I do always find it so amusing when people start whining about the tax system in the UK. Because it is within those whines that we gain the knowledge of how badly they misunderstand the tax system in the UK. You know, that very one they’re whining about. So it is with Julian Richer here and his idea for Taxwatch, a thinklittle tank sorta plan.
The founder of Richer Sounds, the hi-fi chain, has taken aim at Sir Philip Green, saying that he plans to bankroll a new watchdog to expose people and companies that avoid paying tax.
Julian Richer said that he was launching Taxwatch to help to fix Britain’s “broken” tax system, having become exasperated at the different ways in which people avoid paying their bills. The not-for-profit venture will involve journalists and tax experts working together to expose abuses of the system.
I think we can guess which journalists and “experts” are going to be part of this. And we can certainly see the sort of misunderstandings there are going to be:
Mr Richer, who was drafted in by Marks & Spencer recently to advise on workplace culture, said that he reserved a special anger for “people who think it’s funny and clever not to pay tax”. Speaking to The Sunday Times, he singled out the Topshop owner, saying: “Who takes Philip Green’s stock from his warehouse to his shops? They’re carried on the roads. Who pays for the roads? We do.”
What pays for the roads? What very much more than pays for the roads actually? Vehicle excise duty and fuel duty. They raise tens of billions more than are spent upon the roads after all. And are any of us aware of any manner in which Topshop, or any other part of Arcadia, have any special deal upon VED or Fuel duty? No, none of us do know that because they don’t have any special deal.
Oh, and there’s more. Arcadia pays UK corporation tax just like every other company. There’s no deal in place there either. Profits made by doing business in the UK are taxed at the full and correct rate for doing business in the UK.
It gets even worse than this. Sir Philip doesn’t fact own Arcadia. His wife does, through Taveta. Yes, amazingly, the economic emancipation of women has taken place. So, after Arcadia has paid all of the excise and fuel duties that exist, thus paying for the roads, and also all the corporation tax due on profits, then and only then dividends are paid to Lady Green. Who doesn’t live in Britain, was not born here, is not resident nor domiciled here, and therefore is not covered by the UK tax system.
On the entirely reasonable basis that we don’t tax foreigners living in foreign. We do tax – as corporation tax – profits they make doing business here but their own, personal, tax dues are the responsibility of the foreign places they reside. Something about this pesky sovereign nation stuff no doubt.
Right, so Julian Richer, someone so wrong about tax as to have repeated all of this drivel, is going to set up a watchdog to shout about those who don’t pay the right amount of tax, is he?
That’s gonna be fun.
The Times also gets it howlingly wrong:
Sir Philip, who lives in Monaco, has faced scrutiny over his tax affairs and the tax liabilities of his Arcadia retail empire, the parent company of Topshop, Burton and Dorothy Perkins. He faced claims in 2005 that he had cut Arcadia’s UK tax liabilities by paying a £1.2 billion dividend to his wife, Lady Green, who also lives in Monaco.
He’s actually tax resident in the UK. And there’s just no manner at all in which Arcadia’s tax liabilities were changed in the slightest by the payment of a dividend. Dividends are paid out of post-corporation tax profits.
However, there is one massive and great joy about all of this. The Senior Lecturer at Islington Techncial College has, for some years now, been trying to promote the Fair Tax Mark. Come to us, pay a fee, we’ll give you a badge stating that you pay all your taxes like a good little laddie. You know, over and above the one you get when HMRC doesn’t sue you for unpaid tax. And one of the very few people to have paid for the Fair Tax Mark is Richer Sounds. The boss of which, Julian, has obviously got bored with its ineffectiveness and decided to replace the Great Tuber’s progeny.
Oh well, that’s fun at least, isn’t it?