BBC Uncovers ‘Aggressive’ Tax Avoidance Scheme

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Courtesy of Zoe Conway @ The BBC:

Anderson Group, one of the recruitment industry’s most high-profile companies, is promoting an “aggressive” tax avoidance scheme which experts are calling “abusive”.
The scheme works by exploiting the government’s Employment Allowance.

The scam could deprive the Treasury of tens of millions of pounds of National Insurance payments.

Anderson Group says that all of its services are fully compliant with UK tax laws.
It says it is “totally incorrect” to say that Anderson Group is promoting the scheme and says it is a product being offered by one of its clients.

Anderson Group, which calls itself the UK’s “leading provider of support services to the recruitment industry” has hundreds of agencies and thousands of contractors on its books.

The tax avoidance scheme works by exploiting the government’s Employment Allowance which was introduced last year.

The allowance enables companies to claim £2,000 off their annual employers’ National Insurance bill and was meant to encourage small businesses to take on more workers.
Secret recording

The BBC secretly recorded Anderson Group’s sales manager, Ian Moran, promoting the tax avoidance scheme to a recruitment agency.

The agency he was pitching to employs 300 workers, many of whom work in low paid jobs in warehouses or as labourers.

Mr Moran suggested that if the recruitment agency were to set up more than 100 limited companies with a couple of workers in each of them, each company could then claim the £2,000 allowance.

By Mr Moran’s calculations the agency’s National Insurance bill would then fall from £300,000 a year to zero. Continue reading

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David Cameron’s family fortune: the Jersey, Panama and Geneva connection

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David Cameron embraces his father during an election rally in Swindon in 2010. Ian Cameron helped establish Panamanian investment fund Blairmore Holdings Inc. Photograph: Toby Melville/Reuters

 

Courtesy of Ed Howker & Shiv Malik @ The Guardian:

At the heart of a stunning 50-acre estate by the banks of the river Deveron in Aberdeenshire sits the granite-clad Victorian mansion Blairmore House, home to four generations of the prime minister’s family.

Built in the 1880s by Alex Geddes, a Scotsman who became known as the Chicago grain king, the estate holds decades of David Cameron’s family history. The union of the Geddes and Cameron families was celebrated in the grounds in 1905, and the nearby chapel remembers forebears killed in the first world war. David’s father, Ian Donald Cameron, was born in 1932 at Blairmore House. But soon after that, the old place was sold.

So it was perhaps for sentimental reasons that the offshore fund Ian Cameron helped to establish in the tax haven of Panama shares the name. Blairmore Holdings Inc, just like Blairmore House, is a monument to wealth obtained overseas.

Valued today at £25m, the Panamanian fund was established in 1982 while David was still at Eton, the school that his father attended. At the time, Ian Cameron still worked at Panmure Gordon, the City broking firm at which three generations of the family were senior partners.

The family’s banking history goes back even further, to the 1860s, when Sir Ewen Cameron joined the industry. He later helped the Rothschild banking dynasty sell war bonds during the Russo-Japanese war. While at Panmure Gordon, Ian was a bond specialist too, showing determination to overcome his physical disability – he was born with deformed legs – and make partner at the firm by the age of 30.

What little we know of the historic activities of Blairmore Holdings comes from a shareholders’ prospectus issued in 2006, less than a year after David Cameron became leader of the opposition.

The prospectus, designed to attract investors with a licence to take risks, notes that Ian Cameron, a director of the company, “was instrumental in the formation of Blairmore Holdings Inc” and explains that the fund is designed to “provide investors with steady long-term capital growth over and above the global rate of inflation”. Continue reading

It’s the tax dodging, stupid

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Courtesy of Private Eye 1366:

THE proposed takeover of British drugs company AstraZeneca by US giant Pfizer graphically illustrates how George Osborne’s conversion of Britain into a corporate tax haven distorts industry worldwide and threatens domestic jobs and business.

The plan is for Pfizer to use the takeover to “re-domicile” its head office. This means little more than setting up a brass plate company in the UK at the top of the organisation which will magically enable a firm turning over more than $50bn a year to cut its tax bill from around 27 percent at present to about 20 percent. Since the combined group will continue to make most of its money in the US, where tax rates are around 35 percent, and international tax rules ostensibly work on the principle that profits are taxed where they’re earned, the monumental scale of the tax dodging is clear. Analysts put the tax “saving” from the merger at more than £800m a year.

Laws introduced by the chancellor two years ago allow a UK-controlled multinational to shift profits into tax havens like Ireland and the Netherlands without being taxed. They can then get them back to shareholders tax-free via a UK holding company, whereas if the company had been an American one, the US taxman would have taxed them. As our special report Tax, Lies and Videotape revealed last year in Eye 1349, Osborne’s laws are being exploited to ensure that companies drastically reduce or eliminate tax bills. Tax advisers, including a KPMG director, told the Eye’s undercover “tax consultant” that the rules could be used in a merger to “wipe out” his client’s UK tax bill. Continue reading

Amazon UK boycott urged after retailer pays just £4.2m in tax

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Amazon.co.uk’s warehouse in Milton Keynes. Photograph: David Levene

Courtesy of Juliette Garside @ The Guardian:

Shoppers have been urged to boycott Amazon’s British business after it paid just £4.2m in tax last year, despite selling goods worth £4.3bn – more than the UK sales of Argos, Dixons or the non-food arm of Marks & Spencer.

Margaret Hodge, chair of the public accounts committee, said shoppers should find alternatives to the Seattle-headquartered retailer, after consumer action persuaded coffee chain Starbucks to resume UK tax payments last year.

“It is an outrage and Amazon should pay their fair share of tax,” said Hodge. “They are making money out of not paying taxes. I no longer use Amazon. We should shop elsewhere. What we demonstrated with Starbucks is the power of the consumer voice.”

Amazon’s most recent charge brings to just over £10m its contribution to the public purse through corporation tax in a decade. Over the last four years, Amazon has generated £23bn in British sales. It made a tax contribution of £3.2m the previous year.

Amazon is able to pay low tax because when shoppers in Europe buy from any of its local websites, the payment is taken by a subsidiary based in the low tax jurisdiction of Luxembourg. A British shopper’s bank statement will show a payment to Amazon EU S.à.r.l. rather than Amazon.co.uk.

Amazon’s British arm employs thousands of staff in warehousing, software design, accounting, human resources and other functions. For tax purposes, its role is simply to provide services to the European master company in Luxembourg.

“People will look at this and feel it’s incredibly unfair,” said Tory MP and tax campaigner Charlie Elphicke. “That they work hard and pay their taxes while big American multinationals engage in industrial scale tax avoidance. This is why international tax reform is badly needed and why the chancellor has been right to make the international case. Tax abuse is wrong and must be stamped out.” Continue reading