Out 'Hodgeing' Margaret Hodge

Here is a clip from this afternoon's Public Accounts Committee hearing with Edward Troup (HMRC) about the 114,000 NonDoms living in the UK. Great 'rant' by Richard Bacon MP (Con. Sth Norfolk).

Alternatively link for iPad users Here

Am I the only one to smell another City/HMRC rat?

A certain unnamed banking CEO (click here [FT£]) gave some interesting evidence this week to the Parliamentary Treasury Select Committee. (His name is apt given his attitude to us 'little people').

He seems to have gone to great deal of trouble to set up an elaborate financial structure for his pay involving:-

1. Registering with HMRC as a UK Non-Don (non-domicile resident) exempting him from tax on 'overseas' earnings despite being born and bred in the UK and living and working in London for the past 12 years.

2. Designating himself as one of handful of ‘internationally mobile’ employees being paid, not in London, but via one of the Bank’s subsidiaries in the Netherlands thus avoiding that pesky P.A.Y.E. that 'little people' pay. This of course would count as non-taxed ‘overseas earnings’ for UK non-doms.

3. Having his pay and bonuses paid into his Swiss Bank account via a shadow company he had set up in Panama.

Having done all this, he claims that he (has now) paid his UK taxes in full.

Do I spot another HMRC sweetheart deal letting the big fish off the hook as long as they pay up after they have been caught? Would someone really pay the £30k non-dom 'fee' for no reason?

The simple fact is that these guys have the power to move 'their' bank's H.Q. at will out of London to Hong Kong, Dubai, Singapore (or Panama) where the governments don't care a jot about paying for a civilised society although they seem very happy to 'free load' off the rest of us and live here themselves. Both the Bankers and MPs know who has the ultimate power and it isn't the MPs.

Here is the (4 hour) video of the Treasury Select Committee if you have wish to be very depressed about the competence and morality of these guys.
See 15:30 - We quickly instigated a cover up in our other High Net Worth personal banking locations.
Also 15:34 - Threat to leave the UK if you upset us.

And 15:51 - John Mann MP.

Why companies DO pay tax and not just pass it on to their customers

Let us take for our example a company with a pre-tax profit of £100m per annum.

At the old UK Corporation Tax rate (of 28%) they would have paid £28m in Corporation Tax.

Now, with the coalition 'business friendly' UK Government, Corporation Tax has been reduced to 21% giving the company directors the happy task of deciding what to do with the windfall £7m spare cash.

This is how I see their options:-

1/ Pay themselves the money as a 'reward' for their inspired business leadership.

2/ Put the money in an offshore account to secure company profitability for subsequent years.

3/ Pay the money out to shareholders.

4/ Invest in expansion of the company.

5/ Give the company workforce a pay rise. (just kidding)

6/ Use some of it to make a large contribution to a political party to reduce Corporation Tax to 15% next year.

7/ Reduce prices for the company's customers.

Now, which option do you think they would choose?

 

As the executives, more than likely, have advantageous tax exile or non-dom status, corporation tax is the ONLY way to gain any tax revenue from them.

Remember - Every penny not paid by companies is paid by the ordinary citizens via P.A.Y.E. and V.A.T.

Cartels, my Grandfather and the Super Rich

Yes, I have been pondering (a joy of being retired) about what has happened in my lifetime to produce the Super Rich (Davos et al.).

Why doesn’t the Capitalist treasured concept of ‘free market forces’ limit these excesses? 

I have concluded ‘it never did!’

My Grandfather (Henry Ernest) and Great Grandfather (Ebenezer) owned a grocery shop in Biggleswade (just 50 miles up the A1) from London.

They were part of the small town’s prosperous business community, owning a car before WWII and living in a large detached house, which had the first domestic heating system (back boiler & hot water tank) in the town. Ebenezer was on the board of the local Workhouse (he stood out against the men having a glass of beer at Christmas as he was a good Methodist).

Now – why were they able to live so well compared to others in Biggleswade?

I have concluded that they, and the say four other grocers in the town, operated an informal Cartel.

I am not saying they liked their competitors but neither were they in the business of slashing their prices to drive them out of business. As long as they had a ‘reasonable’ share of the town’s grocery trade they were definitely NOT going to rock the boat.

The gap between them and the inmates of the said Workhouse was quite wide but nowhere near as wide as between the average citizen and the Super Rich we see today.

The simple fact is the same ‘informal’ Cartels exist today but on a much larger scale. This is due to much better logistics and computer based information systems available to the big boys which allows them to operate on a national (Sainsbury’s) or international (Lidl) level.

A new entrant into the UK energy (such as Ovo Energy) have no interest of ‘slashing its prices’ once it has established a ‘reasonable’ market share. They are all creaming it!

The problem is a massive one that could well destabilise our society and cause civil unrest and I cannot think how mere politicians can legislate to tackle it.

Comments welcomed.

Last of a generation

Funeral of my cousin Derek Barnett (my Mother's eldest brother Arty's son) last Monday in Ravensden, Bedford.

The picture is of Derek (Navy), John Chew [my Father] (Army), Gerry Allison [cousin] (Air Force) on my parents' Wedding Day 28th April 1945.

They look SO happy. A month after V.E. Day but V.J. Day still four months off.

Thank God for Owen Jones

Just as I thought all political figures were corrupt and bought by big business, along comes Owen Jones' Agenda of Hope. Cometh the Hour Cometh the Man?

Agenda for hope: Owen Jones’s nine-point manifesto

1) A statutory living wage, with immediate effect, for large businesses and the  public sector, and phased  in for small and medium  businesses over a five-year Parliament. This would save billions spent on social security each year by reducing subsidies to low-paying bosses, as well as stimulating the economy, creating jobs because of higher demand, stopping pay being undercut by cheap labour, and tackling the scandal of most of Britain’s poor being in work. An honest days’ pay for an honest days’ work would finally be enshrined in law.

2) Resolve the housing crisis by regulating private rents and lifting the cap on councils to let them build hundreds of thousands of houses and in doing so, create jobs, bring in rent revenues, stimulate the economy and reduce taxpayers’ subsidies to landlords.

3) A 50 per cent tax on all earnings above £100,000 – or the top 2 per cent of earners – to fund an emergency jobs and training programme for young unemployed people, including the creation of a national scheme to insulate homes and businesses across Britain, dragging millions of out of fuel poverty, reducing fuel bills, and helping to save the environment. All such jobs will be paid the living wage, supported with paid apprenticeships rather than unpaid “workfare” schemes.

4) An all-out campaign to recoup the £25bn worth of tax avoided by the wealthiest each year, clamping down on all possible loopholes with a General Anti-Tax Avoidance Bill, as well as booting out the accountancy firms from the Treasury who help draw up tax laws, then advise their clients on how to get around them.

5) Publicly run, accountable local banks. Transform the bailed-out banks into regional public investment banks, with elected taxpayers’ representatives sitting on boards to ensure they are accountable. Give the banks a specific mandate to help small businesses and encourage the green industries of the future in each region.

6) An industrial strategy to create the “green jobs” and renewable energy industries of the future. It would be focused on regions that have been damaged by deindustrialisation, creating secure, skilled, dignified jobs, and reducing unemployment and social security spending, based on an active state that intervenes in the economy, learning from the experiences of countries such as Germany.

7) Publicly owned rail and energy, democratically run by consumers and workers. As each rail franchise expires, bring them back into the public sector, with elected representatives of passengers and workers to sit on the new management boards, ending our fragmented, inefficient, expensive railway system. Build a publicly owned energy network by swapping shares in privately run companies for bonds, and again put elected consumers’ representatives on the boards. Democratic public ownership instead of privatisation could be a model for public services like the NHS, too.

8) A new charter of workers’ rights fit for the 21st century. End all zero-hour contracts, with new provisions for flexible working to help workers. Allow all unions access to workplaces so they can organise, levelling the playing field and giving them a chance to improve wages and living standards. Increase turnout and improve democratic legitimacy in union ballots by allowing workplace-based balloting and online voting.

9) A universal childcare system that would pay for itself as parents who are unable to work are able to do so, and which would take on the inequalities between richer and poorer children that begin from day one. 

Yes Disney was great

Yes, we had a wonderful time.

So many rides and all well done.

Were next time?