Taxing Matters
A number of well known publications are on the ball when it comes to exposing tax scams that operate in the UK these days - notably Private Eye magazine and, more recently, The Times newspaper.
Here's an interesting article from Private Eye which should give our Parliamentarians some food for thought - maybe they should ask PwC and KMPG for their comments and - depending on their answers - recall these spelndid chaps to the Public Accounts Committee.
"Tax advisers from the 'Big Four' accountancy firms, arraigned before Margaret Hodge MP's public accounts committee last week, were keen to distance themselves from the bad old days of highly contrived tax schemes.
What they do now, impressed PwC's Kevin Nicholson, involves genuine business. "There has to be substance there," he told Lib Dem Ian Swales. "If you have a finance company in Luxembourg, the Cayman Islands or Bermuda, and you haven't got people, the loans and the agreements there, I do not understand how that would work."
Unfortunately for Nicholson, The Eye has visited a number of Luxembourg finance companies at the heart of hundreds of schemes designed by PwC, some reported in Eye 1314. Most of the private companies - including Pearson (FT publisher), Associated British Foods (brands including Ryvita, Ovaltine and Twinings) and Northern & Shell (Richard Desmond's porn TV and daily Express empire) - were located at compant service providers with no employees of the companies (other than the stooge director sort) and nobody who could spek on their behalf. In short, no 'substance' at all.
The MPs might care to check the accountants' assurances against the reality of what their clients do (or rather don't do) in the world's tax havens. They might also wonder how the HM Revenue & Customs polices the beancounters' schemes and what the chairman of its board, Ian Barlow, makes of it. He was head of tax at KPMG in the bad old days selling really contrived tax scheming, such as the five ruses spelt out in Eye 1318, including the 'round the world' trust scheme, and dismissed variously by judges as "entirely artificial", a "tax avoidance strategy" and "acting out a charade".
Alongside Barlow sit former PwC tax partner John Whiting and another KPMG partner, Leslie Ferrar. Just the crew to rein in the beancounters!"
What beats me is that the biggest tax story ever in Scotland - the one involving Rangers Football Club - went completely unoticed for years as far as the Scottish press were concerned.
Which is quite remarkable given that Glasgow is a 'goldfish bowl' - compared to somewhere like London, for example.
Yet the fact that Rangers management embarked on a strategy of making tax free loans to players - instead of paying them proper salaries on which tax and National Insurance was due - was allowed to continue for years completely unchallenged.
