expected to engage in advanced mind-reading as to what our politicans intended when passing laws. It’s hard enough figuring out what they intend when electing them in the first place.
If there is a difference of opinion over what the governments meant when stating something we have the court system to sort things out, and if that doesn’t do the trick then the government of the day can always step in and pass another law.
Tracy
yes, I also understand the ‘more’ point … so is your position really that tax advisory industry is merely in the benign business of helping companies understand complicated tax rules?
do you read this, for example:
http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=3&hp=&pagewanted=all
and think, nothing to worry about there, apart from overly complicated taxes?
Luis
a practical point…you tell your tax advisor that you intend to invest £xm next year. Tax advisor says, if you bring that forward to this year, you will save £ym in tax because of forthcoming changes in legislation.
Among other things, that is what the tax advisor does.
What next, targeting help the aged shops? Salvation army? Scope? Comic releif?
Seriously, tell us this avoidance trick!
…….in the mean time, rich people who own companies that exploit legal loopholes to dodge tax mean that the tax burden on the rest of us is higher than it would otherwise be…….
Alternatively, if it were not for tax dodgers, there is a chance that the bastards would set tax rates at 100%. The trick is to have enough of them to keep the government on the straight and narrow, but not so many that the tax loss is too high.
Luis:
that tax advisory industry is merely in the benign business of helping companies understand complicated tax rules?
Indeed not. I think that complicated tax rules waste vast amounts of money as people spend their time trying to understand and work out how best to apply them, and thus this is actually a bad industry. I however attribute the existance of this industry to government introducing complex tax rules, in large part because of all the people who think that they know better than you how to manage your own money. (I am aware that some accountants enjoy their work for its own sake, but not I think enough to justify complex tax laws on that basis alone, there are some parts of tax law that I think are always doomed to be complex, eg international transfer pricing ,and they strike me as sufficient to absorb the real eggheads all by themselves).
The General Electric story illustrates why I think “overly complicated taxes” are ample enough to worry about in and of themselves. I disagree therefore with your use of the word “just”.
(I note that part of their failure to pay US tax is because they’ve left money overseas, which means that their US shareholders don’t get any benefit from said money, which is a self-limiting issue).
The problem of tax avoidance also illustrates a general problem with government, that small organised groups, such as companies, have an incentive to lobby for government policies that are basically a transfer of small amounts of money individually from all taxpayers but are large for each lobbyist. But this is not just a problem for companies, trade unions, associations of retirees, charities, public servants, scientists, all engage in such lobbying. And it’s not just a problem for tax, other ways of transferring wealth are by subsidies, or by regulation (eg obliging everyone to buy your x). What we need is institutional bias against such transfers, and a general attitude bias against government meddling, not this ad-hoc after-the-fact complaints about companies doing what government intended them to do.
Luis:
Maybe I’m late to the party but I don’t see what taxes or tax laws have to do with the matter in any case.
To me, “occupation” sounds like riot or something closely related. Police are supposed to prevent (especially when there’s been advance warning) but, if not, there are specialists (Blackwater comes to mind).
Luis
. £40m of donations does not strike me as very much for somebody who owns 50% of AB Foods, Primark, Heals
look at the accounts page 17: http://www.garfieldweston.org/report/2009Report.pdf
dividends and interest received £38.8m
grants paid out £36.9m
Remember that although they own all those shares, their cash income is only dividends from those shares, not a share of profits.