Open letter to Vince Cable on tax avoidance

Dear Mr Cable,

Tax avoidance is an absolutely legal, reasonable and completely appropriate activity.

Tax evasion is an absolutely illegal, unreasonable and completely inappropriate activity.

Perhaps it’s time you learned the difference, or knowing the difference perfectly well stop rabble rousing the uninformed constituency of the general public with the suggestion legal activity is some form of wrongdoing.  Companies operate to make money for their owners and shareholders and the vast majority of them are not corporate giants, but small businesses trying to survive in a bureaucratic, dictatorial and interfering environment.

The real ‘appalling story of tax abuse’ is not the rot you spewed in the media today.  It is the government treating the profits of companies like the government’s own piggy bank, to raid and squander with each passing whim, while enriching your political friends and allies through lavish public subsidy for activities that cost taxpayers even more through their pay packet and higher bills. Companies are not charities that exist for the convenience of government. That is part of the reason so many companies look for every legal method to reduce their tax liability.

Government is responsibile for this state of affairs. Think about that before you run your mouth off in the media in an attempt to demonise companies for acting within the law.  While you are about it, please do us all a favour and get off the backs of those who create the jobs and wealth in this country; wealth that the establishment hoovers up to fund the bloated and wasteful public sector, and your troughing colleagues with their grotesque expensese and gold plated pensions.

Yours sincerely,

AM

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8 Responses to “Open letter to Vince Cable on tax avoidance”


  1. 1 Bill 18/11/2012 at 7:22 pm

    Might as well have sent an open letter to the man in the moon for all the good it will do. Vince Cable is currently a useful idiot for those who deign to rule.
    I take the view that all taxation is theft as none of it is voluntary so take ever possible step to avoid paying it. If those steps mean doing deals in cash then so be it.

  2. 2 wg 18/11/2012 at 7:26 pm

    We’ve had years of increasing tax levels and the results are plain to see.
    Our cities are boarded up wastelands – it is only the giant chains that survive.
    More leeches for the bleeding-to-death patient.

  3. 3 Bellevue 18/11/2012 at 7:46 pm

    If you are referring to Starbucks et al…… you should perhpas mention that this is EU policy, as part of the single market. Companies can choose to be taxed in whichever part of the EU they choose (as N. Farage says, ‘we are all one country…..Europe, now’)
    So this is not a ‘loophole’ that can be closed by HMRC. This is EU diktat…. and there aint nothing we can do about it.
    You should ask Dr North – he knows about these things.

  4. 4 Old Codger 18/11/2012 at 9:07 pm

    I am amazed that those who have shown themselves to be the worst fidlers on the planet, who have rules to enable them to avoid tax in ways the ordinary citizen is denied, castigate organisations and private individuals for using perfectly lawful means of avoiding excessive taxes.

    Nothing honourable about them whatever they may think.

  5. 5 PeterMG 18/11/2012 at 9:10 pm

    The key factor in the Starbucks episode is not so much as has correctly been pointed out that its EU policy that allows them to pay corporation tax in another jurisdiction, but that they are a Franchise operation. This means that each and every shop is owned and operated by small business person who and pays UK corporation Tax. Every cup of coffee is taxed 20% and all the wages of those working there is taxed in the UK and all the employee and employer NI is paid. This amounts to a huge amount of Tax.

    The corporation Tax due by Starbucks is only due on the money they get from royalties, which are possibly paid via the coffee the franchises buy although I’m only guess here. There are many different schemes they could operate. I’m sure if we looked into Amazon and others we would see similar patterns. This has been a piece of grotesque politicking with many of the public unfortunately taken in.

    Yet if we do what Harriet Harman suggested on Question Time it would be all those who tend to vote Labour who would suffer the most. If she had a brain cell it would certainly be very lonely.

    At some point those that do support Labour will wake up and see the light. But just as disappointing was the fact that the others on the panel didn’t have the brain cells to think on their feet and anticipate the question and find some answers.

    As an aside I use Amazon a lot, but most of the books I get come from shops that are not owned by Amazon. Does Harriet Harmon want them put out of business as well?

  6. 6 Andy Baxter 18/11/2012 at 9:43 pm

    As someone who makes a living out of advising people with money on how to legally avoid taxation in all its forms I have some interesting (I hope to readers?) comments and anecdotes to add….

    You are right to highlight that the political class are the problem; as they seek to find ever more ingenious ways to milch ever more from us (we the great unwashed) to fund the largesse and nonsense they are responsible for, whilst pandering to the nepotism and cronyism of vested corporate interests.

    HMRC is in a total mess, not only is it infected at the top by leadership that cosy’s up to vested corporate interests and lets off the ‘Big Boys’ but it’s also in total chaos at the coalface so to speak with morale, lack of training, short staffed and utterly clueless staff navel gazing in between the occasional heavy handed forays into the real world in pursuit what it feels its owed.

    That doesn’t stop it pursuing however the little people for the chump change in comparison with the Big Corporates it feels its owed using tactics that would be more at home from a shady inner city back street loan shark for non-payment of ridiculously small sums! Add to that the countless mistakes, lost paperwork, claims, incompetence and sheer utter ‘computah says NOooo’ attitude of most staff and we have a Government Department simply not fit for purpose.

    It’s not their fault mind you; it is in fact previous and current politician’s tinkering, fidgeting, manipulation and constant cost cutting yet demanding more productivity that has led to huge staff losses and turnover where common sense, knowledge and technical skills and the will to live have been all but lost.

    Its guiding philosophy as a department is and always has been ‘Guilty until proved innocent, so pay up’ with ne’er so much as a ‘please’ or ‘thank you sir’ just a surly demanding demeanour hiding a supressed menacing attitude as the official seeks to meet his target for the day.
    Some interesting stories that are truly incredible if they were not true; from personal experience.

    July 2010 a long term client of mine died, had he lived but for another 17 months there would have been no taxation at all on his estate due to on-going legitimate tax planning I had been advising on for over a decade so that his two middle aged children would inherit the full value of his estate, which was in excess of 7 figures and not lose 40% of it in tax! Being a competent adviser I had foreseen such an eventuality as premature death before fruition of his long term plans and had set up a contingency that would provide insured funds to meet the anticipated tax burden which due to legitimate planning had reduced to less than 7% on his premature demise.

    Sure enough HMRC circled like vultures. Who wouldn’t for an anticipated 40% of a 7 figure sum? I won’t bore readers with the War and Peace version but it took HMRC after meeting after meeting and copy after copy of documents being sent until January 2012 to finally agree that the planning and record keeping and evidence to back the planning was all in order that the 40% sum they initially demanded (and had been adding interest to at over 5% p.a. from January 2011) was not in fact due and that they had to accept the reduced 7% figure. Given I’d already insured this and that the payment of this sum had been made within the 6 months of death by the executor one could be forgiven for thinking that the interest would be waived and that the matter was concluded? Alas no! HMRC had not only lost the 7% payment made by the Executor in January 2011 (I insisted on receipt) they were loath to refund the interest as they were insistent no money had been paid! Alas a very stressful time for the beneficiaries of the estate and needless cost of my time in sorting this out for them due to simple incompetence.

    My personal favourite; client who is a little old dear submits her annual tax return, she is of modest means, some capital that provides additional income left by her late husband that buys the little luxuries of life that her pension and widows pension just cannot stretch to meet. I’ve calculated her tax rebate at a little over the £2,500 mark. She submits her claim and waits, and waits and waits and waits! The claim is chased, no record of the claim, it’s resubmitted by my own hand! I obtain a receipt; guess what its lost again! Fortunately we have a fully-fledged copy all enveloped up just in case and again it’s resubmitted by hand and receipted; no apology just a surly gruff belief it was never submitted despite the receipt!
    She waits and waits and lo and behold calls me one day to say “please come round its urgent I don’t know what to do?” she won’t expand on the telephone the reason for her obvious distress or state of excitement so I duly call to see her.

    She agitatedly thrusts the envelope from HMRC into my hand and is in a visible state of shock. I read the contents and nearly fall over as I’ve not even had time to sit down; HMRC had agreed she was due a rebate and had sent a cheque not for the £2,500 plus I’ve calculated but had somehow got the decimal place incorrect and the cheque was for over £2.5M!! Seriously!!

    She asked “what should I do?” I replied “bank it! Take your £2,500 and see how long it takes them to notice” being old school she felt morally obliged not to and sent the cheque back with a covering letter explaining their error. She waited 6 weeks for reply got a paltry 0.5% interest payment for late rebate and not even a thank you from them.

    Co. Director client settles his corporation tax bill which is in excess of £400,000. HMRC promptly lose all record of the transaction and depsite bank statements proving the payment to the correct HMRC unique ref no and account hound him daily for payment via telephone and site visits to his company office and home address; only by invoking the Police, who were reluctant at first to get involved for harrassment do they actually back off and admit they have a problem and seek to find the money, which miraculously appears!

    I could go on and on…..

  7. 7 Autonomous Mind 18/11/2012 at 10:11 pm

    I had a similar issue Andy. Submitted my VAT payment which was then returned to me in full for reasons passing understanding. So I submitted the VAT payment again and the sum left the company account. Job done. Or so I thought.

    I then started receiving demands and threats for payment which I had already made. I was asked to prove I had paid, so I sent them a copy of the bank statement showing the exact sum being taken on the date I said HMRC had cashed the cheque. Weeks later and they came back and said no such payment was received and they were instructing bailiffs.

    I tried to deal with them by phone and the numbers they gave me were, first, for the wrong office for my region then, second, for an office that had closed. Useless doesn’t come close to describing them.

    So at my own expense I requested a copy of the cashed cheque as evidence it had been received by HMRC. My bank were so annoyed by HMRC when they heard my story they waived my charges and added their own letter confirming payment. Since that happened last year I’ve received neither a confirmation payment has been received nor an apology.

    HMRC is by far the most incompetent department in this omnishambles of a public service and that’s saying something.

  8. 8 gielguddoyle 19/11/2012 at 1:08 pm

    AM

    With regards to companies and departments sending threatening letters when payment of a bill has already been made, it is not the accused that has to prove payment. The company alleging has to set out ‘proof of non-payment’. Threatening someone with legal action or some such without first setting out this proof is a criminal offence and a contravention of the Administration of Justice Act.

    You were not under any obligation to prove anything to HMRC. This information was given to me by Consumer Direct when on many occasions tackling scum bag Energy Companies and their dodgy Recovery Companies sending letters claiming that I hadn’t paid bills.

    Once I had sent my Pro Forma letter by Recorded Delivery threatening them with the case being turned over to the OFT because of their criminal actions, I never heard a single thing from these companies again.

    Remember, it is a criminal and prosecutable offence to threaten Court Action or some such for non-payment without the company setting out ‘proof of non-payment’. The Law is always on the side of the accused in this setting.


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