Tax Special Investigation: HMRC ‘particularly feeble’ over failure to close loophole

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http://www.independent.co.uk/news/uk/politics/tax-special-investigation-hmrc-particularly-feeble-over-failure-to-close-loophole-8895209.html

Despite the tax exemption costing the UK economy at least £500m a year, the  Government bowed to  pressure after intense lobbying from the financial sector to allow companies to use it

The Government chose not to close a tax loophole which costs the UK economy at least £500m a year after intense lobbying from the financial sector, The Independent has learnt.

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More than 30 companies are paying more than £2bn in total to their overseas owners every year as interest on borrowings. As these can be deducted from the companies’ taxable UK income, this amounts to a corporation tax saving of around £500m when compared to equivalent investment in shares in the company.

Without the exemption, any tax savings from the interest deductions would be greatly reduced by the 20 per cent withholding tax that HMRC would otherwise take from interest payments going overseas. As many more companies list debt in the Channel Islands, and the loophole also works in other exchanges including Luxembourg and the Cayman Islands, the total tax lost may be significantly higher.

27/11/13 Having received a takedown notice from the Independent newspaper for a different posting, I have reviewed this article which links to an article at the Independent’s website in order to attempt to ensure conformance with copyright laws.

I consider this posting to comply with copyright laws since
a. Only a small portion of the original article has been quoted satisfying the fair use criteria, and / or
b. This posting satisfies the requirements of a derivative work.

Please be assured that this blog is a non-commercial blog (weblog) which does not feature advertising and has not ever produced any income.

dizzy

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Tax Special Investigation: Firms running NHS care services avoiding millions in tax

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http://www.independent.co.uk/news/uk/home-news/tax-special-investigation-firms-running-nhs-care-services-avoiding-millions-in-tax-8892925.html

Companies running care services are among many avoiding millions in tax through a legal loophole. In the first of a series, Emily Dugan and Richard Whittell report

NHS sign

Companies receiving lucrative government contracts to run care services looking after tens of thousands of vulnerable people are avoiding millions of pounds in tax through a legal loophole.

The firms are cutting their taxable UK profits by taking high-interest loans from their owners through the Channel Islands Stock Exchange, an investigation by Corporate Watch and The Independent has found. By racking up large interest payments to their parent companies, they are able to reduce their bottom line and cut their tax bills.

The news will increase concern about NHS reforms that are seeing private companies take more responsibility for services. It also raises questions about the Government’s commitment to tackling corporate tax avoidance, which David Cameron has said “corrodes public trust”.

Over the course of this week, The Independent will reveal how more than 30 UK companies, including some of the UK’s most recognisable brands, are benefiting from this legal tax loophole, known as the quoted Eurobond exemption. HMRC considered restricting the use of the loophole in 2012 but never took action.

27/11/13 Having received a takedown notice from the Independent newspaper for a different posting, I have reviewed this article which links to an article at the Independent’s website in order to attempt to ensure conformance with copyright laws.

I consider this posting to comply with copyright laws since
a. Only a small portion of the original article has been quoted satisfying the fair use criteria, and / or
b. This posting satisfies the requirements of a derivative work.

Please be assured that this blog is a non-commercial blog (weblog) which does not feature advertising and has not ever produced any income.

dizzy

 

Continue ReadingTax Special Investigation: Firms running NHS care services avoiding millions in tax

Boots owner Alliance ‘uses havens to save £1.1bn in corporation tax’

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http://www.independent.co.uk/news/uk/home-news/boots-owner-alliance-uses-havens-to-save-11bn-in-corporation-tax-8880052.html

Image from http://www.waronwant.org

Alliance Boots, the owner of Boots the chemist, has avoided £1.1bn in taxes by routing its cash through a series of subsidiaries in well-known tax havens including Luxembourg, Cayman Islands and Gibraltar, according to a new report.

The campaign groups War on Want and Change to Win and the Unite union have calculated that the company saved the money by loading the UK business with debts from its £12.2bn private purchase in 2007 and legally claiming tax relief against the interest.

The campaigners claim that 40 per cent of Boots’ sales come from NHS-funded services such as prescription drugs and flu jabs – and called on the Government not to hand contracts to companies that do not pay their fair share in tax. The pharmacy giant rejected the report’s findings and said it is one of the most transparent private companies in the world. Only 25 per cent of sales came from prescriptions and similar business, it added.

Last year, Alliance Boots’ sales hit £22.4bn with underlying profits reaching £805m. However, the company paid just £114m in tax, including £64m in the UK, up £31m on the previous year. In the UK, under the Boots brand where it has 2,000 stores, sales were £6.55bn.

27/11/13 Having received a takedown notice from the Independent newspaper for a different posting, I have reviewed this article which links to an article at the Independent’s website in order to attempt to ensure conformance with copyright laws.

I consider this posting to comply with copyright laws since
a. Only a small portion of the original article has been quoted satisfying the fair use criteria, and / or
b. This posting satisfies the requirements of a derivative work.

Please be assured that this blog is a non-commercial blog (weblog) which does not feature advertising and has not ever produced any income.

dizzy

 

Continue ReadingBoots owner Alliance ‘uses havens to save £1.1bn in corporation tax’

UK politics news review

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A brief post today as I can’t spare the time.

The Liberal-Democrat-Conservatives’ party conference at Brighton has finished. The Labour party conference at Manchester has started. Ed Balls scored two goals (the second is disputed by claims that he faked a foul leading to a penalty and goal) and Andy Burnham scored one against the Press XI. Ed Miliband makes a speech suggesting the return of the 50% tax rate that the ConDems’ abolished and telling the banks to sort themselves out. Two policies that I agree with. Clearly, if the banks are too big to fail then they need to be made smaller. There is not a commitment to undo the ConDems’ privatisation and demolition of the NHS.

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News review

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  • South London NHS Trust is declared ‘bankrupt’ and placed in ‘receivership’. A private company may take over.
  • Insanity returns to the Labour Party. Insane, deluded, divorced-from-reality, barking mad and woofing former Prime Minister and War Criminal Tony Blair to advise Miliband on Sports Policy. At least he’s got a fairly harmless nothing position but doesn’t Miliband and the wider Labour Party realise what damage Blair & Co have done, the extent to which he is hated by so many, that he’s a Tory who pursued Tory policies? He was so hated that he left the country for 5 years FFS.
  • London couple forced to treat their son privately.
  • NHS campaigner offered job as NHS-wrecker.

    South London Healthcare NHS Trust put into administration

    South London Healthcare NHS Trust is to be put into administration after it ran into financial trouble, the government has announced.

    Health Secretary Andrew Lansley has appointed a trust special administrator to go into the trust.

    As well as struggling financially, the trust also has some of the longest waiting times for operations and longer-than-average waits in A&E. However, it has low infection and death rates.

    If a decision was made to break up the trust, it would not necessarily mean the closure of all services.

    Another more successful NHS organisation or private provider could end up taking some on.

     

Tony Blair returns to politics as Labour sports adviser

Former prime minister Tony Blair has undertaken his first job in British politics since leaving office, as an adviser to the Labour party on its sports policy review.

The anti-war movement won’t let Tony Blair forget about Iraq

Pay £2,000 to remove painful lump on son’s hand, NHS hospital tells couple

A couple have had to borrow £2,000 to pay for an operation to remove a painful gobstopper-sized lump on their child’s hand after NHS officials refused to pay for “cosmetic” surgery.

Bailey Payne, three, from Dagenham struggles to hold a pen because of  the lump, which has formed from a build-up of muscle tissue near the base of his thumb. His mother Maxine, 24, took him to her GP, who said the lump should be removed and referred him to Queen’s Hospital in Romford.

Doctors agreed to carry out the operation but weeks later Ms Payne and her partner Steven Jones, a lorry driver, received a letter saying the NHS would not cover the costs of the surgery. The couple lost an appeal.

Going private? What happened when a private health company offered an NHS campaigner a job

This week, Alex Nunns, campaigner with Keep Our NHS Public, was headhunted for a job at private health firm Care UK. His proposal? A new coporate motto: ‘Providing less, for more’.

I believe a key talent for any disrespecting Media Relations Executive is the ability to turn a negative in to something offensive. For example, it must have been a stressful time in the Media Revelations office when that tax avoidance story broke a few months ago – the one saying that Care UK had reduced its tax bill by taking out loans through the Channel Islands stock exchange. All this talk of tax havens and tax avoidance isn’t good in the current climate. But as your Media Relationship Executive I would have used a little reverse psychology, instead of denying it as your spokesman did. After all, this could put you right up there with the big boys like Goldman Sachs, Vodafone and Jimmy Carr.

Similarly, you got some bad press when it was revealed that the wife of your former chairman John Nash gave £21,000 to Andrew Lansley’s office before the last election, when Lansley was shadow health secretary. But let’s view it from another angle – doesn’t this serve to highlight Care UK’s excellent political connections? And look how it turned out: Lansley is in power and he has passed the Health Act. He has opened the door wide to privatisation, and Care UK is already inside redecorating the place.  We thought Lansley wasn’t going to manage it for a while, when all those thousands of patients and doctors started protesting and June Hautot shouted “codswallop” at him in the street. But he pulled through, sacrificed his future public career for private gain, and God bless him for that. Care UK now stands to make a fortune. This is something to boast about, for Bevan’s sake! And all for £21,000, less than it would cost to employ a Media Relations Executive for a year. (Please confirm.)

You should play to your strengths. Care UK is a true pioneer in this privatisation drive. You were the first private company to run a GP surgery in Dagenham back in 2006. And the first to face enforcement action from the Healthcare Commission because of slack hygiene procedures at the Sussex Orthopaedic Treatment Centre in 2008. And who’s to say you weren’t the first to forget to process 6,000 x-rays at your ‘urgent’ care centre in North-West London in 2012? As a Mediocre Relations Executive, I would advise not mentioning those last two.

Continue ReadingNews review