HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Monday, 28 April 2014

Low Hanging Fruit

The BBC's Panorama reports that Formula 1 boss Bernie Ecclestone has avoided a potential £1.2BN in taxes as a result of a secret deal with HMRC, wherein after a nine year investigation HMRC agreed to accept £10M in 2008.

Panorama's investigation goes back to 1995, when Mr Ecclestone secured ownership of the TV rights of Formula 1.

Shortly afterwards he moved this asset offshore, giving the rights to his then wife, Slavica.
She transferred them to a family trust in Liechtenstein, before selling them for a profit, free of UK tax.

The BBC uses the phrase "tax dodge" but then, in the same sentence, notes that it is legally watertight provided Mr Ecclestone did not set up, or control, the trust.


In a case like this, both HMRC and the taxpayer's lawyers will have arguments/justifications that back up their respective positions. However, at some stage a decision has to be made (by both parties) as to whether the costs of pursuing the case outweigh the costs of coming to a settlement.

Sadly, for those of us without a phalanx of lawyers and deep pockets such "negotiations" never occur. Low hanging fruit (even if not very large) is usually the easiest to pick.

Tax does have to be taxing.

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3 comments:

  1. 24hrs and still no comments, apathy, lethargy or simply disinterest?

    Read the blog, the newspapers and watched the programme, for Ecclestone, it is a foregone conclusion that he will not serve a custodial sentence as a result of his sojourn before the German legal system. would be interested to know what his lapel badge represents though as he is not usually photographed so emblematically adorned?

    So, here we have a depressingly familiar tale with a host of parts reeking of corruption and cover-up as HMRC rolls out its old favourites about not commentating about individual cases etc. yet a number of websites have picked up on German sources stating an that Investigation is already underway in the UK in accordance with Code of Practice 8 (e.g. see pitpass.com). As for who was in the driving seat at HMRC for this particular "sweetheart deal", who do you think, someone with a chequered career no doubt?

    It's nice to recall that according to Cameron " we are all in this together "
    There We Are Then!
    Muppets £10m Tax Avoider $2Bn - what a result.

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  2. I watched the Panorama episode and what a pity it was so weak. Darragh Macintyre was clearly having to tread a very careful line to avoid being sued and so he had to admit that Ecclestone, like Starbucks, Google and Amazon had done nothing illegal. It would appear that the BBC/Panorama have been investigating this story for years (at what cost?) and yet the program they put out was a real waste of time and effort.
    Ecclestone was the wrong target. The problem lies with our weak hypocritical MPs. Macintyre had the shadow AG Emily Thornberry MP(a former Human Rights barrister who clearly knows little or nothing about the Law of Trust or taxation) and let her attack Ecclestone without asking her the obvious question about who passed the laws that made his actions legal. We daily listen to the arch hypocrite Margaret Hodge MP going on about people paying the "right" amount of tax - surely that has to be the legal amount of tax due under the law. The fact that the law is so complicated that it allows people like Ecclestone to legally reduce their liabilities is down to the MPs. Yet when they were told that the anti avoidance rules on disguised remuneration were so complicated and incomprehensible that they might catch MPs expenses what happened? Instead of telling HMRC to produce legislation that everyone could understand, at the last minute they inserted the infamous section stating that MPs are exempt from the anti avoidance rules - ITEPA Section 554 E (12) " Chapter 2 does not apply by reason of a relevant step taken by the Independent Parliamentary Standards Authority in relation to a member of the House of Commons."

    You could not make it up!

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  3. Seems that yet again Private Eyes' "sources" and researchers are top of the class.
    current issue 1365 page 33 - how on earth were the revenue getting away with such deals?

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