2009 August » Tax Research UK

Adnams faces fresh criticism

Aug 252009

FT.com / Companies / Food & Beverage – Adnams faces fresh criticism from GPG.

It’s not often I blog on individual companies but this is different. This is an attack on the best brewer in the world (have you tried their beer – and have you tried it at the Lord Nelson in Southwold?):

Adnams, the Suffolk-based brewer and pub operator, was forced on to the defensive on Monday following fresh criticism from Guinness Peat Group, the activist investor and rebel shareholder.

GPG, which holds 5.4 per cent of Adnams’ B-shares and 2.5 per cent of the voting rights, has been pushing for changes to the group’s corporate strategy and an end to the dual share structure.

In a letter sent to other shareholders last week, GPG claimed to have received support from 300 other investors who were also unhappy with the way the company was being run.

Adnams has drawn sharp criticism from GPG over its trading performance over the past year. GPG has questioned the rationale behind the millions that the brewer has invested to modernise its production facilities.

It has also queried Adnams’ move into wine retailing, saying that the brewer should concentrate instead on building its beer and pub business in its East Anglia heartland.

I would no more trust GPG with Adnams than I would UBS with my tax return.

UBS – so, so wrong

Banking, Switzerland 1 Response »

Aug 252009

Reuters has reported Swiss press coverage of UBS comments this weekend, It’s amazing stuff. A selection of the quotes are:

"The clients are not just harmless victims. They knew what they wanted to evade," Kaspar Villiger, chairman of the world’s second-largest wealth manager, said in an interview with SonntagsBlick.

"But they trusted the bank that it would work. Now we have to correct that," said Villiger, adding it was still not the responsibility of UBS to make sure clients paid their taxes.

Wrong guys. It is your job to detect money laundering through your accounts. Tax evasion is money laundering. Ergo, you have to check your customer is paying tax.

Villiger did not believe systematic tax evasion had been a problem in countries other than the United States, he said in a separate interview with NZZ am Sonntag, adding that legal action against former U.S. bankers did not affect the bank.

Does he think we’re stupid? You’d have to be to believe that.

"The personnel consequences have been solved in so far as those responsible no longer work for UBS. We have not discovered any misdeeds relevant to Swiss criminal law," Villiger said. "That means we have no reason to take action against individual employees."

Tax fraud is a criminal offence in Switzerland. If this was not fraud, what was?

Villiger did not expect the introduction of an automatic exchange of client data between countries in future.

"If Europe took unilateral action to introduce an information exchange and also forced this on Switzerland, money would flow to Asia in a big way," he said.

Then we’d move against Asia next. It is finite world.

"Swiss banks hid behind bank secrecy for years," said Villiger. "The competition has got bigger with the disappearance of the difference between tax fraud and tax evasion."

There never was such a distinction, except for Swiss law which created it to permit fraud.

All of which seems to suggest UBS is still in cloud cuckoo land.

The EU wants Swiss data

Banking, Europe, Switzerland, Tax evasion 2 Responses »

Aug 252009

I’m told that speaking to journalists on the condition of anonymity, an EU official said August 21 that the EU and the EU member states plan to contact Swiss authorities to formalize an agreement that would enable the transfer of bank account information of EU citizens suspected of tax fraud and evasion by depositing large amounts of funds in secret bank accounts.

They said:

We do welcome favourably the fact that it was possible [for Switzerland] to assist the United States in [the UBS] case. We expect a similar request from EU member states to Switzerland would not receive different treatment. Any action to seek to improve good governance and transparency in the area of tax affairs is to be welcome.

More progress.

But when will smaller countries, transition states and developing countries get a look in? No one has more to gain from the opening up of Switzerland than they do.

Statement from the Nationwide

Banking, HMRC, Isle of Man, Tax evasion Comments Off

Aug 252009

When I wrote my first blog on the report of Nationwide’s problems with the new requirement on UK banks to disclose information to HM Revenue & Customs I referred to the Sunday Times article that first reported the story.

I caveated my comments with the statement:

what the Nationwide is saying ‚Ä¶, if correctly reported (and I stress, I am assuming that is the case)

I did so for good reason; I assumed it at latest possible that the Times got their interpretation of what they’d been told wrong, although it had a ring of credibility to it for a great many reasons, not least being the background information given as to why the Nationwide could not comply.

But I did, as I noted yesterday, ask the Nationwide to comment. They promised me a statement, which arrived overnight (having seemingly been delayed heavily en route), which says:

Further to our conversation just now, I can confirm that the information provided to the Sunday Times was inaccurate. Nationwide has been in active discussion with HMRC and we are doing all we can to comply with their requirements.

From my enquiries I have established that the Revenue has requested details of offshore accounts where the customer has a UK address.

I am happy to post this correction, and have drawn attention to this in other blogs – whilst leaving them intact as they were written in good faith based on information the Nationwide admits it supplied.

I also note that the correction does not deny they will have problems in complying. And it does not deny that the request may extend to their Isle of Man subsidiary, on which I asked for specific comment.

My opinion now? That, as I was told by the Nationwide press office, someone in that building society did say what the Sunday Times reported, but that the Nationwide has now been panicked into delivering the resources needed to find the data – which will require them to refer to their Isle of Man subsidiary’s records for all the reasons I’ve noted. And if one bank does this, HM Revenue & Customs will require the same of all others.

We live in interesting times.

Job cuts to follow German elections

Conservatives, Economics 1 Response »

Aug 242009

FT.com / Europe – Job cuts to follow German elections.

Germany faces a potential wave of corporate restructurings, some of its top managers say, because companies have deferred job cuts to help ensure the re-election of a business-friendly government at next month’s federal elections.

Senior managers and institutional investors say there has been an implicit “pact” not to announce big job cuts ahead of the September 27 ballot.

You can bet they’ll do the same for the Tories here.

NB Thanks to Mark Lee and Georges for pointing out previous copy and pastye error in this post

In control? Think again. Our ideas of brain and human nature are myths | Madeleine Bunting | Comment is free | The Guardian

Ethics 13 Responses »

Aug 242009

In control? Think again. Our ideas of brain and human nature are myths | Madeleine Bunting | Comment is free | The Guardian .

I don’t like the framing of Nudge, but I’ve read most of what Madeleine Bunting refers to here – and have no doubt the logic is right.

And she encapsulates it well:

Are human beings self-interested creatures or are they collaborative? The right’s argument for market capitalism is rooted in the former but the research on the social brain supports the latter.

Put crudely, we are social creatures with an inbuilt tendency to co-operate and seek out each other’s approval and that is probably more important in determining day-to-day behaviours than narrowly conceived self-interest.

That’s about it.

I wish it meant goodbye to the Right.

I think it will, sometime soon.

The information HMRC is demanding from 308 UK based banks

Banking, HMRC, Secrecy jurisdictions, Tax evasion, Tax Havens Comments Off

Aug 242009

Mark Lee of the Tax Advice Network has secured a copy of the letter HM Revenue & Customs has sent to UK based banks regarding accounts (including assets portfolios) their banks manage on behalf of UK resident persons (including companies, trusts, partnerships and more besides) where the funds are held outside the UK.

Note, as I suggested earlier, this requires disclosure if the documents are in the possession or power of a UK bank. I have no doubt that a UK parent has power over all its subsidiaries.

The data required is extensive.

People who do not voluntarily come forward and declare any undeclared assets they have offshore will, I think, be most unwise.

Of course there will be those who will try to rely on their luck. And they may still believe banks will fight back. I think there is little chance of banks winning that argument now. And for those banks who have adopted IFRS 8 and have not treated their offshore subsidiaries as separate entities I’d think very hard before saying you have no power, because you have very publicly already said you have.

The extraordinary thing is – with this request HM Revenue & Customs is basically saying it wants Automatic Information Exchange. So why not publicly support it, and even demand it from the OECD in Mexico next week?

Nationwide: an update

Banking 1 Response »

Aug 242009

I have called Nationwide to check the story I have blogged that they do not have data to supply to HM Revenue & Customs.

They say the Times correctly reported this.

They also say the story is wrong. they say they do now have the data.

They say they’re sending me a statement. I have yet to receive it.

I will publish it when I get it.

Nationwide: an HMRC statement

Banking, HMRC, Isle of Man 5 Responses »

Aug 242009

Further to my blogs on the Nationwide I called HMRC and asked if they were requesting data from people like Nationwide from their offshore subsidiaries. I was told:

The information that has to be provided is set out in the notice. Notices were sent out to the financial institutions affected last week.

The law states that any information notice only requires a person to produce a document if it is in the person’s possession or power. This is legal terminology which has been the subject of clarification in the courts but depending on the particular arrangements in a financial institution, it can mean that they have to provide information from offshore associates.

The ruling is not published yet.

I gather the ruling will be published in about four weeks.

But note the important point – which I will be returning to –that the power to acquire is what is important. And if, as I suggest, Nationwide seems to say its Isle of Man subsidiary is managed centrally as one unit with the UK then it must have the power to acquire the data.

I think IFRS 8 is about to become HMRC’s best friend.