I first wrote about 'Sir' Philip Green's tax avoidance on this blog in 2006, and went on to help the BBC make a programme on the issue.
I put 'Sir' in inverted commas at the time.
Today MPs voted that he lose his knighthood.
I think I need say no more.
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Ahead of the game once more. Well done Richard.
Whether we should strip Green of his knighthood I am not qualified to say but I am intrigued by aspects of your 2006 article. Elsewhere you have concisely described tax avoidance as an outcome the legislators could not have forseen. But income tax is statutorily residence based and although the legislators could easily have implemented withholding taxes on dividends paid but didn’t. So by your own definition Mrs Green did not avoid tax. None was due, as Mr Green said.
The simple fact of world commerce is that probably billions in dividends leave the UK every year and are not taxed here but billions in djvidends is received here from overseas and so is taxed here.
You seem to want both sides of the coin.
The structure was deliberately designed to create that outcome
Let me remind you what that was
A business to clearly be run by Philip Green was bought by trusts for the benefit of his wife via trusts, two nominee companies in Jersey and then another Jersey holding company which then owned the UK operation
The owning wife so arranged things that she, but not her husband who ran the iperation, happened to be resident in a taxhaven, with all the effort that took
And you are saying UK law was designed for that outcome?
And it was not avoidance
Respectfully, I disagree
Strongly
Whilst saying it is all legal
And Richard. Rest assured that UK legislators have surely designed our tax system to cope with a structure you can understand.
I understand all right
Including just what you’re all about
As a genuine question:
What difference does it make who runs the business?
Holding shares and running a business owned by a company are 2 quite different things, and it is common and perfectly legitimate for people to do one, but not the other.
(In any case, it is a big assumption to say Tina Green was not actively involved in the business – she was a retailer in her early 40s when she married Phillip Green).
We live in a world where spouses generally regard themselves as one economic unit (what’s mine is yours), but are legally quite separate – for all purposes, not just tax. This isn’t a loophole but a result of struggle for married women to be treated independently, something which I am sure you endorse.
You clearly see the world in a way that I don’t
And candidly, I think you know you’re fabricating this
I don’t supose he deserves his knighthood quite as much as Craig OLiver.
The world is full of people like Green, they “work the angles”. In a society with a body politic this is even half awake, these angles get restricted, when the politicos are dozy or stupid (or self satified – take your pick) – people like Green are given the space to exercise their own version of kleptomania. This is not to say I don’t condemn Green for waht he did – but it takes two to do the rip-off tango.
Hello Richard, I read your article and would graciously like your assistance with the answer to a question. What is the short definition of tax avoidance? And what is it that P Green did that makes him a tax avoider? Thank you in advance, Winston
The answer to your question is well known
So I will not bother to repeat myself
Of course MP’s are great at managing pension funds and making sure the necessary contributions are paid in. You only need to look at the Royal Mail pension deficit run up at the hands of governments of varying persuasions when they took a 13 year contribution holiday, if memory serves me correctly that was close to 10 billion. Is it time to see some of the government ministers responsible for that stripped of their honours and peerages?
Richard Green is an easy target, but there are lots of pension funds in deficit in the current economic climate, can we expect shareholders in many companies across the UK to see dividend reclaims in the coming years to fund those deficits?
Without doubt Richard Green got various things wrong, but I am absolutely certain he wasn’t the only person in that boat.
Not sure why I said Richard Green when I meant Philip Green, but clearly it is late 🙂
The holiday was when stock market returns made that look reasonable
That was wrong
But it was actuaries who were to blame, and no one else
Has someone got to the bottom of where the distributable reserves came from to justify paying a £1.3 billion dividend? It would be a shame if the dividend was unlawful and so had to be repaid. No doubt the company’s creditors have been giving the issue some thought.
There were no reserves from which to pay the dividend
That was why the money had to be loaned back
With interest then paid offshore on the loan
On which tax relief was then, no doubt, claimed
Think about it….
I was quite impressed with what Clive Lewis said in parliament t’other day – reminding it/them that stripping knighthoods was all very well, but making effective legislation to stop this sort of thing happening in the first place was what they were actually here to do.
The old ‘prevention is better than the cure’ argument is too often ignored in the current management of financial systems and markets.
It was an appropriate point
In addition, I am more worried about BHS pensions than knighthoods