Posts Tagged ‘Non-Dom Status’

Private Eye on More Tax Avoiding Press Barons

March 18, 2016

I found this feature on in Private Eye’s issue for the 17th-30th April 2015 on how Yevgeny Lebedev, the former owner of the Independent, the Barclay twins, who own the Telegraph and Lord Rothermere all use their non-dom tax status to avoid paying British tax.

Non-Dom Press Barons
Street of Sham

So consuming was the Tory press’ rage at Ed Miliband’s plan to make Russian oligarchs and gulf petro-billionaires in London liable for the same taxes as British citizens, its hacks forgot to the declare their interest.

“London backlash over Ed’s non-dom attack,” boomed the front-page of the London Evening Standard, as if a mob had descended on Labour HQ to defend London’s much-loved oligarchs and hedge fund managers. “Attacking non-doms could backfire on us,” continued an editorial inside. Sarah Sands, the Standard’s Uriah Heepish editor, did not risk her career by saying who the “us” included – namely her boss, Standard proprietor Evgeny Lebedev, the Russian who last year dodged the Eye’s repeated questions of his own domicile.

Silence infected the Telegraph too, where not one of the reporters who warned that Labour’s “cataclysmic” decision would drive away “tens of thousands of entrepreneurs and business leaders” mentioned that their owners, the weirdo Barclay twins, reside in Monaco and the Channel Islands to avoid British tax.

Instead they quoted James Hender, head of private wealth at Saffery Champness accountants, who warned that the rich may leave. The Telegraph didn’t tell its reads that Hender boasts of his long experience ensuring that “the most tax efficient strategies are adopted for non-UK, situs assets” for his non-dom clients.

It was the same at the Mail, which failed to declare that its owner, 4th Viscount Rothermere, is treated by the tax authorities as a non-dom. And at Sky, political editor Faisal Islam reported that “Baltic Exchange boss Jeremy Penn slams Labour non-dom plans” without declaring that his owner, Rupert Murdoch, does not pay UK tax and that Penn acts for super-rich shipping owners.

Jolyon Maugham QC, who has advised Labour and the Tories on tax reform, tells the Eye that any reader sill enough to believe the Tory press and tax avoidance industry should look at what they said in 2008, when Labour introduced the first levies on non-doms.

Back then the Mail then said the central London property market would crash as non-doms sold up and moved to Switzerland. In fact, between Labour introducing the levy and 2014, prime central London property prices rose 41 per cent. At the end of 2014, Knightsbridge estate agent W.A. Ellis said 54 per cent of sales were to overseas buyers.

The Mail was equally certain the City would suffer. On 8 February 2008 it cried that the levy “risks the City’s future”. The British Banking Association warned of “a devastating blow”. The Telegraph of 12 February 2008 said that “the country’s wealthiest individuals are being bombarded with leaflets and letters explaining how easy it would be to relocate to Switzerland, Monaco and a host of other countries”. Not to be outdone, Mike Warburton, senior tax partner at accountants Grant Thornton, said the levy was the “final straw”. If a word of this had been true, there would be no non-doms left for Miliband to tax. As it is, there are 115,000 because, as Maugham says, London remains “a very nice place to live, if you’re wealthy. And that won’t change.” Or as the Financial Times put it: “The many advantages of London as a financial centre do not dissolve simply because of a change in a hitherto generous tax treatment of resident non domiciles.”

The pink ‘un has only recently realised the iniquity of the non-dom rule, with an editorial last month calling for its abolition. Editor Lionel Barber modestly claims some credit for Miliband’s stance. But as editor for almost a decade, why was he so late to the party? Surely not because, until 2013, FT owner Pearson was run by US-born Dame Marjorie Scardino, who would certainly have qualified for non-dom status and whose London flat, the Eye revealed, was owned via an offshore company?

So there you are. Fleet Street’s extremely rich proprietors, with the exception of the Financial Times, take the view that, in the words of the ‘Mayflower Madam’, the brothel owner arrested for tax evasion in New York now over a decade ago, paying tax is only for the ‘little people’. And they have no qualms about getting rich, while shifting the tax burden on to the poor and demanding low wages and zero-hours contracts. All the while proudly declaiming their patriotism, like the Sun, owned by Rupert Murdoch, resident in America. So much for real patriotism.

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Daily Mail Sneers at Brand and Miliband – Bit of Fear over Paying Tax, Perhaps?

May 6, 2015

Last week, Russell Brand, the former anarchist firebrand, met Ed Miliband. For Miliband at least, the meeting was successful, in that Brand has abandoned his stance of urging people not to vote, to urging them to vote Labour instead. It’s left some on the radical Left feeling betrayed, as Brand has compromised his ideological purity by supporting a party, which they see as still retaining the New Labour contempt for those on welfare and which still intends to implement something like a workfare scheme. See, for example, Johnny Void’s recent post.

If it’s upset some on the Left, it also seems to have rattled the Right. Whatever you make of Brand as a comedian, and millionaire actor coming from an affluent middle class background, Brand is articulate and can make some very cogent, sharp points about the state of British and international politics. I’ve reblogged some of his posts from The Trews, his video series on Youtube where he analyses and deconstructs the news and the serious and not-so-serious issues of the day. He has made some very good criticisms of the corrupt state of British politics, the failure of current capitalism to provide most of the people of this country with the state support and welfare benefits they need, the increasingly harsh inequalities thrown up by the class system, and racism and the vilification and marginalisation of ethnic minorities, including Muslims.

And some of this seems to have struck home. On the cover of the Daily Mail one day last week was a picture of Brand with Miliband. Underneath was the headline ‘Would you trust this clown to run the country (and we don’t mean the one of the Left’.

Miliband sent a shiver of horror down the collective spines of Britain’s super-rich last week when he announced that he was going to end the non-dom tax bracket, which allows some of the extremely rich resident in Britain to avoid paying tax as they are technically resident in another country.

Many of those not paying British tax are fleet street editors and proprietors.
Like one Viscount Rothermere, the owner of the Daily Mail.
Rothermere junior inherited his non-dom status from his father, who spent most of his life in Paris. Harmsworth fils, however, seems pretty well resident in this country, especially as he’s building a multi-million pound stately home for himself in the country estate he purchased. He funded this through a complex series of loans, rather than pay for it himself directly, as this allows him to use his non-dom status to avoid paying tax on it.

And Brand has tried to tackle him on his refusal to pay tax. In one of the sequences in Michael Winterbottom’s documentary exposing the corrupt politics of modern corporate Britain, The Emperor’s New Clothes, Brand is shown turning up outside Rothermere’s stately home, and pressing the button with the communicator to get to talk to Rothermere about his non-dom tax status. Not surprising, they don’t let him in, and Brand stays shut out.

Obviously, Rothermere’s very worried about the possible ending of this tax dodge, and the personal attention he received from the abortive visit by Brand. Hence the personal abuse and vilification.

Rothermere and his editor have no right telling anyone how to vote in this country. They don’t pay British tax, and have absolute contempt for those, who depend on welfare benefits provided by the state – the unemployed, working poor, the sick, the disabled. Their attempts to rubbish Brand, Miliband and the rest of the left is merely self-serving propaganda, and should be treated with the contempt it deserves.

And absolutely no-one should take seriously their demands to vote Tory. Rothermere and his fellows welcome their programme of tax cuts, because it will leave them richer, and the rest of us poorer.

Private Eye on the Non-Dom Press Barons of Fleet Street

April 22, 2015

Ed Miliband’s announcement a few weeks ago that he would end non-dom tax status was greeted with howls of derision from the right-wing Tory press. The Evening Standard, Torygraph and the Heil all claimed that if the various millionaires resident in Britain, who weren’t paying their taxes here, were forced to do so, then they would all leave en masse.

As Private Eye pointed out in last week’s issue, these paper’s stance has hardly been disinterested. Their owners are all non-doms. Evgeny Lebedev, the Russian oligarch, who owns the Evening Standard, last year dodged the Eye’s questions on where he pays his tax. The weirdo Barclay brothers, the owners of the Torygraph, are tax exiles in Monaco and the Channel Islands. And the Mail’s Viscount Rothermere is another one. He inherited his non-dom tax status from his father, despite not living abroad and building something that can only be described as a stately home in the south of England.

Sky also decided to join in the criticism, while obviously not mentioning that its owner, Rupert Murdoch, also doesn’t pay tax in Britain. Neither in fact, does Dirty Rupe’s papers, the Sun and the Times, which the Eye revealed a few years ago to be registered abroad for the purposes of corporation tax. So much for the true-blue British patriotism of these papers.

The Eye refuted all this criticism by printing the views of Jolyon Maugham, a QC who has advised both Labour and the Tories on tax policies. Maugham pointed to the similar criticisms levelled at Labour by the papers when the party first started levying taxes on non-doms in 2008. Then the Mail predicted a massive stock market crash, and it, the Telegraph and the British Banking Association all warned that Britain’s millionaires were considering leaving the country. In fact, the opposite was true. By the end of 2014, according to the Eye, about 54 per cent of property sales in Kensington were to foreign purchasers. At the moment, there are 115,000 non-doms in London, because the capital is still an extremely attractive place for millionaires.

The article also points out that the Financial Times also supports the ending of non-dom tax status. They suggest, however, the paper didn’t come out and make its opposition to the tax status earlier because until 2013, it was partly owned by Dame Marjorie Scardino, who would have been entitled to non-dom tax status on her London flat.

Readers of Johnny Void’s blog will know about the problems created in London by the presence of the global super-rich, and the way they are pushing ordinary working and lower-middle class Londoners out of the city. In a post I reblogged here a few days ago, Mr Void described the appalling destruction of London’s working class and counter- or alternative cultural heritage. Like the historic Black Cap gay bar, Soho, Tin Pan alley, parts of Camden market, and the relocation of St Martin’s school of art. It does seem that the capital’s real, living heritage that has grown up over decades and centuries, is being gutted in order to leave the capital another sterile, homogenous global environment for the planet’s super rich.

This has to be resisted – not just in London, but all over England and the UK. It’s part of a general process throughout Britain where gentrification and the desire to please and attract the wealthy from across the world is destroying working class communities, and the places they live, work, shop and relax across the UK.

The problem isn’t that if Ed ends the non-dom tax bracket, there’ll be an exodus of oligarchs and multi-millionaires, as the Week put on its cover last Friday. The problem is the opposite – that if the power and cupidity of the super-rich isn’t curtailed, they’ll price the poor out of their homes altogether. It’s most acute in London, but if it isn’t stopped, it’ll come to somewhere near you very quickly.

Private Eye on the Tax Avoiders in Cameron’s ‘Business Council’

April 10, 2015

I mentioned in the last post on the Daily Mail’s hypocrisy in demanding that Kraft foods stop avoiding paying British taxes, while its owner, Lord Rothermere, is another tax dodger using the non-dom status inherited from his father. The right-wing press was outraged this week by Ed Miliband’s statement on Wednesday that he was going to end the non-dom tax loophole that allows Rothermere, and others like him, to avoid paying tax. They claimed that it would drive senior businessmen out of the country.

Way back in their issue for the 15th – 29th October 2010 Private Eye published a brief article on the numbers of businessmen avoiding taxes through offshore companies and the like. They were a refutation of Cameron’s continued refrain that ‘we are all in it together’, and that everyone was suffering equally during the recession. They had also benefitted personally from Cameron by being selected for his business council.

David “We’re all in this together” Cameron has chosen a patriotic bunch to sit on his “business council”.

One of them, Martin Sorrell, has already moved his company, advertising group WPP, offshore to avoid tax; while Paul Walsh, of drinks company Diageo, has threatened to do the same.

His company already diverts most of its profits out of the taxman’s grasp, having “offshored” ownership of British drinks brands such as Johnnie Walker. A similar ruse helps drugs giants GlaxoSmithKline avoid millions of pounds of tax, but that hasn’t stopped its chief executive, Andrew Witty, from joining Cameron’s council as well.

Also among the business sages is the man behind a great deal of such dodging over a decade at the top of one of Britain’s biggest beancounters, KPMG, Sir Mike Rake.

The captains of industry will no doubt have been pleased to note the shift in rhetoric on tax dodging from chancellor George Osborne in his party conference speech. Gone was the “immorality” of (legal) tax avoidance that his Lib Dem deputy Danny Alexander had condemned the week before. In a carefully worded speech, Osborne’s ire was conspicuously directed only at illegal “tax evasion”. This gives Britain’s top businessmen – not to mentioned the hedge fund managers and beancounters who have funded the Tories so generously over the last year – plenty of room to squirrel a few billion away while remaining on the right side of Nos 10 and 11 Downing Street.

The attack on the tax evaders is pretty much an attack on Tory donors. It shows that Ed Miliband himself is independent of at least some of the corporate interest that New Labour also competed with the Tories for. and it also shows the deep, self-interest of the Tory party and their mouthpieces in the British press in moaning about the potential loss of income for these extremely rich men.

As Mike has shown again and again on his articles on some of the prize specimens of Tory MPs, many of them, from Jacob Rees-Mogg to education minister Nicky Morgan and the Wicked Witch of the Wirral, Esther McLie, vigorously demand tax cuts for the rich, and the transferal of the tax burden to the poor through VAT.

It’s not enough that the rich should get richer. They want the poor to get poorer. It’s one of the reasons why they should be voted out next May.

Private Eye on Daily Mail’s Hypocrisy over Tax Avoidance

April 10, 2015

Ed Miliband this week announced he was to abolish the non-dom tax bracket, that allows businessmen and others to avoid paying taxes in this country on the grounds they are living abroad. One of the most notorious beneficiaries of this arrangement has been Lord Rothermere, the owner of the Daily Mail. Rothermere inherited his non-dom status from his father, who lived for most of his life in France. The current Lord Rothermere, however, shows every evidence of living in Britain, even building what amounts to his own stately home.

I put up Private Eye’s article on how Rothermere was using his non-dom status to avoid paying tax on his millions. And on Wednesday, the day that Miliband announced his policy, it was by far and away the most popular article on this blog.

It’s almost needless to say that Miliband’s policy was much less popular with the right-wing press, who all harrumphed about how this was going to harm Britain by driving all the non-domiciled rich titans of industry and Lord Rothermere away. Yet Rothermere’s mighty organ, the Daily Mail, has also shown the immense hypocrisy it’s known for by attacking other companies for avoiding UK tax.

In 2010 it launched a campaign against Kraft foods, which Private Eye reported and criticised in a brief article in its issue for the 23rd December.

“If you won’t pay our taxes, we won’t eat your cheese, Kraft.” So runs the Mail on Sunday’s campaign against the US firm that has taken over Cadbury and is transferring ownership of some of Britain’s favourite brands to Switzerland to avoid tax.

Another internationally tax-efficient company of course is the Daily Mail and General Trust, owned through a Bermudan company and a series of offshore trusts so that the principal beneficiary, the “non-domiciled” Lord Rothermere, can avoid tax on his income from the group.

“If you won’t pay our taxes, we won’t buy your paper, Rother5s”, runs nobody’s campaign at all…

The Mail was absolutely right in that Kraft should pay taxes in Britain for profits raised through its British firms. As should the Daily Mail, who, after running this campaign, should keep resolutely silent about Miliband’s campaign to end the non-dom tax breaks.

Vox Political: Mail Lies about Benefit Claimants Again?

January 28, 2015

Tory Lies Drawing

Mike over at Vox Political has the story about the Daily Mail possibly fabricating another piece in order to smear benefit claimants. The Heil claims to have exposed one claimant, Kamram Kam, as a fitness fanatic, who makes no secret that he does not intend to find a job. Except that Mr Kam is an actor, who has appeared in nine films. the article’s Daily Mail caught stirring up hate against benefit claimants with fake story? and it’s athttp://voxpoliticalonline.com/2015/01/28/daily-mail-caught-stirring-up-hate-against-benefit-claimants-with-fake-story/.

This is, of course, another piece of massive hypocrisy coming from Lord Rothermere’s mighty organ, after the Lord himself claimed nom dom status in order to save on taxes that would be owed when building his mighty mansion at Ferne Park in Wiltshire. Never mind the unemployed, Jonathan Harmsworth’s the real scrounger. And as he’s a nom dom, I strongly recommend him for deportation.

From Private Eye: Lord Rothermere’s Non-Dom Tax Scam

January 27, 2015

Ferne House

Ferne House: Lord Rothermere’s home, except when it comes to paying tax

In my last post, I reblogged Tom Pride’s article demanding that on Holocaust memorial day, Lord Rothermere should apologise for his newspaper’s shameful anti-Semitic past. The Daily Mail was notoriously the newspaper that shouted ‘Hurrah for the Blackshirts’ in praise of Oswald Mosley’s stormtroopers in the British Union of Fascists. It also ran articles demanding an end to Jewish immigration, and even praising Hitler himself.

The Rothermere’s tradition of extreme right-wing views and demonization of the poorest and most victimised members of society continues today, with its constant campaigns and vilification against asylum seekers, immigrants, the unemployed and the disabled. As Mr Pride and Johnny Void have documented on their blogs, the Daily Mail has even stooped so low as to claim those reduced to using food banks aren’t really starving, but are simply scroungers.

Not only is this factually wrong, it is a piece of astonishing hypocrisy coming from the multi-millionaire Lord Rothermere. Rothermere is not only stinking rich himself, but Private Eye also revealed in 2009 that he was claiming non-dom status in order to avoid paying tax on his stately home, Ferne House. The story was in their issue for 6th – 19th March, and ran:

At Home with Lord Rothermere
Our Top Tax Man and the Non-Dom Press Baron

If an Englishman’s home is his castle, a sprawling neo-Palladian pile in the rolling Wiltshire countryside might be expected to bring with it full British tax status for the lord of the manor. But not, it seems, when the Englishman in question is an immensely wealthy and powerful press baron who enjoys the protection of the country’s top taxman.

Back in 1999 the young chairman of the Daily Mail and General Trust, the 4th Viscount Rothermere, aka Jonathan Harmsworth, bought a 220-acre estate called Ferne Park as home for his family, then comprising wife Claudia and two children under six.

By 2001 a new Ferne House had been built in the grounds to a £40m design by renowned Palladian-style architect Quinlan Terry. As the latest generation of the Rothermore dynasty expanded to four children by 2004, the Harmsworths had outgrown Terry’s first effort and in August 2006, local council records show, obtained planning permission for “new east and west wings”.

Despite a reported personal fortune of around £800m, Viscount Rothermere turned to his bankers for loans. Last month, under a regulatory amnesty following the well-publicised failure of Carphone Warehouse boss and Tory backer David Ross to declare his use of shares as security for personal loans, Rothermere came clean on his own similar arrangements. It emerged that in December 2006 he had pledged 8m DMGT shares he owned through a trust and DMGT’s Bermudan parent company Rothermere Continuation Ltd. At the time these were worth more than £50m, though DMGT’s announcement of the arrangement stated that this greatly exceeded the value of the loans. It was, however, “small when compared to the Viscount Rothermere’s net worth”.

Borrowing money rather using some of his offshore wealth had one clear benefit for Rothermere, an advantage he owed to his famous father Vere Harmsworth, the 3rd Viscount Rothermere. By living as a tax exile in Paris for most of his life, the 3rd Viscount had become “non-domiciled” for British tax purposes. And just like his hereditary title, this status passed – as a “domicile of origin” – Jonathan when he was born in 1967. A DMGT spokesman would only say the 4th Viscount’s domicile status was “a private matter”.

The principal tax break for a “non-dom” is that overseas income is only taxable when “remitted” to Britain. For Jonathan Harmsworth this has proved immensely valuable, as the hundreds of millions of pounds in DMGT dividends channelled over the years through Bermudan-registered Rothermere Continuation Ltd into trust of which he and his family are beneficiaries have magically become overseas income. Had this money been brought into the UK to pay for the new home in Wiltshire, it would have been taxable; the loan from the bank, on the other hand, would not.

But being a “non-dom” should not be so easy. The archaic status, used in British tax law since the Napoleonic wars, has to be sustained throughout a non-dom’s life by an overriding commitment to another country. This must be demonstrated by such choices as the location of the family home, upbringing of children and a person’s intended final resting place. As Harmsworth looks to have made a permanent family seat on the Wiltshire-Dorset borders, and he and his wife have reportedly become leading figures on the county scene, his non-dom status looks precarious to say the least.

These developments, coup0led with a strong court of appeal win for HM Revenue and Customs on a domicile case last year, proving the importance of where a person is committed to live with his family, unsurprisingly prompted an official re-think of the viscount’s status. Inspectors were busy investigating his media empire anyway, under “Project Mersey”, after the group had earnest itself a place on HMRC’s “high risk corporates” list by undertaking a number of tax avoidance schemes.

According to sources close to the review, the decision of HMRC’s Special Civil Investigation’s section was to launch a full-scale inquiry with a view to withdrawing Harmsworth’s non-dom status, if necessary through the courts. Late last year the plan was approved by HMRC’s solicitors and a high-level strategy board comprising the directors of the department’s Large Business Service, its Anti-Avoidance Group and its central policy unit.

But then the investigation was blocked by HMRC deputy chairman Dave Hartnett, who regularly steps into tax investigations and boasted to a parliamentary committee a year ago of his “board-to-board” engagement with big business.

When Austin Mitchell MP then asked Hartnett “Do [large companies] get a better deal when you get involved?” Hartnett responded “I sincerely hope not.” Viscount Rothermere appears to have got superior treatment, though, as Hartnett pressured HMRC officials to find a “technical” reason for not pursuing the investigation.

Why the HMRC boss should be so keen to let Viscount Rothermere off the hook, saving him several millions of pounds in tax annually, at the expense of the little people, remains a mystery. There is no evidence that the Mail’s political clout – or its editor and director Paul Dacre’s close relationship with Gordon Brown – played a part. Nor is there any indication that the connection between DGMT and HMRC director-general Melanie Dawes, whose remit covers the Large Business Service, had any bearing on the decision. Dawes, a career Treasury civil servant said by some to have been drafted into HMRC to keep an eye on the taxmen, just happens to be married to Benedict Brogan, who until last month was political editor of the Daily Mail.

PS: The Eye and others have long pointed ot the numbers of non-dom Labour party friends and donors in seeking to explain the government’s failure to scrap a tax break it once vehemently opposed (last year it settled on a pin-prick £30k annual charge for non-dom status). Perhaps we should have been looking elsewhere in the political forest too.

In other words, there were strong personal and professional links between Brown, senior treasury officials and Daily Mail, so it’s no surprise whatever Rothermere got away with his scam. It’s another example of the suspicious cronyism, which so effectively discredited the last vestiges of New Labour with Brown’s government.

As for Rothermere, I’m not just astonished at the man’s brazen hypocrisy in falsely claiming non-dom status for himself while his organ lambasts the indigent poor for scrounging. I’m also amazed at the way this government closed, or planned to close, one of rights of immigrants working in the UK. The government decided that they wanted to stop welfare payments going from immigrant workers in this country to support their children or dependents in their countries of origin. I can see little difference between an immigrant doing this, and Rothermere falsely claiming to be resident in France, so he can buy a family home here in Britain. If anything, Rothermere’s scam is worse, if only because he is well able to pay for the house himself many times over already. The immigrant workers’ dependents, however, are likely to be poor people in a poor country, and so have far more of a genuine need for the money.