Bono: If he doesn’t act now, it could be the biggest PR disaster of his career

Posted on

Sorry to bang on about Bono – but the man deserves it. Look at this from the Irish Independent:

Fifteen minutes. That's how long it would take for U2 to move the publishing arm of their multi-million euro empire back to Ireland.

No red tape, no small print or binding contracts; there is nothing stopping the band from paying the royalty taxes toBrian Lenihan.

On Friday the band's "people" dismissed questions about their future tax status . They were too busy to comment, they said.

With their new album No Line On The Horizon just launched sources said it was "all hands on deck" and it would be too difficult to get an answer.

But that is exactly what fans are demanding.

A poll conducted for the Sunday Independent this weekend has shown that the vast majority of respondents, 84 per cent, believe that all U2's business operations should be based in Ireland and that they should pay tax here too.

Respondents also felt that their decision to avoid tax here was hypocritical given their outspokenness on debt relief and poverty.

In recent days, as the U2 publicity machine went into overdrive, a handful of newspapers and magazines were presented with a rare chance for face-to-face time with the group.

Serious questions had to be asked. And this time it's wasn't about the music. Times have changed spectacularly since the publishing arm of the U2 consortium moved to the tax-friendly Netherlands and there is a sense of anger among many.

Job losses are mounting, the country's treasury is in desperate need of taxes and everyone from special needs children to old age pensioners are being targeted for cutbacks.

In the past, people listened patiently while Bono shouted about the need for governments to pump taxpayers' money into alleviating third-world poverty during times of plenty. But now that has come to an abrupt end, so too has their attitudes to Bono's preaching.

The band's answer to criticism was simple: what they were doing was not illegal and that their tax affairs were a private matter between them and the tax man.

It's clear to see that the band has seriously missed the point.

No-one is claiming they are acting illegally. But the moral dimension to taxation is too strong for U2 to ignore, a view borne out by the Sunday Independent poll.

The band also no longer has the right to claim their taxes are their own private affair.

For 10 years, U2's frontman has campaigned for third-world debt relief though government intervention.

In recent days, when pressed, Bono claimed "I can't speak up without betraying my relationship with the band -- so you take the shit."

One has to wonder if Bono is referring to his own personal desire to move home and pay his own dues in line with his public campaigning.

But Richard Murphy, director of Tax Research LLP, which undertakes work on taxation policy for governments, commercial organisations and aid agencies, quickly puts paid to that idea.

"If he really wanted to, Bono could take his share of the royalties back to Ireland," he says.

Murphy says it is impossible to get an accurate figure for how much the group are saving as tax exiles because they do not publish their full accounts.

But in response to the band's claims that they are a worldwide brand who pay their taxes globally, Murphy says that their explanation is "completely and utterly disingenuous".

"The Netherlands was not chosen by chance to be the location for their royalty collection company. It is a tax haven that creates an incredibly low tax route for collecting royalty income."

"This is a deliberate move to avoid tax," he continued. "Yes they are a worldwide brand, but they deliberately decided to structure their affairs to pay the lowest amount of tax that was absolutely possible to do. And at the same time Bono is begging the world to use taxpayers' money to support development."

Asked how long it would take for U2 to relocate the company back to Ireland, Murphy responds without hesitation. "15 minutes," he says. "And there is absolutely nothing the Dutch could do about it."

If U2 eventually took that decision to move home they would have to pay "an astronomical" 12.5 per cent of tax, laughs Murphy, tongue-in-cheek.

"That's in comparison to the 5 per cent they are currently paying in The Netherlands".

In the meantime, as U2 continue to come under a hail of criticism for their tax exile status, the band will have to take time to decide where they go from here.

If they don't act now, it could be the biggest PR disaster of their career.

I hope they’ll forgive me for swiping the whole article – but I guess I helped it along.

And to Bono I repeat the message – come out and talk about this. Now.