student fees protest

corporate benefit scroungers

http://www.bbc.co.uk/news/uk-11993680

oh no. Another hero crumbles

I was just laughing at the fact the police pulled him from his wheelchair

Snow on its way. More students demos. Police hopefully going to use water cannons. Who says there is nowt good on TV @ Christmas time. This will be awesome viewing.

Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/64cf78cc-06f3-11e0-8c29-00144feabdc0.html#ixzz18B8YoWUN

Saturday is Pay Day. That is what activists are calling their day of action against companies they accuse of not paying their share of corporation tax. They are targeting Vodafone and Sir Philip Green’s Arcadia retailing group. On previous occasions, demonstrators have blocked store entrances and glued themselves to the windows.

People who would never join a “flash mob” or, perhaps, even know what one was, sympathise with the cause, if not with the methods. The Daily Mail, middle England’s favourite newspaper, said that while it did not condone the protesters’ actions, “we can understand why many hard-pressed Britons will share their sense of injustice”. The newspaper also accused Kraft Foods of the US of trying to “dodge the taxman” by moving some functions of Cadbury, the UK confectioner it acquired this year, to Switzerland. On the Mail’s website, readers called for a boycott of Cadbury’s products.

Are these protests justified? The activists claim Vodafone owes the UK tax authorities £6bn ($10bn). In fact, the mobile phone operator settled its argument with the Revenue & Customs in July, agreeing to pay £1.25bn. The company itself appears to think it got off lightly – it had made provision in its accounts for £2.2bn. But it has paid all outstanding amounts and not even the saintliest taxpayer feels obliged to hand over money the authorities are not demanding.

Sir Philip’s is a different case. He is a UK taxpayer, but Tina, his wife, who owns the company, lives in Monaco, which meant she paid no tax on a £1.2bn dividend she received in 2005. This is entirely legal. I would imagine most readers of (and writers for) this newspaper divide their family assets to minimise their tax liabilities. But by residing in the same country as our spouses (and having less to share), we avoid this level of hostility.

As for Kraft, it runs its European operating company out of Zurich – Switzerland being a favoured home for many companies. Kraft says it is integrating Cadbury into its European structure. It says the balance between employee numbers in the UK and Ireland (about 7,000) and Zurich (fewer than 1,000) will not change much, but then the tax base is rarely where the jobs are.

I suspect that this is what most annoys objectors to companies’ tax arrangements. It is not just that they believe companies are evading their responsibilities at a time when taxpayers face the slashing of their services. It is that it all seems so contrived. Ordinary people cannot work in Pittsburgh and pay (or not pay) tax in Bermuda, or live in Birmingham and enjoy Geneva’s tax rates. Why should companies be able to do so?

Underlying this is one of the oldest business debates. To whom do companies owe their duty? To the society in which they operate or to their shareholders? The latter view has held sway in recent decades, which is why companies have done everything possible to reduce their tax payments.

If all countries had the same corporate rates and the same approach to taxing worldwide earnings, there would be no point in moving. But as that could probably be achieved only through world government, there will often be tax advantages to locating corporate functions elsewhere.

France and Germany put pressure on Ireland to raise its unusually low corporate tax rate of 12.5 per cent as the price for a European Union bail-out. It resisted. The country has attracted not just US technology and pharmaceutical groups, but has become the official domicile of UK companies such as WPP, the advertising and communications company, and Shire, the pharmaceuticals group.

Companies sometimes succumb to pressure. When Accenture, the consulting group, decided to move its official incorporation out of Bermuda, it mentioned negative publicity from being associated with countries that did not have tax treaties with the US. It added that it feared it might struggle to win government contracts. So where did it move to? Delaware? No, Ireland.

Given the savings to be made, the pressure on companies would have to be considerable to persuade them to give up their tax arrangements. It would be easier to prise glued-on protesters from store windows than companies from their tax advisers.

A sustained consumer boycott of these companies might make a difference, but, as I have arguedin previous columns, these seldom inflict any real damage. Announcing that knighthoods would go only to company bosses with headquarters in the UK would produce some interesting corporate dilemmas, but which government would be brave enough to risk the drop in political donations that might follow?

Companies will probably tough this one out. But some of their leaders are in for an uncomfortable ride from an angry populace

http://www.ft.com/cms/s/0/64cf78cc-06f3-11e0-8c29-00144feabdc0.html#axzz18B8GTwSy

whilst some of that is accurate, some is plainly not. Vodaphone did pay all tax asked of it by HMRC but what is not mentioned in mainstream media articles (for fear of being sued) is that the negotiators in this case were the head of the tax and his former boss who had just left to join Vodaphone. Not really a level playing field that.
Sir Phillip Green is targeted not just because he didn't pay tax on £1.2 billion of profits made in the UK, but because he was appointed by the tories as their 'efficiency advisor' to tell them how to make massive cuts to public services which are not run for profit in the first place. You couldn't make it up.

"Underlying this is one of the oldest business debates. To whom do companies owe their duty? To the society in which they operate or to their shareholders?"

This is the wrong question. It should be 'to whom do governments owe their duty? to the society in which they operate or to their citizens?'
We are constantly told there is nothing we can do about these massive tax scams which increase the burden on all the rest of us tax payers but there is. If we refused to allow them to operate in the UK unless they stopped scamming us they would change. And if we refused to let predatory foreign corporations and venture capital pirates take over good UK firms and asset strip them like Kraft did to Cadbury,then we might be in a better state.

It's said they would leave the country if we tried that , a similar argument is made about bankers bonuses. It was the same argument made in Ireland until the proposals to pay €40 million bonuses to the guys who bankrupted the Irish economy caused so much outrage that the government were forced to ban them.
The bankers are still there. Without their bonuses.

If we had a government with some spine and the will to sort this it could be done. But since all the MP's go onto the boards of those companies as soon as they leave politics, unless there are riots on a major scale, nothing will change. The Financial Times itself is owned by Rupert Murdoch who pays no tax on his UK activities.

It's all so cosy

http://www.facebook.com/home.php?#!/event.php?eid=176908899005678

http://www.ukuncut.org.uk/targets

^
this

From the daily Mail:

The great tax heist
To service Britain's terrifying debt, the middle classes are paying ever more tax. Yet a group of the country's biggest firms are moving offshore - and denying the UK exchequer hundreds of millions

The familiar blue-and-white logo above more than 2,500 High Street shops remains as it has for decades.

The chain of chemists started by John Boot 161 years ago continues to dish out medicines and sell everything from cold remedies to corn pads.

Boots, surely, is a quintessentially British business. It was founded in Nottingham, where its headquarters remain. Although it merged with pan-European pharmacy business Alliance UniChem in 2006 to become Alliance Boots, it is still outwardly British, a national corporate treasure.

This impression, however, is misleading. Pick through its financial accounts and you can trace its ownership back along a trail that leads not to Nottingham, but to Zug in Switzerland — a prim, rich city of 25,000 souls, sitting roughly midway between Zurich and Lucerne.

Zug — legally, at least — is the true home of *Alliance Boots. The company’s registered office is at 94 Baarerstrasse. There is little sign of activity here, though. The nondescript building is merely the company’s post box address — one it shares with scores of other companies nominally based here, which run the full gamut of corporate names from ABC Consulting to Zephyr Entertainment.

And Boots — together with a growing list of other ‘British’ businesses such as Cadbury and Vodafone — has now become the target of furious campaigners protesting at the *decision of several huge companies to shuffle their business bases around the world and thereby avoid tax in Britain.

Over the past fortnight, protesters have besieged outlets of the companies accused of the most aggressive — albeit legal — tax avoidance.

In one demonstration, the flagship store of Topshop in London’s Oxford Street was forced to close its doors on one of the busiest shopping days of the year.

The chain is run by Sir Philip Green, but, perfectly legally, is officially controlled by his wife from the tax haven of Monaco.

Campaigners gathered outside, chanting and blowing whistles. *Others were bodily removed from inside the store by security guards.

Some of the campaigners glued their hands to the inside of Topshop’s *windows. There were 18 arrests.

Protests have been staged across the country: from Birmingham, Bristol, Cambridge and Liverpool to Glasgow, Edinburgh, Portsmouth and Southampton, campaigners have descended on more than a score of premises.

And it is not just Green’s shops that have been in the protesters’ sights. Vodafone has seen its stores picketed and invaded.

While the Coalition Government is forced to slash spending on public services — not to mention raise the ceiling on student tuition fees — private companies contrive to cut the tax they hand to the Exchequer.

The strategies companies use to avoid tax are no doubt quite legal. But there is a widespread feeling that while most hard-working taxpayers have a considerable portion of their income removed by PAYE, there is something immoral about businesses that can employ expensive accountants to find increasingly complicated ways of paying less tax.

The Boots example is instructive. The reason for Alliance Boots’ Swiss address in Zug is simple: it has one of the most lenient company tax regimes in Europe.

Its headline rate of corporation tax — the tax on profits — is just 15 per cent, compared with 28 per cent in the UK. Some companies can pay as little as 8.8 per cent. Little wonder that there are more companies registered in Zug than there are inhabitants.

Alliance Boots moved to Switzerland shortly after a £12billion takeover in 2008 by a group headed by Italian businessman Stefano Pessina.

With that takeover — and the shift of legal base to Switzerland — the UK Exchequer lost yet another big corporate taxpayer.

In its final year with its shares quoted on the London Stock Exchange, Alliance Boots declared that its tax bill, excluding ‘one-offs’, was £89million. And now? The Swiss-based Alliance Boots says in its latest accounts that its underlying tax bill was a mere £9million.

The business itself has been prospering: sales and trading profits have consistently grown. But two things have changed since the company was taken over and disappeared from the London stock market.

The move to the low-tax environment of Switzerland has helped. But, crucially, Boots has also been able to declare a far lower level of profits on which taxes are charged.

As part of the takeover, Alliance Boots borrowed almost £9billion from various banks. That debt incurs interest, and interest payments can be offset against profits when calculating the company’s taxable income. A higher interest bill means lower *profits — and less tax to pay.

Boots may be doing well, but the UK Exchequer sees no benefit.

When in Opposition, the then Shadow Chancellor George Osborne muttered privately that if the Tories got into power, he intended to tackle the issue of companies reducing their tax bills by taking on big debts and using interest payments to reduce their declared income. But now, the tune has changed.

This month, the Treasury published what Osborne described as ‘the most significant programme of corporate tax reform for a generation’. And yet it explicitly ruled out the idea of *limiting any company’s ability to *offset debt interest payments against taxable income.

This was a key concession to big business. The head of tax policy at a leading accountancy firm says companies ‘will be breathing a collective sigh of relief’.

In truth, the footloose nature of large corporations means they can play off one country against another, picking and choosing where to make their legal home as they seek the most generous tax regime.

Even companies whose shares continue to be traded in London have moved their legal base elsewhere to reduce their tax burden.

Brit Insurance, sponsors of England’s Ashes cricket team, is legally based in Amsterdam; advertising giant WPP is technically an Irish company. Pharmaceuticals group Shire, global business media firm United Business Media, Experian — which is best known for credit-checks — have all quit Britain.

Wolseley, tracing its origins to the 19th Century and now the world’s largest supplier of building, heating and plumbing supplies, says it will move to Switzerland. The group says it would have saved £23million on last year’s tax bill had it already made the move.

Certainly, successive governments have tried to make Britain an attractive home for business. In 1984, the UK levied corporation tax at 52 per cent. By 1996, it had fallen to 33 per cent. It is now 28 per cent and is to be cut to 24 per cent.

But other countries have cut it, too. And in the cold, calculating world of multi-national commerce — in which patriotism counts for nothing — companies will seek out the regime where national Exchequers take the smallest slice.

Many companies do not even feel the need to move wholesale from one country to another in order to exploit nation states’ eagerness to outbid one another in cutting taxes.

Vodafone, the mobile phone giant valued at £88billion, continues to have its HQ in leafy Berkshire, yet much of its profits go through an offshoot in Luxembourg, where taxes are negligible. By last year, more than €15billion of profit had been poured into the Luxembourg company rather than paid directly into Britain, where its tax liability would be greater.

After negotiations with HM *Revenue and Customs, Vodafone has agreed to pay £1.25billion in UK taxes — £800million straight away, plus £450million over five years.

Critics say Vodafone has got off lightly and that this is far too modest a bill — although the Revenue dismisses as an ‘urban myth’ suggestions that the tax the firm should pay is nearer £6billion.

But it certainly appears that Vodafone had expected to pay more: in its 2006 accounts, it earmarked more than £2billion to settle the bill, plus interest.

So how have other huge companies sought to reduce their UK tax burden?

Earlier this year, drugs group AstraZeneca, born out of the break-up of the ICI behemoth 17 years ago, agreed to pay more than £500million to the UK Exchequer following a dispute over ‘transfer pricing’, a device which allows multi-national companies to lower their overall tax bill by making bigger profits in countries with lower taxation rates than they do in *high*‑tax countries.

The British arm of Starbucks has also admitted in its most recent accounts that it was ‘in discussion’ with HM Revenue and Customs over transfer pricing.

As we have seen, over the past two weeks, Vodafone has been a principal target of groups campaigning against tax avoidance.

The other company very firmly in the spotlight has been Sir Philip Green’s retail empire of 2,300 shops, which embraces Topshop, Bhs, Dorothy Perkins and Evans. After Marks & Spencer, Green’s group is Britain’s second-largest clothing retailer.

So why has Green been the focus of such anger given that he is a UK tax resident?

The answer is that although he runs his retail business, Green does not actually own it. Instead, company accounts say it is controlled by Green’s family and headed by his wife Cristina.

This distinction is key, for while the company does pay corporation tax in Britain, Cristina (Tina for short) has lived in the tax haven of Monaco for 12 years.

For more than a decade, she, not her husband, has featured as being behind controlling stakes in businesses run by Green — Owen and Owen and Mark One, and more recently Bhs and Topshop’s parent Arcadia. By 2003, she had firmly established her status as not living in Britain for income tax purposes.

In 2005, the company through which Arcadia is controlled famously paid out a huge £1.14billion dividend to a Jersey company of which Tina Green was the only director. Company records say that control was — and is — in the hands of 'CS [Cristina] Green and her immediate family'.

No tax was payable because Tina Green was resident in Monaco, saving the family at least £285million. But a Daily Mail investigation shows that this tells only part of the story.

Between 2002 and 2004, Bhs paid dividends totalling £423million. *Virtually all of these went to offshore companies linked to Green’s wife. But no tax was paid on dividends to these companies.

Had Tina Green been living in *Britain, the tax bill would have been at least £100million. *

Furthermore, the dividends from both Bhs and Arcadia were possible in part because the companies increased their *borrowing to fund the payouts.

That meant higher interest bills on their debts. And that, once again, meant that, in turn, the companies reduced their taxable UK profits — and thus faced smaller corporation tax bills.

On top of this, Bhs has done business with Carmen Properties, a firm based in the tax haven of *Jersey and controlled by the Green family.

In 2001, Bhs sold a clutch of its stores to Carmen for £106million. Carmen thus became Bhs’s landlord, and over the subsequent seven years received £81million in rents, providing a further source of income for the Green family. It also reduced Bhs’s profits, thus cutting its tax bill.

Exactly how big was the tax *saving to the Green family from the Carmen deal? It is impossible to say: that would depend on Carmen’s costs, including the interest on any loans it took out to buy the stores.

But what is clear is that in total, offshore companies linked to Green and his wife have received fully £1.8billion since 2000, and, at the very minimum, there is a further £250million to come by 2019. In total, the Greens’ tax saving is at least £400million.

That said, last year Arcadia paid £70million in UK corporation taxes.

Within the past fortnight, there have been further revelations that have stoked the ongoing tax *controversy in Britain. The American food giant Kraft, which bought Cadbury for £11.5billion earlier this year, is embarking on what is euphemistically called ‘restructuring’ of the confectionery company.

During the tussle for control of *Cadbury, the U.S. group promised that if it was successful in the takeover, it would keep open a factory near Bristol that was threatened with *closure. Once the takeover went through, Kraft reneged on that promise and said it would close the factory anyway, with the loss of 400 jobs.

Now, it has emerged that Kraft plans to change the way Cadbury does business in a move that means it will avoid paying tens of millions in UK tax. Much of Cadbury’s profit will go to Switzerland — where Kraft already has its European HQ — rather than the UK.

How much are we talking about? Last year, Cadbury paid taxes of almost £200million

Naturally, the plans by Kraft *(corporate slogan ‘Make today delicious’) has fuelled the ire of tax protesters.

Even former Business Secretary Lord Mandelson voiced his *misgivings, describing it as ‘the beginning of a slippery slope’.

But there is a piquant irony in his lordship’s public disquiet. Mandelson is currently setting up a business consultancy firm, Global Counsel. And which company is giving financial backing to the new venture? Marketing group WPP which moved to Ireland last year to cut its tax bill.

So the shameless strategy of tax avoidance continues in the world of big business, and the losers are the millions of hard-pressed taxpayers who are left to take up the slack.

Topshop and Vodafone will have repaired the shop windows that were smashed in the riots last week. Their reputations may take rather longer to mend.
http://www.dailymail.co.uk/news/art...shore-denying-UK-exchequer-100s-millions.html

From http://www.vodafone.com/content/index/press/press_statements/statement_tax.html

Q & A

1. What is the basis of the £6 billion number being quoted?

We do not know how this number was arrived at. HMRC has said that it is an “urban myth”.

2. Did Vodafone originally anticipate £2.2 billion in tax for the Mannesmann transaction?

No. Vodafone has never believed that there was any tax due from these arrangements and has repeatedly said so publicly. The arrangements were commercial and were not intended to avoid UK tax. But the application of Controlled Foreign Company (CFC) legislation is complex, and in such circumstances it is not unusual – and in line with relevant accounting rules – for companies to make a provision in case of future liability. The £2.2 billion provision made in this case reflected the complexity of the legal matter.

3. By what means did Vodafone obtain a lower tax settlement?

In the July 2010 agreement HMRC and Vodafone agreed to settle all enquiries relating to certain ‘controlled foreign companies’ for £1.25bn after an exhaustive and rigorous examination of all the facts and circumstances and intensive negotiations that tested all the arguments of both parties.

4. Why did HMRC allow Vodafone to pay only £1.2 billion in tax, instead of £2.2 billion?

We do not speak for HMRC, but they have issued a statement which says: ‘We cannot comment on the detail of the settlement but we can confirm that it was reached by HMRC following a rigorous examination of the facts and an intensive process of negotiation that tested the arguments of both parties. As a result it was agreed that Vodafone’s liability was £1.25bn and at no point was a liability greater than that established.”

5. If Vodafone felt it had no liability why did it agree to pay £1.25 billion?

After rigorous negotiations with HMRC Vodafone decided to pay £1.25 billion to settle the matter to bring nearly 10 years of litigation and consequent uncertainty to an end.

6. Why was the transaction carried out through a Vodafone Luxembourg subsidiary rather than through the UK?

Vodafone does business in Europe, the Middle East, Africa, Asia Pacific and the United States through subsidiary companies, joint ventures, minority investments, and business partnerships, which are held and financed by some of Vodafone's overseas companies, including those established in Luxembourg and elsewhere.

7. Is it true that Vodafone's Head of Tax, John Connors, worked at HMRC until 2007? Was he responsible for the negotiations with Vodafone whilst working for HMRC?

Vodafone’s Director of Tax Strategy and Policy, John Connors, was formerly a tax inspector and until early 2007 a Senior Civil Servant at HMRC. At no point whatsoever in his career at HMRC was he responsible for any enquiries or negotiations with Vodafone. As a former Senior Civil Servant, his employment at Vodafone was subject to the usual Cabinet Office clearances.

8. Is it appropriate for Andy Halford to advise the UK government on tax policy after this agreement has been reached?

It is for the Treasury to decide who is best placed to advise on tax and competitiveness. The Business Forum on Business Tax and Competitiveness is a collection of representatives from government, industry and academia. The agreement reached with HMRC has no bearing on the input Andy can bring to this forum. http://www.hm-treasury.gov.uk/tax_forums_business_tax_competitiveness.htm

9. Is the HMRC/Vodafone tax settlement related to George Osborne's recent visit to India to lobby on behalf of Vodafone India in relation to its tax bill there?

There is no link at all between the agreement between HMRC and Vodafone and the Chancellor of the Exchequer’s visit to India.

10. Is this the same issue as the dispute in India?

No. The Indian Tax authorities are claiming tax from Vodafone on the gain that was made by the Hutchison Telecom International Group when Vodafone acquired Hutchinson Essar. Vodafone decided to go to the Indian courts to resolve the relevant legal questions, as the interpretation of Indian law on which the Indian Tax authorities are relying is without precedent in India.

11. How many Vodafone stores were closed across the UK over the weekend by the protest action?

A small number of stores were affected, to varying degrees - some remained open, some reopened after a couple of hours and some remained closed for longer.

Statement 22 October 2010
Vodafone takes corporate responsibility very seriously and in that regard does meet its tax obligations in the countries in which it operates. Under the terms of an agreement with HMRC earlier this year, Vodafone will pay a sum of £1.25bn to settle a case concerning 'Controlled Foreign Companies' which was agreed after a full and rigorous examination of the facts and circumstances by HMRC, followed by intensive and tough negotiations about the complex legal issues involved. It is incorrect to suggest that there was an outstanding tax bill of £6bn, as this was never the case.

.

..

Just found this video, some guy in the heart of it all with his own camera. Creased at some of the stuff he's shouting 21 mins in

[ame="http://www.youtube.com/watch?v=eQdYxXyUJkQ&feature=player_embedded#"]YouTube - The Battle for Parliament Square - Student Riots 2010 London[/ame]!

Ah, the old global warming excuse from the government again. I guess the students will all feel very ashamed of their actions now!... as the cuts were really for windmils Windmills my arse, for the fucking tory's xmas & new year parties more like