George Osborne's family company has paid no tax for seven years

[El Presidente]

It is not illegal to avoid tax only to evade it and if anybody can find a loophole that exploits the system all power to their elbow as it is available to all in the know. Whether or not these loopholes should be closed is another matter entirely

I understand that BG, but given that Gideon OIiver Osborne, who will become the Eighteenth Baronet of Ballentaylor and Ballylemon in the County of Waterford, is the man responsible for closing such loopholes, he could be accused of having a conflict of interest.

As others have said, all the company has done is apply the rules. Whether the rules are equitable is a separate issue.

 

[BigGully]

I havent read it, but I would of thought any high profile politicians, especially if in power and especially in George Osbornes position would early into their tenure sit down with tax experts and clean up their act, to save embarrassment and leaving him a clearer pathway to implement his policies.

 

[Herr Tubthumper]

I'm astounded that this is even a story. I guess most people don't understand how the corporation tax system works and journalists use this to their advantage when making a non-story into a political issue.

Most people probably don't know. But to say they don't/won't understand is unfair. It's not rocket science. If the right wing rags carried this story I'm sure many more would be on Osborne's case.

 

[Bedsex]

I understand that BG, but given that Gideon OIiver Osborne, who will become the Eighteenth Baronet of Ballentaylor and Ballylemon in the County of Waterford, is the man responsible for closing such loopholes, he could be accused of having a conflict of interest.

As others have said, all the company has done is apply the rules. Whether the rules are equitable is a separate issue.

I'm not sure that there are even any loopholes being exploited here. A company will pay corporation tax on its profits, fair enough. For tax purposes, some expenses incurred in calculating those profits are deemed disallowable, such as business entertaining and depreciation on fixed assets. Such expenses are therefore added back in calculating taxable profits. Capital allowances are essentially deductions for depreciation of fixed assets allowable for tax purposes, eg depreciation on capital expenditure on plant & machinery is disallowed, but capital allowances may be claimed in respect of certain plant & machinery. This is usually at a different rate to the depreciation charge, although ultimately you will get full tax relief for eligible items of plant & machinery, this will therefore give rise to deferred tax asses or liabilities (ie if the disallowable depreciation in future accounting periods will be larger than the future allowable capital allowances then you'll have a deferred tax liability- NB deferred tax is purely an accounting concept and doesn't mean that somehow you're deferring tax that is due to be paid now).

If, after deducting all of the allowable expenses (such as salaries) from taxable income a tax loss arises (ie allowable expenses are greater than taxable income) then those losses can be carried back against profits of earlier accounting periods (which could generate repayments of tax) or carried forward against future profits (these losses could be recognised as a deferred tax asset if there are sufficient profits forecast).

I don't think there is anything particularly egregious about any of the above. If you want to tax income rather than profits, then you can simplify the system by introducing a lower flat rate on income, but although this is a much simpler system to administer it is much less 'fair'.

Many years ago you might have even said that the Osborne family company was paying more tax than it needed by paying high salaries rather than paying corporate tax on profits and distributing surplus profits by way of dividend. These days I don't think it makes much difference either way.

 

[Bedsex]

Most people probably don't know. But to say they don't/won't understand is unfair. It's not rocket science. If the right wing rags carried this story I'm sure many more would be on Osborne's case.

Sorry, injudicious choice of language on my part. I would have been better stating that most people don't know how the corporate tax system works rather than not understanding it. It's difficult to explain concisely (the UK tax legislation is collectively one of the largest pieces of legislation in the world, I believe). I've tried to summarise how the basics work in my post above.

 

[El Presidente]

I'm not sure that there are even any loopholes being exploited here. A company will pay corporation tax on its profits, fair enough. For tax purposes, some expenses incurred in calculating those profits are deemed disallowable, such as business entertaining and depreciation on fixed assets. Such expenses are therefore added back in calculating taxable profits. Capital allowances are essentially deductions for depreciation of fixed assets allowable for tax purposes, eg depreciation on capital expenditure on plant & machinery is disallowed, but capital allowances may be claimed in respect of certain plant & machinery. This is usually at a different rate to the depreciation charge, although ultimately you will get full tax relief for eligible items of plant & machinery, this will therefore give rise to deferred tax asses or liabilities (ie if the disallowable depreciation in future accounting periods will be larger than the future allowable capital allowances then you'll have a deferred tax liability- NB deferred tax is purely an accounting concept and doesn't mean that somehow you're deferring tax that is due to be paid now).

If, after deducting all of the allowable expenses (such as salaries) from taxable income a tax loss arises (ie allowable expenses are greater than taxable income) then those losses can be carried back against profits of earlier accounting periods (which could generate repayments of tax) or carried forward against future profits (these losses could be recognised as a deferred tax asset if there are sufficient profits forecast).

I don't think there is anything particularly egregious about any of the above. If you want to tax income rather than profits, then you can simplify the system by introducing a lower flat rate on income, but although this is a much simpler system to administer it is much less 'fair'.

Many years ago you might have even said that the Osborne family company was paying more tax than it needed by paying high salaries rather than paying corporate tax on profits and distributing surplus profits by way of dividend. These days I don't think it makes much difference either way.

I know a little about the tax system, so don't have an issue with that Osborne and Little are doing. It's no different to any other company of similar size in the same situation.

I'm more disappointed about Osborne's craven sycophancy towards non-doms, transfer pricing abuses, shell companies buying up UK properties as a means of money laundering, inheritance tax relaxation at a time when tax credits are being reduced, and the failure to rein in the excesses of the financial services sector.

 

[El Presidente]

I havent read it, but I would of thought any high profile politicians, especially if in power and especially in George Osbornes position would early into their tenure sit down with tax experts and clean up their act, to save embarrassment and leaving him a clearer pathway to implement his policies.

I'm not defending Gideon, (even though he's my constituency MP) but he's not responsible for the activities of his relatives surely?

 

[Doc Lynam]

im sure you have at least 50 examples of UK firms with accounts going back over the past 7 years to prove your point is true.

50 is a tough ask out of thousands

how about you just list 10 UK firms with all their previous accounts for the last 7 years

You are right of course [MENTION=21401]pastafarian[/MENTION] Corporation Tax in the Uk is working fine.

http://www.bbc.co.uk/news/world-europe-jersey-34638877

http://www.bbc.co.uk/news/business-34504474

http://www.irishtimes.com/business/...-report-full-scale-of-tax-avoidance-1.2416832

http://www.theguardian.com/business...orms-will-end-era-of-aggressive-tax-avoidance

http://www.thisismoney.co.uk/money/...ise-just-40bn-year-10-total-tax-revenues.html

 

[pastafarian]

Most people probably don't know. But to say they don't/won't understand is unfair. It's not rocket science. If the right wing rags carried this story I'm sure many more would be on Osborne's case.

ill try again,you seem reluctant to answer

perhaps you could explain why you would like the practice of UK firms using historic losses and capitol allowances to offset tax on profits abolished

what benefits do you see from abolishing this practice? Im sure you have a large list

(of course remembering we are talking about the UK firms here)


you called me a twit on this economic thinking,perhaps you would like to say why?

 

[Bedsex]

I know a little about the tax system, so don't have an issue with that Osborne and Little are doing. It's no different to any other company of similar size in the same situation.

I'm more disappointed about Osborne's craven sycophancy towards non-doms, transfer pricing abuses, shell companies buying up UK properties as a means of money laundering, inheritance tax relaxation at a time when tax credits are being reduced, and the failure to rein in the excesses of the financial services sector.

I agree that the bigger area of debate is around the issues you have mentioned, BEPS may see to transfer pricing and other international issues, although with the U.K. CT rate continuing to drop, it is clear that policy is to encourage large businesses to the UK from higher tax regimes and reap the benefits through income tax and social security.

However, the purpose of the article was to cause outrage at how George Osborne's family company was not paying any corporate tax, which is why I think the article is disingenuous.

 

[Nibble]

I'm no fan of Labour, they ****ed us over in their own way. But this Tory government will go down in history as the government that screwed it's citizens over, demonised the poor and dragged the country back to the profiteering, dark days of Thatcher. And we're only six months in. Let's see how many of the Tories on here still stick up for them when they get round to something that affects THEM and not just far away poor people they don't have to see. They are getting closer with their tax credit cuts, won't be long til they get to something you care about. 6 months and this is already their legacy. They should hang their heads in shame.

 

[pastafarian]

You are right of course [MENTION=21401]pastafarian[/MENTION] Corporation Tax in the Uk is working fine.

http://www.bbc.co.uk/news/world-europe-jersey-34638877

http://www.bbc.co.uk/news/business-34504474

http://www.irishtimes.com/business/...-report-full-scale-of-tax-avoidance-1.2416832

http://www.theguardian.com/business...orms-will-end-era-of-aggressive-tax-avoidance

http://www.thisismoney.co.uk/money/...ise-just-40bn-year-10-total-tax-revenues.html

this is what i expected
you have deviated into firms exploiting EU rules

give me 50 or 10 examples of UK firms with past 7 year records as requested "The more profitable the company the less tax you pay"

that was your original statement

 

[Nibble]

I know a little about the tax system, so don't have an issue with that Osborne and Little are doing. It's no different to any other company of similar size in the same situation.

I'm more disappointed about Osborne's craven sycophancy towards non-doms, transfer pricing abuses, shell companies buying up UK properties as a means of money laundering, inheritance tax relaxation at a time when tax credits are being reduced, and the failure to rein in the excesses of the financial services sector.

This is the issue I think, regarding your first point here . This government reduces everyone to a "well if they're getting away with it, I'll have a go". Except of course people on benefits, they are not allowed to get away with anything. Or working families on tax credits because the wages are too low for the cost of living, they shouldn't have the benefit.

 

[pastafarian]

I'm no fan of Labour, they ****ed us over in their own way. But this Tory government will go down in history as the government that screwed it's citizens over, demonised the poor and dragged the country back to the profiteering, dark days of Thatcher. And we're only six months in. Let's see how many of the Tories on here still stick up for them when they get round to something that affects THEM and not just far away poor people they don't have to see. They are getting closer with their tax credit cuts, won't be long til they get to something you care about. 6 months and this is already their legacy. They should hang their heads in shame.

as you have said you yourself run a business

do you do all your own tax affairs or do you employ a professional to limit your liability?

 

[BigGully]

I'm no fan of Labour, they ****ed us over in their own way. But this Tory government will go down in history as the government that screwed it's citizens over, demonised the poor and dragged the country back to the profiteering, dark days of Thatcher. And we're only six months in. Let's see how many of the Tories on here still stick up for them when they get round to something that affects THEM and not just far away poor people they don't have to see. They are getting closer with their tax credit cuts, won't be long til they get to something you care about. 6 months and this is already their legacy. They should hang their heads in shame.

Who are these poor people, its all in the public domain so we can then make a considered judgement if you care to look, or are you so wealthy you look down on others that are say just raking in £25 000 per annum whilst not working as poor peasants, yes I said raking so yes your 'poor' people should be made accountable, working 16 hours a week doesnt make you hardworking, yes make companies pay a living wage, jail some bankers and reasonably close loopholes on corporate tax avoidance whilst leaving a dynamic business friendly environment, but stop all this claptrap about poor people.

 

[Herr Tubthumper]

I'm not defending Gideon, (even though he's my constituency MP) but he's not responsible for the activities of his relatives surely?

I blame the parents.

 

[Nibble]

as you have said you yourself run a business

do you do all your own tax affairs or do you employ a professional to limit your liability?

Well, I'm, not going to discuss my personal finances with anyone on here, least of all someone like you but we run a few not for profit strands of the business and community/school projects, suffice to say we get some breaks but are also very closely monitored.

 

[Bevendean Hillbilly]

I can't stand Osbourne. He has cold, dead eyes. A real satanic influence.

 

[Triggaaar]

True. But how much fight is Osborne likely to put up to close his own loop hole which he benefits from?

That's a fair question - and same goes for Cameron. But would Labour do anything about it? I'd have voted for them if they would, but they didn't have any plan to deal with those avoiding tax. These loopholes were being used when Labour was in power, just 5 years ago, and they did nothing. I really hate how companies are able to not pay tax here, but as yet no party is offering an alternative, so it doesn't affect my vote.

 

[Nibble]

Who are these poor people, its all in the public domain so we can then make a considered judgement if you care to look, or are you so wealthy you look down on others that are say just raking in £25 000 per annum whilst not working as poor peasants, yes I said raking so yes your 'poor' people should be made accountable, working 16 hours a week doesnt make you hardworking, yes make companies pay a living wage, jail some bankers and reasonably close loopholes on corporate tax avoidance whilst leaving a dynamic business friendly environment, but stop all this claptrap about poor people.

I think you have comprehensively misunderstood my entire post.