Hugo Swire’s tax affairs

“This week The Express and Echo went to East Devon MP Hugo Swire requesting answers to four questions sent out to each of the four MPs in the paper’s patch.

The questions put to the four Devon MPs were:

1. Have you used a tax haven, tax incentive or deliberate means of avoiding tax in the past to your knowledge?

2. To the best of your knowledge has anyone in your immediate family?

3. Have you ever benefited from any offshore investments?

4. Are you prepared to publish your tax return?

5. What are your thoughts on the PM and Chancellor’s connections to the tax havens in Panama?

Mr Swire chose not to answer the questions but instead asked us to print the following letter.”

“This media feeding frenzy is distasteful

I have found this media feeding frenzy around the personal tax affairs of the Prime Minister somewhat distasteful, writes East Devon MP Hugo Swire.

What exactly is the accusation? Has our PM done anything illegal? No. Immoral? I don’t think so. He has benefited from his late father’s will.

Is this not one of the most fundamental of human instincts, to help your children, whatever your income bracket? Was he even responsible for his father’s investments? Hardly. Yes, he did benefit from his father’s estate and yes it transpires that some of that money came from a perfectly legal overseas investment vehicle. Knowing the PM as I do, his entire approach to these ‘revelations’ will have been to protect his late father, his family (who have not chosen to be in the public eye) and importantly his widowed mother who is very much alive. We can all debate as to what he should have said and when but I think most of us would have had similar instincts.

Besides people who live in glass houses should be careful about throwing stones. When Shadow Chancellor John McDonnell called on the PM to answer if he had “benefitted directly or indirectly” from offshore funds he might have forgotten that £14,000 of his own pension, which he gets a year from his Westminster City Council, was in 2014 invested with Longview, an active global equity manager, that is based, yes, you have guessed it, offshore in Guernsey. McDonnell has been quoted as saying: “There has been one rule for the rich and another for the rest of us,” which is a bit rich coming from him!

Now as a reaction – I would argue an overreaction – the PM has published his Tax Return, and the Chancellor has followed suit. I think this creates a difficult precedent. Is this the moment that people with private means, self made or otherwise, turn their backs on public life? And where does it stop? Do we finally get to see the tax returns of local councillors, BBC presenters, doctors even, after all they are funded by the taxpayer as well? And while we are at it why don’t we demand to see the tax affairs of those who influence public life, journalists, multi millionaire newspaper editors like Paul Dacre of the Mail, and newspaper proprietors like the Barclay brothers and Lord Rothermere.

The hypocrisy of the Guardian, the BBC and the Mirror Group (owners of the Express & Echo) is also worth noting, all of whom have used elaborate measures to minimise their tax liabilities, as have the unions. Can we see their tax returns? If we are going to have them then let’s have them all. And then no doubt in a sanctimonious way we can all condemn those with an income or savings or investments worth over a certain amount and ‘celebrate’ those who earn far less.

Because the logical extension of this argument is that by definition there is something wrong with the rich. Why don’t we conveniently forget – as some do – that the richest 1 per cent in Britain today pay 27 per cent of all income tax, while the top 10 per cent pay well over half, at 55 per cent. Without their effort and enterprise of course, a huge burden would fall on the 12 percent of workers who pay no income tax at all, while the welfare state would collapse.

But let’s anyway smash the wealth creators who employ us all and fund our public services. Let’s drop this terrible idea that we want to give a leg up in life to our children after we die and take away a key driving force of wealth creation. Let’s all join Momentum and ride with the hounds of class warfare and demonstrate against globalisation, GM crops and Trident while we are at it. Let’s make sure that the likes of Jeremy Corbyn achieve the highest office in the land and squander all our hard earned cash. Wouldn’t we all feel smug and so much better as a result?”

http://www.exeterexpressandecho.co.uk/8203-letter-East-Devon-MP-Hugo-Swire-response/story-29105022-detail/story.html

So, Hugo, back to the four questions ….

There truly is one law for the rich and another for the poor

“David Cameron was confronted in the Commons on Wednesday with figures showing that thousands more government inspectors are employed to tackle benefits fraud than deal with tax evasion by the wealthiest UK residents.

Angus Robertson, the Scottish National Party’s leader in Westminster, asked the prime minister why 3,250 department of work and pensions (DWP) staff have been assigned to investigate welfare fraud, while 300 specialise in dealing with the rich.

“Surely we should care equally about people abusing the tax system and those abusing the benefit system?” Robertson asked during prime minister’s questions. “Why has this government had ten times more staff dealing often with the poorest in society abusing benefits than with the super-rich evading their taxes?”

In fact the government confirmed on Wednesday that the ranks of DWP benefits investigators have swelled to 3,700 – a higher number than the one quoted by Robertson, and up from 2,600 in February last year.

That compares with 700 people who work at HM Revenue and Customs in the two units whose job it is to investigate the wealthiest 500,000 people living in the UK.

David Cameron was jeered when he admitted the figures cited by Robertson would need to be examined, but retorted “they sound to me entirely bogus”. He added: “The predominant job of the DWP is to make sure that people receive their benefits. The predominant job of HMRC is to make sure people pay their taxes”.

Benefits fraud costs the government £1.3bn a year, according to official statistics, while the gap between tax owed and tax paid is put at £34bn a year by officials.”

http://gu.com/p/4tb4b

“Politicians don’t know the price of milk – but they do know how to set up a shell company”

“… In the old days, courtiers aped the style of the monarch. Modern politicians aspire to be like today’s rulers – our corporate overlords. If you spend a sizeable chunk of your career making sure corporations can take their money offshore, and hope to work for those companies later in your career with some title like Non-Executive Director Of Thanks For All The Favours, and if corporations actively court political influence through massive lobbying operations, then you will end up with a certain level of symbiosis. …

… In the end, as a senior politician having spent a career in what is the PR wing of corporatism, offshore tax arrangements might well be one of the few things you know anything about. I mean that quite literally. Politics is full of people who don’t know the price of a pint of milk but do understand the incorporation of a shell company. Why wouldn’t they have a trust in Panama?

Corporations may hire celebrity spokesmodels, personify themselves as mascots, and in the US, demand that they have the constitutional rights of people, but they are not people. They are blueprints for making money, and they don’t address their social obligations because they don’t care. I suspect before long we’ll see corporations donating to space exploration in the hope that they’ll be able to take advantage of a zero per cent tax rate by screwing their “Company Headquarters” plaques to the surface of the moon. In a decade, it’ll be covered with so much tessellating brass, it’ll shimmer like a distant glitterball through the gaps in the roofs of their employees’ shacks.

http://gu.com/p/4t9n2

“The top is greedy and mean and will always find a way to take care of themselves. They always do”

We are not here in this world to find elegant solutions, pregnant with initiative, or to serve the ways and modes of profitable progress. No, we are here to provide for all those who are weaker and hungrier, more battered and crippled than ourselves. That is our only certain good and great purpose on earth, and if you ask me about those insoluble economic problems that may arise if the top is deprived of their initiative, I would answer ‘To hell with them.’ The top is greedy and mean and will always find a way to take care of themselves. They always do.”

Michael Foot
Speech before the 1983 General Election.

“More than half of MPs want to be able to spend more on their taxpayer-funded credit cards”

“More than half of MPs want to be able to spend more on their taxpayer-funded credit cards, with scores demanding the right to use them to pay for food and drinks.

MPs can currently spend a maximum of £1,000 on a single transaction and a total of £4,000 each month on the credit card.

However, when question by the Independent Parliamentary Standards Authority, as many as 51 per cent of MPs said they wanted looser rules on use of direct payment and charge cards.

Ipsa issues MPs with the cards to pay for a variety of items such as travel, accommodation and stationery.

The politicians then have to prove the spending was allowed within the month, or they build up debts to the watchdog.

The sums are recouped by suspending the cards and not paying out valid expenses claims, or in installments from the MP’s salary.

MPs have said they believe food and drink should to be reintroduced as an allowance on the card and that they should be allowed to use the cards when travelling on public transport in London.

It comes after more than a dozen MPs had their Commons credit cards blocked last month after running up expenses debts of up to £27,000.

Five SNP politicians – including Westminster leader Angus Robertson and his deputy Stewart Hosie – were among those subject to action by the watchdog.

The fresh calls were made in response to a 2015 survey of politicians and their staff by the expenses watchdog, which found that 34 per cent of MPs chose not to submit a claim because they were “concerned about the claim being published”.

Overall, Ipsa received 312 responses, of which 44 were MPs, 113 were MP proxies – nominated to act on behalf of an MP – and 155 members of staff.

The report states: “There are some clear signs that MPs, their proxies, and their staff think that there have been many improvements in the support and services that we offer, but, of course, there remains more for us to do.”

http://www.telegraph.co.uk/news/2016/04/12/more-than-half-of-mps-want-to-be-able-to-spend-more-on-their-tax/

Tory MPs worry that revealing their tax affairs might cause problems for their divorces!

“MPs do not want to publish their tax returns because it could cause problems for those going through a divorce or with a complicated family life, the Telegraph understands.

Senior Conservatives have warned that making politicians publish their tax returns could put some off standing for parliament and force others to quit because of the impact on their personal relationships.

One senior backbench MP told the Telegraph: “You would have to look at some of the implications for family life and I’m thinking of people with step-families or people who might have been involved in complex divorces.

There are lots of things which might become apparent from someones’ tax return which makes it easy to see why people might not want to have that in the public domain.”

A second MP, Mark Garnier, claimed forcing MPs to disclose what they earn and pay in tax could ultimately force other family members to publish their income to avoid money being shifted between partners.

He said: “There are a number of issues; what are you trying to achieve out of publishing tax records that you’re not already achieving through the register of members’ interests?

“If you do want more clarity you’re going to have to look at the family’s tax returns.

“You may well have an MP who basically shovels everything that they want to hide into their partner’s name in order to avoid having to disclose it on their own return, so you then have to ask does it apply to their family too?”

During divorce proceedings where financial remedies are requested by either party partners must provide information about their income and shareholdings.

But some MPs are concerned that final settlements made as a result, how much they pay to former partners and their total income could be disclosed and used against them if forced to reveal their income and tax affairs.”

http://www.telegraph.co.uk/news/2016/04/12/mps-fear-tax-transparency-could-spell-trouble-for-family-life/

Ex-Leader and Tory MP William Hague tells us how we should deal with the Panama papers

To extend transparency in careful stages”

Evening Standard, Quote of the Day

Careful for whom? So careful that nothing changes, perhaps, Mr Hague?

Bet your tax returns are interesting …

Osborne’s family firm has paid no corporation tax for seven years

Today’s Sunday Times front page:

George Osborne has shares in a £335,000 dividend payout from his family’s wallpaper business – even though it has not paid corporation tax for the past seven years.”

It has avoided paying the tax “partly because it has rolled over losses from previous years and has deferred tax payments“.

The company made a profit of £772,000 on turnover of £34,000,000.

Sidmouth (non?) Conservative Club, a tax protest and Swire’s take on it all

The photograph below is taken at Independent Councillor Claire Wright’s demonstration on fat cat tax avoidance outside (on the public pavement) the Sidmouth Conservative Club, which until recently had a rather scruffy and spider-infested pic of Hugo Swire on its notice board.

image

Apparently, a person from the club insisted that it is “non political” though it appears in a list of Conservative member clubs

http://www.toryclubs.co.uk/page/website-linkup

and was keen to persuade the protesters to move away from the vicinity of the club when they protested last week.

For Mr Swire’s views on tax evasion and avoidance (which he appears to confuse) see here:

http://www.hugoswire.org.uk/news/blog-tax-evasion-and-avoidance

where he states:

” … Even though companies may avoid paying tax on their profits, they do contribute to the public purse in other ways. Their employees will pay Income Tax and National Insurance, as well as any additional taxes they may occur. In the UK – when you add up VAT, business rates, national insurance contributions, and so on – about 30% of tax revenues come from businesses, of which only eight per cent comes from corporation tax. …”

So, that’s ok then. As long as WE pay our 20-40 % taxes and pay 20% VAT when we spend what’s left, the mega-companies that employ us (which should pay 20% corporation tax) can happily 3-4% max! If we tried that we would be given hefty fines or prison sentences!

Reminds Owl of tales of the old British Empire where, in Africa, people got paid by mine companies – and could only spend the money in mine company owned shops!

HMRC avoids giving real numbers when talking abouttax avoidance!

” … In [the HMRC] annual report, we see a “cash collected” figure, but this includes cash not yet received, not all of which will be collected. Confused? You’re meant to be.

We all know “lies, damned lies and statistics” We should all celebrate, as most of us in this country have the above-average number of legs: some folk have one leg, but nobody has three, so we bipeds are “above average” – see?

HMRC doesn’t report on the scale of aggressive tax avoidance. They don’t want stats to show how shoddy they are. But it does trumpet the numbers of prosecutions for evasion. HMRC chose a random figure of 1,000 a year. And then beat that number of prosecutions. Yippee. But we’re dealing with a taxpaying population of about 30 million. HMRC puts the figure of the “shadow economy” at 10% of our total tax received. So, aiming to prosecute 1,000 people really is less than useless… …”

http://www.theguardian.com/commentisfree/2016/feb/07/hmrc-tax-avoidance-dispatches-greg-wise-channel-4

The full report will be on”Dispatches”, Challel 4, 8pm tomorrow

Fat cats get fatter

“Ministers have come under fire after it emerged an Amazon boss has been appointed to the board of a key Government department.

The appointment has caused further anger over the Government’s record on collecting tax from multi-nationals after it was revealed last year that Amazon paid just £11.9 million to the UK taxman despite sales of £5.3 billion in 2014.

Doug Gurr, president of Amazon China, is expected to be announced as a new non-executive director of the department’s board next week, the latest in a growing number of business leaders appointed to the boards of government departments. …

… Other prominent business leaders on Whitehall department boards are Ian Davis, chairman of Rolls-Royce and Dalton Philips, the former boss of Morrisons and Sir Ian Cheshire, the newly-appointed chairman of Debenhams. …
… It emerged over the weekend that Facebook paid just £86million to all tax authorities outside the United States in 2014, despite declaring profits of more than £2.4billion – which suggests the firm paid a tax rate of just 4 per cent.

But its latest accounts filed to the US Treasury revealed it is reserving a $2.46billion (£1.7billion) fund for ‘uncertain tax positions’ – relating to tax investigations in a range of countries, including the US and Ireland, but not the UK, according to The Times.

The liability fund is more than double the £800million it set aside last year.

Thousands of ordinary British taxpayers, who do not have the luxury of setting aside millions of pounds to settle tax disputes, will start receiving fixed-penalty notices in the coming weeks.

The fees are expected to raise up to £90million for HMRC this year.
The penalties are issued to taxpayers who missed the deadline for submitting their self-assessment on January 31 and apply even if no tax is due.
If they are unpaid after three months, the penalty increase by £10 for every day they remain unpaid, up to a maximum of £900.”

http://www.dailymail.co.uk/news/article-3429766/Amazon-boss-appointed-Department-Work-Pensions-board.html

Claire Wright’s speech on tax avoidance yesterday

“Before I begin I have a small announcement to make.

If you have got trouble paying your tax bill, don’t worry … I’ve had a word with George and said to just give him a call and he will do a deal with you. You might even get three per cent!

So, despite the public outrage, Cameron and Osborne STILL think that a three per cent tax deal from Google after a six year investigation is a “major success!”

What do we think about that?!

And despite our government lobbying the EU to PROTECT tax havens, ministers still insist that this country is leading the way in clamping down on corporation tax avoidance!!

What do we think about that?!

And despite HMRC getting a pasting last November by the public accounts committee for its record on tax avoidance, the Conservative government STILL insists that it’s doing a great job on getting companies to pay up!

Over the weekend news broke that six large companies, including AstraZeneca and Shell, have COMPLETELY avoided paying tax in the UK!

Using tax expert, Richard Murphy’s figures we have estimated that Devon could lose around £380m every year to corporation tax avoidance.

£380m is twice the adult social care budget and 22 times the children’s care budget. Effectively, it is equivalent to around an extra £500 for every person living in the Devon County Council area.

That’s money that could be spent on our schools, our hospitals, children’s services and the elderly. All these services are horribly underfunded and horribly under pressure.

Over the past five years £174m has been shaved off Devon County Council’s budgets. We have seen the closure of care homes, youth centres, children’s homes, bus cuts, highways related cuts.

But things are about to get worse. On 10 February (we think) MPs will vote on yet more massive council funding cuts. Devon County Council is set to lose around £28m. This will mean the axing of school crossing patrols, the arts and a raft of other cuts. The social care budget is so under pressure that its scrutiny chairman said last week that the risks of the budget cuts are “massive.”

So this demonstration is aimed at both drawing Mr Swire’s attention to the modern day scourge that is tax avoidance AND also to the forthcoming vote in the House of Commons and how important it is for him speak and vote against it.

And Devon County Council has already urged Devon MPs to vote against the funding cuts.

Mr Swire is a Foreign Office minister for the Commonwealth and responsible for economic and commercial diplomacy, and so in a sound position to press for action on this issue.

I wrote to him about this a few weeks ago but the only reply I received stated that the email was being forwarded to the treasury minister, David Gauke.

This is all very well, but I think we want to know what MR SWIRE himself is doing about corporate tax avoidance – and where he stands on next week’s council funding cuts vote!

Otherwise some of us might start to wonder whether a more appropriate title for him should be Minister for Tax Havens!!

I organised this demonstration BEFORE the Google scandal kicked off, but I am absolutely delighted that it has prompted this issue to dominate the news agenda. The white light of public scrutiny is the ONLY way that we will ever see the rules change on this.

One last thing this is a protest demonstration and we need to demand action verbally as well as visually.

How about:

Hugo Swire: No ifs, no buts, vote AGAINST the council cuts!”

Grubby politics (and power) – 2

David Cameron and the Tories have links to the very top of Google going back decades.

The Prime Minister has enjoyed a special relationship with former Google CEO Eric Schmidt, who made billions making the business into a global powerhouse.

For years Mr Schmidt was on Mr Cameron’s business advisory board, which is used as a ‘sounding board’ on business matters, but the Google executive left in July.

The billionaire has reportedly also offered Mr Cameron on economic policy.
The links do not end there because Steve Hilton, once the Prime Minister’s closest political adviser, is married to Rachel Whetstone, who was vice-president of global communications at Google until last year before she moved to Uber.

Rachel Whetstone is a former No 10 aide and was Michael Howard’s director of communications when he was Tory leader and Mr Cameron is godfather to her younger son.

Mr Hilton was godfather to Ivan Cameron, the late eldest child of David and Samantha.m

… In 2006, Mr Cameron travelled from visiting Google in Silicon Valley to Bournemouth to address the Conservative Party conference.

Then in 2010 when Cameron announced a review of Britain’s intellectual property laws as the founders of Google have said they could never have started their company in Britain’.

In 2012 it emerged that Tory ministers held meetings with Google an average of once a month. Official records show that David Cameron met Google executives three times and Chancellor George Osborne four times.
Google has held five meetings with the UK government over the past two years to discuss launching driverless cars in Britain.

It is not just a case of former government policy staff exiting through Westminster’s ‘revolving door’ to Google – it works the other way too.
Tim Chatwin was Mr Cameron’s head of strategic communications and had worked closely with Mr Hilton since the start of the Cameron modernisation project. He joined Google after the 2012 Tory conference.

Amy Fisher was once Google’s PR chief for European affairs and later bagged a job advising then Justice Secretary Chris Grayling.

Labour shadow chancellor John McDonnell today wrote to George Osborne demanding more information on Google’s tax bill.
In his letter he said that there are eight questions he must answer:

Firstly, please can you clarify exactly when you were first made aware of the details of the deal with Google? Did you (or any other Treasury Minister) personally sign it off, and were other Ministers involved in the settlement?

What discussions, if any, did you or members of your private office have with HMRC and with Google representatives about the deal?

Did HM Treasury and HMRC discuss details of the deal with Number 10 before the announcement was made?

What is HMRC’s understanding of the effective tax rate faced by Google over the past 10 years as a result of this settlement?

Are you confident that this deal will not undermine international co-operation on tax avoidance, such as the OECD base erosion and profit shifting scheme?

Can you clarify whether Google is changing the company structures that enabled this avoidance to take place over the past decade?

What concerns, if any, do you have that this agreement creates a precedent for future deals with other large technology corporations?

To help ensure HMRC is best placed to address complex issues like this will you now halt the programme of HMRC staffing cuts?

http://www.dailymail.co.uk/news/article-3418036/The-incredibly-close-links-Google-Downing-Street-decades.html

Grubby politics

“A company which is one of the Conservative party’s largest donors paid no corporation tax for three years and could be dissolved by Companies House for failing to file accounts.

Lycamobile, an international firm that sells foreign mobile calls, gave the Tories £136,180 in the current quarter and £40,000 in the quarter before that, making the company the Tories’ third biggest donor over this period.

But the latest available figures show the company did not pay any tax between 2008 and 2010 despite generating a turnover of between £47m and £88m.

This year’s accounts are so late that last month Companies House announced they might “dissolve” the company, striking them off their register and forcing them to cease trading. At the end of March Lycamobile persuaded the regulator to suspend the moves. …

…The latest available accounts for [its] Portuguese division show it had just four employees, despite reporting £433m of turnover. Two of those employees, Richard and Filomena Benn, run a Madeira-based company that specialises in “tax planning”.

… The firm’s most recent accounts also show that auditors KPMG were not able to obtain enough information to sign off on adjustments made to financial information from previous years.

KPMG began auditing the firm after EY resigned from the duty in 2014. …”

http://www.theguardian.com/business/2016/jan/26/tory-party-donor-lycamobile-uk-company-register

How long before the CEO gets a knighthood?