Margaret Hodge, who has taken on companies such as Starbucks, Google and Amazon over tax avoidance, said that she had to take on her own relatives after an attempt six years ago to take Stemcor, the steel-trading company founded by her father and run by her brother, offshore. She said: “It would be perfectly legitimate. It’s a global trading company so you could locate it anywhere. But we are not in the business of minimising our tax. So we stayed onshore.”
Ms Hodge, a shareholder in the company, said she had been upset by claims in Westminster that it had avoided corporation tax, adding that they were false. “If anybody is trying to smear me to stop me doing the work I intend to do around tax, I won’t have it,” she said.
If we could just raise the subject of that little trust for your children and grandchildren where your circa £18 million of Stemcor shares are placed.
One of the effects of this structure is that said beneficiaries will not suffer the depredations of inheritance tax at that, hopefully long delayed, moment of your death.
This is, of course, entirely and wholly legal. But that isn’t the current question is it? That is whether this is moral?
Said structure will, from my quite possibly incorrect and very basic calculation, deprive the Revenue of some £7 million.
I personally would not describe this as tax avoidance. It is quite clearly tax compliance, obeying the law of the land in each and every particular. But it does leave us with an interesting point.
It would appear that when a corporation obeys the law of the land in each and every particular that this is immoral. When a Labour MP does so it is moral.
Which is an interesting little philosophical point, isn’t it?