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View Full Version : Margaret Hodge - how does she get away with it?


Shaggy Sheep Driver
24th Jan 2014, 10:00
There's been a bit of news from Davos that Labour's 'anti-business' image (threatening to fix fuel prices, for instance) is already driving investment away from UK. I think that's probably correct - it's like erecting a big banner over UK saying "if you invest here the gov might well step in and meddle with your business model", and there's evidence that as a result energy companies are investing elsewhere instead of UK. This at a time when investment in nuclear power etc is sorely overdue (bluddy windmills won't replace closing coal power stations and closing first generation nuclear).

But the other thing is.... Margaret Hodge and her 'inquisitions' are also driving away investment. I watched a few of those and I thought "why do those guys sit there and just take this carp?". She berates business leaders for 'not paying enough tax', yet each and every one of them has paid all the UK tax the law demands. She's like a landlady who sets the rent at 1000 a month then shouts at tenants for not paying more than that!

Why do those guys just sit there and take it from her, instead of standing up and pointing out that they DO NOT OWE ANY MORE UK TAX!

If these companies have paid all the tax UK law demands (and they have), yet the gov thinks they should pay more, then the gov should change the tax laws! Why does she think large companies pay tax accountants other than to (quite legally) minimise the company's tax bill?

Andy_S
24th Jan 2014, 10:05
She berates business leaders for 'not paying enough tax'

Has she berated herself? She's got form when it comes to tax avoidance.....

Shaggy Sheep Driver
24th Jan 2014, 10:07
Tax avoidance is not only legal, it's the taxpayer's duty to excercise it (hence the employment of tax accountants). Tax evasion, however, is illegal.

Bronx
24th Jan 2014, 10:38
it's the taxpayer's duty to excercise it
Please explain.

Absolute lawful right, I can understand.
Why duty? :confused:

charliegolf
24th Jan 2014, 10:44
The PAC and other select committees- what is their legal standing? Are people 'summoned' to them under the law?

I often watch the snippets on tv, and am certain that, had one of the Hodge types ever spoken to me that way, I would have simply said, "Keep a civil tongue in your head or I'm off!"

Why don't they?

CG

sitigeltfel
24th Jan 2014, 10:56
She isn't known as "Hodge the Dodge" for nothing!

SpringHeeledJack
24th Jan 2014, 11:51
How does she do it ? She's in the tribe and very well connected. The juxtaposition from being part of a very wealthy family to prosthelytizing to the electorate about contributing enough to the whole seems to mysteriously and strangely be missing from her intellect. :hmm: Plus ca change....



SHJ

Shaggy Sheep Driver
24th Jan 2014, 12:09
Indeed, but my question is "how does she get away with it". 'It' being the interrogation of law-abiding company leaders. Why don't they stand up for themselves and tell her they have paid all the tax the laws demands them to, and to pi55 off and change the tax laws if she doesn't like the gov's tax take?

Shaggy Sheep Driver
24th Jan 2014, 12:29
She's just been at it again on R4. The presenter asked her about companies who are thinking twice about investing in UK because if they do they fear they will be hauled over the coals by Hodge when they have done nothing wrong, but giving the public the impression that wrong has been done by these companies.

She simply responded as she always does "if Amazon pay less tax that means other have to pay more".

Did the presenter reply "yes Margaret, but Amazon DO pay all the UK tax the law demands - isn't it YOU, the politicians, who are failing here by having inadequate tax law?"

No, he didn't. He just thanked her.

Jeeze, how DOES she get away with it?

awblain
24th Jan 2014, 15:11
Legality is a shifting scene when there's clashing tax legislation.

The existence of accidental cracks and loopholes doesn't make Amazon and Starbuck's experience with tax in the UK something they probably want to shout about to their UK customers.

It's certainly true that legislators need to fix these cracks and loopholes, and that the CEOs are certainly going to dance through them while they can.

Toadstool
24th Jan 2014, 15:12
I know!! How does she get away with being so gorgeous??!! Oops, upon reading the thread, I feel I may have got the wrong gist.

ManUtd1999
24th Jan 2014, 18:44
Indeed, but my question is "how does she get away with it". 'It' being the interrogation of law-abiding company leaders

Why isn't it reasonable to question and bring their tax policy to the public attention? As someone pointed out, most of Amazons/Starbucks/etc customer base won't agree with their methods however legal they are. If the CEOs want to persist with heavy tax-avoidance than fair enough, but they shouldn't expect to keep it a secret as well.

RedhillPhil
24th Jan 2014, 21:14
You might like to ask how she got away with not being charged with complicity in 1990 when, as leader of Islington council she was repeatedly told that children in Islington care home were being systematically sexually abused. She accused the care workers of stirring up trouble and accused the London Evening Standard of gutter press journalism when pressed by them on the matter. Any staff that mentioned this were quickly frozen out or moved on. After several years of investigation and interviews with staff she finally had to admit the stories of a paedophile ring operating in Islington care homes with children there being used to make child pornography films were true and she had suppressed them. So how was she punished?
She was made Minister for Children on 2003 by Tony Bliar.
You really couldn't make it up.

500N
24th Jan 2014, 22:26
I just read her Wiki entry.

Jesus Christ, that has to be one of the most damning entries
I have read of a non criminal.

She is the epitomy of everything I don't like in this type of
lefty, do gooder people.

This caught my eye.
"Privacy International awarded Margaret Hodge the 2004 Big Brother Award for "Worst Public Servant" for her backing of controversial initiatives including the Universal Child Database. At a keynote speech to the Institute for Public Policy Research on 26 November 2004, Hodge strongly defended the idea of greater state regulation of individuals' choices, stating that "some may call it the nanny state but I call it a force for good".

:ugh:

defizr
24th Jan 2014, 22:45
":
it's the taxpayer's duty to excercise it
Please explain.

Absolute lawful right, I can understand.
Why duty? "

Public companies have a duty to their shareholders (owners) to maximise their profits. It's the law!

Shaggy Sheep Driver
24th Jan 2014, 23:34
Why isn't it reasonable to question and bring their tax policy to the public attention? As someone pointed out, most of Amazons/Starbucks/etc customer base won't agree with their methods however legal they are. If the CEOs want to persist with heavy tax-avoidance than fair enough, but they shouldn't expect to keep it a secret as well.

Because they are totally legal, and if they paid more tax than they should that would not only be illogical, but under company law it would be illegal! The shareholders could sue them!

Hodge is grandstanding with no basis whatsoever because she thinks it makes her look good (to DM readers, it does!). In fact what she is doing is putting off much needed corporate investment in UK. What businesses want is to get on with doing business. Daily Mail readers being convinced the likes of Amazon and Starbucks are reneging on their tax liabilities when THEY ARE NOT they can do without. They'll go invest in, say, Germany instead.

So her totally unjustified self-aggrandising ire is costing you and me real money! That pi55es me off!

ManUtd1999
25th Jan 2014, 00:14
Because they are totally legal, and if they paid more tax than they should that would not only be illogical, but under company law it would be illegal! The shareholders could sue them!
I'm not doubting that they're totally legal. My point was that the public should be aware of the lengths they go to minimise the tax bill.

Daily Mail readers being convinced the likes of Amazon and Starbucks are reneging on their tax liabilities when THEY ARE NOT they can do without. They'll go invest in, say, Germany instead.
This is a bit off topic, but what sort of benefit do we as a country get from Amazon/Starbucks doing business and then paying close to 0 tax anyway? Jobs I guess but in cases like Starbucks where the company is not particularly specialised/high-tech the jobs wouldn't just disappear, other companies would fill the gap. If Starbucks shut down a few London cafe's in protest I'm sure other brands and local businesses (a much better option IMO) would happily take over.

Dr Jekyll
25th Jan 2014, 08:39
This is a bit off topic, but what sort of benefit do we as a country get from Amazon/Starbucks doing business and then paying close to 0 tax anyway? Jobs I guess but in cases like Starbucks where the company is not particularly specialised/high-tech the jobs wouldn't just disappear, other companies would fill the gap.

You appear to assume that the purpose of business is to pay tax. The customers obviously get some benefit or they wouldn't use it, other companies are welcome to compete if they wish.

Anyway, I'm off into town where I will get the benefit of a coffee in the outlet of my choice, then get some further benefit from going to the library despite the library not paying any tax at all.

G&T ice n slice
25th Jan 2014, 08:56
There are a whole bunch of scams available to multinational companies

there's the "transfer pricing" scam - (usually only used with physical goods) by which the product is purchased, by a wholly-owned "distribution" arm, from the wholly owned "producer" arm, with only a minimal profit accruing to the "producer". The wholly owned "retail" arm then purchases the product from the "distribution" arm which results in the "distribution" arm racking up immense profits. The "retail" arm then sells to the public and maybe, just maybe makes a profit.
Naturally the "producer" arm is in country "A", the "distribution" arm is in country "B" - usually a tax-haven - and the "retail" arm is in country "C". There is a paper-trail that shows that exactly this happened, but in fact usually the "distribution" arm may be just 1 or 2 people, or indeed no-one at all...

There's the "hugely expensive intra-company loan" by which the operation in country "C" apparently "borrows" capital from the "finance arm" at unbelieveable rates of interest, along with various "fees". The "finance" arm is in country "B" - usually a tax-haven.

There's the "unbelieveable head-office overhead" by which the local operation in country "C" is (on paper) apparently "reporting to" a "regional group management office" - amazingly located in country "B" which is a tax-haven - and the local operation in "C" has to pay the "regional etc" office in "B" for all the usual overheads, such as marketing, computer systems etc etc etc.

And so it goes on, all "legal" and all of it pretty well fictitious (read Pirvate Yee for stuff about a major mobile fone operator)

Sir Niall Dementia
25th Jan 2014, 09:13
A quick check of her Wiki page reveals a third class degree in economics from the LSE, says a lot really.........


And on a purely personal note she truly is as ugly as a prostitutes t###!

racedo
25th Jan 2014, 09:21
Barking MP.........................yup this is the MP for Barking, so appropriate.

Ask Margaret Hodge how horrors can hide - Telegraph (http://www.telegraph.co.uk/comment/columnists/jennymccartney/3555653/Ask-Margaret-Hodge-how-horrors-can-hide.html)

Shaggy Sheep Driver
25th Jan 2014, 09:30
I'm not doubting that they're totally legal. My point was that the public should be aware of the lengths they go to minimise the tax bill.

What bit of 'they have to by law' don't you understand?

And everyone with at least half a braincell will minimise their tax bill.

500N
25th Jan 2014, 09:31
" A quick check of her Wiki page reveals a third class degree in economics from the LSE, says a lot really........."

Yes, I noticed that.

(not that I would have got any better :O)

perthsaint
25th Jan 2014, 09:41
Tax Research UK Companies do not have a legal duty to maximise profit or to avoid tax (http://www.taxresearch.org.uk/Blog/2013/01/07/companies-do-not-have-a-legal-duty-to-maximise-profit-or-to-avoid-tax/)

awblain
25th Jan 2014, 09:46
They don't, certainly "legally", but their earnings are inspected quarterly by their owners, and the leaders tend to be rewarded if profits rise. Since taxes lead to a reduction in earnings per share, avoiding taxes is a clear corporate goal. This isn't a bad thing - not having credible and enforceable tax treaties is.

Shaggy Sheep Driver
25th Jan 2014, 09:47
The nitwit that wrote that blog seems to be confusing tax evasion, which is illegal ('tax cheating', he calls it) with tax avoidance, which is very much the duty of the company and indeed the individual.

It is the basis of tax law that there is no 'natural justice', no 'fairness'. If the law says you owe 'X', then you owe 'X'. The other side of the equation is that you should ensure you only pay 'X', and not '>X'.

perthsaint
25th Jan 2014, 10:23
The "nitwit" who writes that blog is one of the most respected tax practitioners in the UK. His views are of somewhat greater import than those who know nothing about tax.

Imposing a duty to avoid tax on companies would be an absurdity which is why it will never happen. There are plenty of companies in the UK which maximise their UK tax liabilities and are happy to do so.

ATNotts
25th Jan 2014, 10:26
I'm sorry to offer up an alternative point of view to the "Hodge bashing" ones, but if I have to pay my income tax, and small employers in UK have to cough up their's, then why should Amazon, Starbucks et al get away with paying next to nothing, they don't even pay VAT - they just COLLECT IT from us punters and hand it over to HMRC.

Granted, it's the UK government that makes the rules, and they simply use them to their best advantage, and often, probably not in the way that HMG had hoped or intended, but it ain't fair and if Mrs. Hodge and her committee makes some of these multinational execs. feel even slightly uncomfortable, then that's fine in my book.

500N
25th Jan 2014, 10:30
ATN
I'd much prefer she had looked into child abuse when it was her responsibility than worrying about Tax minimization.

The companies are only doing what they can within the law.

Same as people here complain about negative gearing of houses
to off set tax paid, a lot don't like it but hell, it's within the law.

Shaggy Sheep Driver
25th Jan 2014, 10:31
ATNotts, it's far from good that companies behaving entirely legally get lambasted by grandstanding ignoramouses like Hodge. The reasons why have been amply stated already by many in this thread.

If the tax laws are wrong, gov should change them. Shouting at businesses who have done nothing wrong and thereby paining them as 'tax criminals' to the weak minded Daily Mail reader simply pi55es them off, so they invest elsewhere. Which is very bad news for our economy.

Even worse is the simplistic Millipede with his threats to 'fix energy prices'. That's already sent energy investment away from UK if the messages coming out of Davos are to be believed. And of course logically, that's what one would expect, and I suspect Millipede is well aware of it but persists in spouting his populist and harmful message simply to garner votes!

Despicable!

doubleu-anker
25th Jan 2014, 11:05
She's behaving like a menopausal frustrated battle axe.

I bet there has been more than one upholstery change on those seats where the abused sit.

Dr Jekyll
25th Jan 2014, 11:23
Perhaps there is something in the idea of abolishing corporation tax altogether.

perthsaint
25th Jan 2014, 11:28
How will you make up for the loss of 40bn revenue per annum?

Dr Jekyll
25th Jan 2014, 11:49
There is no reason to think scrapping corporation tax would reduce revenues by anything like that amount. Some have calculated that it could actually increase revenues, so it's worth investigating at least.

perthsaint
25th Jan 2014, 11:53
I'd be interested to see those calculations. Got a link?

Dr Jekyll
25th Jan 2014, 12:05
Not offhand, have you got a link to your calculations that almost none of the money currently paid in corporation tax would be taxed as dividends if corporation tax was abolished?

perthsaint
25th Jan 2014, 12:10
I haven't made that calculation, I've merely pointed out that with no CT the annual revenue from CT will drop from 40bn to nil and that shortfall will have to be addressed.

perthsaint
25th Jan 2014, 12:26
Is this what you're referring to?

The effects of abolishing corporation tax | Adam Smith Institute (http://www.adamsmith.org/blog/tax-spending/the-effects-of-abolishing-corporation-tax)

It completely ignores the fact that most recipients of dividends paid by UK companies don't pay further UK tax on the dividends. They're either overseas or tax-exempt vehicles.

Dr Jekyll
25th Jan 2014, 14:42
It completely ignores the fact that most recipients of dividends paid by UK companies don't pay further UK tax on the dividends. They're either overseas or tax-exempt vehicles.

Which is simply not true. I pay tax on dividends, my pension scheme pays tax on dividends, an elderly relative who doesn't earn enough to pay tax still pays tax on dividends since Gordon withdrew the dividend tax credit.

perthsaint
25th Jan 2014, 14:56
Pension schemes don't pay tax.

And if there's no tax how can there be a tax credit?

Keef
25th Jan 2014, 15:05
Pension schemes don't pay tax.

And if there's no tax how can there be a tax credit?

When did that change?

My pension scheme took a caning when Gordon stopped the tax credit on dividends paid on pension investments. It's taxed at "corporation tax" rate going into the scheme, and taxed again under PAYE when I get it. That was entirely Gordon's doing, against the advice of those who knew, and was one of the major contributors to the effective demise of UK company final-salary pension schemes.