What accountants say

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I was amused by this in the Guardian this morning in a discussion on the domicile rule:

Accountants have estimated that if 20% of private equity businessmen left the country if the practice ended, Britain would still be better off by £4.3bn, equivalent to more than a penny off income tax.

I admit I have yet to get used (and expect I never will) to a piece of my research becoming the accepted norm.

But the fact is that this number, transparently calculated, is now the figure that others have to prove wrong in this debate. No one has yet risen to the challenge that I'm aware of. Instead we get, according to the Daily Mail a report that:

At an industry conference in tax haven Monte Carlo, Wol Kolade, chairman of the British Venture Equity & Venture Capital Association said it was time to 'separate fact from fairytale'.

Note where he said it! He, apparently then:

called on the private equity industry 'to fight back against the myths that surround it'. He said: 'When you look at the facts and consider the real story of private equity, it is clear that it is good for companies, good for employees, good for the economy and of course good for investors.'

Tell that to those who now hold Debenhams' shares or to the employees of the AA. But most of all, he must live by his own mantra. According to the Telegraph he said:

the industry generated £26bn in taxes last year, and said millions of pensioners benefited from investments in private equity.

I bet that £26 billion includes PAYE from staff, VAT from sales, NIC and anything else he can find, probably using PWC's illogical Total Tax Contribution methodology. This, by the way was developed in the Mohamed al Fayed school of accounting when he first used it to justify the fact that he had a fixed price income tax deal with the Revenue. Bob McIntyre gave short shrift to that, and so should we to this absurd claim by the BVCA - which promotes fairytales, not facts.