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David And The No-Tax Goliaths

Freemont Group
01 November, 2013

The UK government is boldly engaged in an epic battle against tax avoiders. And other large evil mythological monsters.

It started when David Cameron publicly declared that companies like Starbucks should: “wake up and smell the coffee” (and a bombardment of other populist rhetoric by him and his Lords of War).

A new day has dawned. And the UK will be rid of tax avoidance quicker than the Falklands were of Tango.

Or perhaps…


The Road To Tax Haven Is Paved With Good Intentions

But dear reader. What are the facts?

There are some very mixed signals coming from Ground Zero, to say the least.

First of all we have the Treasury’s push to make the UK tax regime attractive for investors. Britain’s corporation tax rate is due to fall to 20 per cent by 2015, from 28 per cent in 2010. Several other recently introduced measures will allow businesses to make further savings.

Next to that, the tension is mounting within the European Union about what is referred to as the ‘Patent Box scheme’. This scheme gives corporate tax breaks to companies filing patents in the country. And patent filing has increased as has inward investment. This at the “expense” of the European neighbors, with Germany in particular being “Nicht Amused”.

Last but not least, we have the pin-up-girl-of-anti-tax-avoidance Margaret Hodge. She is the one who bravely stood up in public against big (law abiding) Satanist multinational corporations on behalf of the UK Tax Payers and the subjectively inflated abstraction known as the common good. The fair maiden.

But as it turns out, Lady Hodge’s father Hans Oppenheimer founded Stemcor, a multi billion pound international steel company that is managed by her brother and in which Lady Hodge has a “registrable shareholding”.

Analysis of Stemcor’s latest accounts show that it paid tax of just £163,000 on revenues of more than £2.1bn in 2011 (0,01%) and only 2.7% of the worldwide tax burden was paid at home for this proud “British” company.

Another public relations setback came when a tax expert advising HM Revenue & Customs on its newly enacted general anti-abuse rule was filmed describing ways to keep money “out of the chancellor’s grubby mitts”.

Add to this fact that most well known tax havens are British Overseas Territories and perhaps David Cameron and his pack of barking and foaming tax sniffing hunting dogs should become the new definition of “hypocrite” in the 2013 edition of the prestigious Oxford dictionary.


Your Majesty. What is the verdict?

Now, apparently there are elements in the UK government that do understand that lowering taxes is good for business. When MP’s like Margaret Hodge are gently – but firmly – sailed down the Thames for her tax free retirement on a much needed tropical adventure, “God save the Queen” will one day proudly sound again.

As far as David Cameron is concerned. We have tried to talk some sense into him as far as his populist tax rhetoric is concerned. Unfortunately he did not accept our invitation for a nice cup of Arabian tea and fresh dates. Maybe he is too busy with what Margaret Thatcher would call “spending other people’s money…”

And now for something completely different…



About the Author


Freemont Group

Freemont Group is a comprehensive provider of fiduciary services, including corporate formation and administration, trust, fund formation, legal-and tax services. Contact: info@freemontgroup.com

 

 

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