HMRC To Review The Pandora Papers

The thing that the Guardian accuses the Blairs of benefiting from - avoiding stamp duty on a transfer of property - is exactly what the Guardian did with its Caymans holding company. Even the excuse, that another party in the deal insisted, is the same.

— Media Guido (@MediaGuido) October 4, 2021

Tax does have to be taxing.

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Did HMRC Break The Law?

The Guardian reports that the Public Accounts Committee (PAC) is looking into claims, from an HMRC whistleblower, that Dave "Jack" Hartnett's deal with Vodafone to waive £7BN of tax may have been outwith the powers (ultra vires) of HMRC (ie illegal).

The whistleblower also claimed that the agreement that HMRC claimed let the giant vampire squid (Goldman Sachs) off £10M was in fact worth £20M.

£10M here, £10M there; details mere details!

Margaret Hodge, chair of the committee, told the Guardian that she had received the new allegations from someone with an apparent detailed knowledge of the deals and confirmed that a senior counsel may now assess them.

"The main allegation is that senior officials at Revenue and Customs have acted ultra vires [beyond their powers] and we are duty bound to take that seriously."

I wonder if the whistleblower is part of "Dissent"?

Jack has thus far avoided detailed scrutiny by citing legal privilege. That defence, if the allegations are valid, has just been blown out of the water.

However, HMRC is standing by its guns and is quoted:

"We are entirely confident that our approach to large business tax settlements is the right one. This approach has brought in more than £13bn from large businesses since 2006.

We have not seen the material which the Guardian tells us may be referred for counsel's opinion so it would be wrong to comment further....

Dave Hartnett's evidence to the PAC [public accounts committee] is entirely consistent and accurate.

Mr Hartnett made clear that an error occurred and the comptroller and auditor general is on record as saying this error was between £5m and £8m."

This will run and run!

Tax does have to be taxing.

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Smug Alert

The battle between Tesco and the Guardian, over an article that the Guardian published relating to Tesco's alleged tax arrangements, has taken another twist over the weekend.

The Guardian now admits libel, and has formally offered amends. However, the Guardian made it clear that it would strenuously defend a malicious falsehood claim by the company.

Yet, despite this, the Guardian has chosen to stand astride a self constructed "moral soapbox" and displays a remarkable degree of smugness.

Its defence papers state:

"With profits before tax of over £2.5BN, Tesco has no possible commercial or ethical justification or need for SDLT tax avoidance.

Tesco must at all material times have been aware that many of its customers and shareholders would reasonably deplore tax avoidance of any kind."

What complete and utter crap!

Tax avoidance is legal, and commercially logical.

We all practice it (eg via use of personal allowances, ISAs etc).

What gives the Guardian the right or "moral" superiority to dictate to us that tax avoidance is unethical, or that the shareholders or customers of Tesco would deplore tax avoidance?

Is the Guardian saying that none of its journalists, shareholders, board or readers practice tax avoidance?

As already noted, we all do!

Maybe it should get its head out of its own backside, stop smelling its own farts, and take a good look at reality for once.

This misplaced and odious smugness from the Guardian forms part of the ongoing drip drip drip of negative publicity being spewed forth by the government, their lackeys and HMRC against tax avoidance.

The government is broke and is desperately looking for ways to find more money to feed its insatiable appetite. Once they have broken the backs of the more elaborate and expensive tax avoidance measures, they will come after the more mundane (ones that you, I and the Guardian staff/board/readers use).

Tax does have to be taxing.

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HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Bring It On

The Tesco vs Guardian dispute, over an article in the Guardian about Tesco's alleged tax avoidance plans, has intensified.

Tesco has demanded that the Guardian issue a front page apology.

As I have already noted, the story in the first place (although it transpires it was factually incorrect) was theoretically a non story.

Tax avoidance is legal.

However, in Brown's Britain (which is broke) the government, left of centre media organs, yesterday's politicians and HMRC are keen to tar tax avoidance with the same brush as tax evasion (which is illegal).

Tesco are to be congratulated for their stand against the ongoing negative publicity spewed forth by HMRC, the government and its lackeys.

The government and HMRC, if they succeed in shutting down complex and expensive avoidance schemes will move on to the more simple every day ones such as ISAs and even personal allowances.

They are broke and they are desperate.

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

The Drip Drip Drip Continues

Yesterday's man, Michael Meacher MP, has written an article in today's Guardian calling for HMRC and the chancellor to "crack down on tax avoidance".

I am pleased to see that Meacher does agree with the point that I have repeatedly made on this site, that tax avoidance is legal. However, he states that whilst being legal it is "immoral".

Given that everyone who pays tax uses tax avoidance techniques, such as personal allowances, to reduce their tax liability; does this mean that we are all immoral?

Despite the drip drip drip of anti avoidance articles, written by certain politicians and would be politicians, there is nothing immoral about trying to reduce your tax liability.

The problem is that the governement is spending more than it is taking in tax.

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Guardian Says Sorry

The Guardian has apologised to Tesco over its reporting of Tesco's tax affairs.

As noted on this site in April, the Guardian wrote an article about Tesco's alleged tax avoidance plans.

Seemingly the Guardian was talking bollocks, and has now stated that it no longer believes that Tesco's Cayman island structures allowed it to avoid up to £1BN in corporation tax.

"The original Guardian articles did not correctly explain the effect of Tesco's tax schemes. It was wrong to state that they were designed to avoid corporation tax. It would have been correct to refer to avoiding SDLT [Stamp Duty Land Tax].

As a result, the figure of 'up to £1bn' - calculated as the amount which could have been saved on the disposal of £5bn of property - is wrong. The loss to the exchequer is likely to be nearer the region of £90m-£100m."

All very well, but even if there had been a tax avoidance plan that could have saved £1BN, the Guardian has been duped by Hartnett and Brown into their web of deception that tax avoidance is somehow wrong.

So what if Tesco had in fact put together a tax avoidance plan for saving £1BN?

Tax avoidance is perfectly legal, we all do it each year by eg claiming our personal allowances.

Hartnett and Brown are keen to tar tax avoidance with the same brush as tax evasion (which is illegal) because they desperately need to increase the tax take, as the government's finances are blown.

Once they have cracked down on high profile schemes, they will turn their attention to the more "mundane" ones such as isa's and possibly even personal allowances.

The Guardian was duped into playing the government's and HMRC's game, yet they still don't see this. Their apology snidely refers to "clever accountants", thus leading the reader to conclude that tax avoidance is somewhat "dodgy".

However, being the Guardian, it chooses to cite their "righteous moralism" over "correctly reporting the facts" as being justification for the error.

"We remain ready to defend our journalism - in court, if necessary. We believe these matters should be subject to debate and scrutiny, and we invite further informed analysis from any readers with experience in accountancy or tax law."

They want input, I suggest that you give them some; here is their email tax@guardian.co.uk

Tax avoidance is legal!

The most effective way for the government to reduce the time, effort and money spent by HMRC on chasing tax avoiders is to simplify the tax system; thus making it unnecessary for companies and individuals to set up complex and costly tax avoidance structures.

Unfortunately, Brown and Darling don't do "simplification".

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Negative Spin

I have stated a number of times on this site my concern over the "subtle" negative spin being propagated by Hartnett, Brown and certain elements within HMRC over tax avoidance.

They would have us believe that tax avoidance is wrong, and bordering on being illegal. Hartnett et al are cunning in their campaign, they seek to highlight the multi million pound "aggressive" (their word) tax avoidance schemes practised by large companies and very wealthy individuals.

They know that this drip drip drip of negative publicity, because it only relates to the super wealthy and multi nationals, has the desired effect of persuading the ordinary taxpayer that tax avoidance is the tool of the rich and (human nature being what it is) should be aggressively resisted.

Now here is the problem:

1 Tax avoidance (legitimately reducing your taxable income) is legal, it is tax evasion (hiding taxable income) that is illegal.

2 We all practice tax avoidance by the very fact that we use personal allowances, isa's, tax credits etc.

Why then would Hartnett et al seek to create the false impression of illegality wrt avoidance?

Three reasons:

1 Brown is running out of money, he desperately needs to increase the tax take; cutting back on people's legal right to reduce tax, by making it more difficult for them to avoid tax and by slandering them, is an easy option.

2 HMRC et al are softening the rest of us up for reductions in tax allowances (personal allowances are already not in fact raised in line with inflation).

3 HMRC and Brown are softening us up for legislation that will make avoidance illegal.

Indeed, so effective has this drip drip drip of negative publicity been that even Tesco and The Guardian have been suckered into a fight over it.

Tesco is suing The Guardian over claims the paper made about its tax planning.

Tesco claims that the Guardian wrongly alleged that Tesco had set up a tax avoidance structure offshore to avoid paying up to £1BN in corporation tax, and that the supermarket had already avoided £500m in corporation tax using the structure.

It claims it has saved only £23M in stamp duty from the scheme, and could avoid a further £30M-£40M from the structure, again in stamp duty.

The paper said the claims were an attempt to "chill public debate" on tax avoidance issues.

The Guardian are quoted in Accountancy Age:

"We have never claimed Tesco behaved illegally. These are matters of considerable political importance at present, debated by all parties."

So we have here two large organisations, one legally using legitimate tax avoidance techniques the other reporting on those techniques and stating that they are not illegal.

Had Hartnett et al not been feeding the public misconceptions about tax avoidance there would be no story here and the Guardian would never have bothered to print it, and Tesco (had the Guardian printed this non story) would not be bothered about the Guardian printing it in the first place.

This is the direct consequence of the HMRC and government campaign to denigrate those that practice tax avoidance, and to imprgenate tax avoidance with the stench of disrepute.

As I have already said, all of us practice tax avoidance. Once HMRC, Hartnett and Brown have curtailed the legitimate activities of the large companies, they will come for the rest of us, who then will stand up for us?

"In Germany they came first for the Communists,
and I didn't speak up because I wasn't a Communist.
Then they came for the Jews,
and I didn't speak up because I wasn't a Jew.
Then they came for the trade unionists,
and I didn't speak up because I wasn't a trade unionist.
The they came for the Catholics,
and I didn't speak up because I was a Protestant.
Then they came for me,
and by that time no one was left to speak up."

Martin Niemoeller

To repeat:

Tax avoidance is legal, tax evasion is illegal.

HMRC want you to believe something else!

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Guardian Angels

Following on from last year's Datagate fiasco, when HM Revenue and Customs (HMRC) lost the personal details of 25 million people, HMRC has recently appointed 37 staff to protect information.

Jane Kennedy, financial secretary to the Treasury, in a written parliamentary answer stated that every one of HMRC's business units now has a data guardian "to strengthen the management of the department's data assets".

She said that 24 of these guardians are based in London, two in Tyne and Wear (where the data was lost) and 11 based in other locations.

Ms Kennedy noted that "guidance was provided on the competencies, experience and knowledge that the role would require".

Adding:

"Support for the HMRC data guardians has included awareness events, written material and access to additional support and guidance of departmental security specialists."

The minister for disabled people and MP for Stirling, Anne McGuire, stated that stronger arrangements are now in place, for discs sent to the National Audit Office.

"Rigorous courier arrangements and a requirement that physical transfers of data must have the specific authority of a member of the senior civil service [are in practice]."

The question arises as to whether this is merely an exercise in window dressing, or a genuine and well thought through plan (proactive rather than reactive) by HMRC to strengthen its internal security procedures.

Are these "Guardians" well qualified IT professionals, or junior civil servants with low level IT qualifications?

The fact that "support" and "training" is being offered to the guardians indicates that they are not that well qualified for the task.

The civil service, given the well publicised disasters re IT (eg failed NHS system, datagate etc) has a well deserved reputation for being less than well endowed with people who have substantial, professional IT, computing and systems experience.

Why do they not make greater use of encrypted mail, and abandon the high risk courier option?

It seems very much that this is a window dressing exercise, designed to show a stable door being closed. Regrettably the horse has long since bolted.

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com) is brought to you by www.kenfrost.com "The Living Brand"

A Serving of Fudge

Alastair darling served MP's up a generous portion of fudge yesterday, when he outlined the results of the Poynter review into the HMRC "Datagate" fiasco.

Seemingly the review is not yet finished.

How convenient!

"Let us wait and establish the facts rather than jump to conclusions."

Was Darling's response to detailed probings from MPs.

In the meantime, Poynter has come up with a few urgent recommendations.

HMRC will need a new organisational structure, simpler one with accountability at executive level.

A fair point, the trouble is "simplicity" and Gordon Brown simply do not go together.

Here are some his other recommendations, the pharse "bleeding obvious" springs to mind:

• A reminder to all staff from the Chairman of HMRC of the importance of data
  security with some specific guidance



• The appointment of a senior official to the new post of Director of Data
  Security



• The appointment of Data Guardians in each area of HMRC



• The imposition of a complete ban on the transfer of bulk data onto removable
  media without adequate security protection such as encryption



• The disabling of the download function on all personal and laptop computers
  in use across HMRC to prevent their use to download data onto removable
  media



• The utilisation of secure couriers and appropriate tamper proof packaging in
  the transport of bulk data stored on removable media

The full verdict on the failure HMRC's data procedures is due "in the first half" of next year. A standard ploy by government, designed to ensure that by then everyone will have lost interest in the subject.

Here is the Poynter Review in full (all 6 pages of it).

A nice little earner for the consultants!

By the way, let us be perfectly clear, the report is complete shite and a waste of our money (anyone who uses the phrases "world class" and "HMRC" in the same sentence is clearly out of his depth).

www.hmrcisshite.com is brought to you by www.kenfrost.com "The Living Brand"

Systematic Failure

The data protection minister, Michael Wills, today said it was "too soon" to judge whether HM Revenue & Customs had been guilty of "systemic failure" in losing the personal information of 25 million people.

His comments came as police continued to search for the two CDs, containing child benefit data relating to 7.25 million families, which have been missing since a HMRC junior manager posted the discs to the National Audit Office on October 18.

Appearing before the joint committee on human rights, Wills said there were a "number of reasons" why he was not told about the loss of data before Alistair Darling's Commons statement.

Asked by the committee chair, the Labour MP Andrew Dismore, if he agreed with the Tories' accusation that HMRC was guilty of "systemic failure", he said:

"It's far too soon for me to be able to judge that. It's certainly wrong, deeply regrettable and the prime minister has already apologised for it."

Committee members expressed incredulity that Wills, as data protection minister, was not told about the problem before it was revealed in Parliament.

Source The Guardian

Government Under Fire for HMRC Data Fiasco

Ministers are facing demands for answers after 25 million people's personal details were lost in Britain's worst ever data protection breach.

The "catastrophic" blunder by HM Revenue and Customs (HMRC) means nearly half the UK's population - including leading politicians and businessmen - are at risk of identity fraud.

Chancellor Alistair Darling revealed the staggering scale of the debacle in an emergency statement to MPs, as Paul Gray, the head of HMRC, fell on his sword.

Two compact discs containing names, addresses, dates of birth, child benefit numbers, national insurance numbers and bank or building society account details of some 25 million individuals and 7.25 million families have gone missing.

The Commons emitted a collective gasp as Mr Darling explained how a junior official sent the entire child benefit database from the HMRC HQ in Newcastle to the National Audit Office in London on October 18.

In flagrant breach of the agency's procedure, the package was not even posted recorded delivery through contracted courier TNT, and never arrived at its destination.

However, senior management at HMRC were not informed of the problem until November 8, with Mr Darling and Prime Minister Gordon Brown finally brought into the loop two days later.

The officials involved apparently waited to raise the alarm because they hoped the password-protected discs would "turn up".

The Metropolitan Police is now leading the hunt for the package, while Mr Darling has ordered a probe into security procedures at HMRC and the Independent Police Complaints Commission is also investigating.

The Chancellor stressed there was no evidence that the information had fallen into criminal hands and said the public would be protected against any fraud by the Banking Code.

Source The Guardian