tag:blogger.com,1999:blog-8764541874043694159.post448339926552573653..comments2024-03-28T12:23:39.665+00:00Comments on Coppola Comment: Awful, awful.....Frances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger19125tag:blogger.com,1999:blog-8764541874043694159.post-79644666326362864272012-03-03T22:28:19.765+00:002012-03-03T22:28:19.765+00:00Thought Gang
Ah, I'd forgotten about that err...Thought Gang<br /><br />Ah, I'd forgotten about that error by the Guardian. Would that be enough to explain the discrepancy, do you think? Even using the lower figure, 23.4% down to 1% is a HUGE drop.<br /><br />I'm fast reaching the conclusion that Murphy is not making errors, he is deliberately leaving figures he knows to be wrong uncorrected because they support his political stance. Which might explain why he is so rude to people who point out the errors - as in his comment on this blog, for example. <br /><br />I thought Shinsei made a good point about UK Uncut.Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-26205603365906756372012-03-02T21:45:35.701+00:002012-03-02T21:45:35.701+00:00I'm going from memory here.. but my recollecti...I'm going from memory here.. but my recollection is that another of the errors made by the Guardian article was in comparing UK tax paid to global profits.. so completely ignoring all the tax that was paid in other countries.<br /><br />That article was probably the worst piece of financial journalism I've ever seen. And that is rather an achievement in these curious times. The worst thing is that Richie, for all his faults, knows enough to know that the reporting was awful and the 'Barclays pays 1% tax' claim is deeply misleading. He, along with many others who know this, are entirely unwilling to try and educate their audience.. they are happier with the lie.<br /><br />I agree with Shinsei, above. UK Uncut could actually play a useful role in educating and informing.. but they're just encouraging ignorance, and I fail to see how that helps anyone. If there are instances where reform is desirable, having a bunch of people equipped with some actual facts would be helpful.. having them equipped with misinformation will not.The Thought Ganghttp://www.thethoughtgang.comnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-91093059281326196222012-03-01T22:25:38.345+00:002012-03-01T22:25:38.345+00:00Gah, I mean "if you take out the disposal&quo...Gah, I mean "if you take out the disposal", of course. Getting my acquisitions and disposals mixed up!Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-18025208779694415362012-03-01T22:22:28.003+00:002012-03-01T22:22:28.003+00:00Leigh,
The plot thickens....
On further investig...Leigh,<br /><br />The plot thickens....<br /><br />On further investigation it appears that the Guardian's figure of £113m can't be substantiated from the 2009 report and accounts. According to those accounts, tax paid was £1.354bn on profits of £11.6 bn. If you take out the acquisition, which as I pointed out in the post is an AFTER-TAX figure, that means an effective tax rate of 25.5%. Note 11 to the 2009 accounts gives the effective tax rate as 23.4%, but that is only tax borne on profits from continuing operations. They give the following reasons for the effective rate being below the UK corporation tax rate: non-taxable gains and income, different tax rates applied to taxable profits and losses outside the UK (I guess this would include offshore), disallowed expenditure and adjustments in respect of prior years. I REALLY want to know where the Guardian got their figures from!<br /><br />Re 2008, the Lehman acquisition was originally stated as a profit in the preliminary accounts, then I think they realised they'd been sold a pup....it turned into a sizeable loss in the final accounts. Their effective tax rate in 2008 because of this was 8.8% according to the note in the 2009 accounts.Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-50864875461643005132012-02-27T20:22:25.787+00:002012-02-27T20:22:25.787+00:00AFAIK share incentive plans are only free of all t...AFAIK share incentive plans are only free of all taxes if they were either part of an SAYE scheme or a share options scheme where the options had to be current for 3 years. I had both some years ago but things may have changedGeeDeenoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-46808639974072976752012-02-27T20:06:44.747+00:002012-02-27T20:06:44.747+00:00Mark, I suspect the reason for that comment was th...Mark, I suspect the reason for that comment was the fact that I had queried the figures. If I can't read accounts then my comments aren't credible, are they? But this blog has been read by at least six other experienced accountants to my certain knowledge and none of them have complained about my figures.Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-66697163680222202992012-02-27T20:01:40.616+00:002012-02-27T20:01:40.616+00:00Accusing other people of not being able to read ac...Accusing other people of not being able to read accounts is a bit rich when you've just been caught out telling porkies.MarkSGhttps://www.blogger.com/profile/00385265484883778905noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-40786739677084519472012-02-27T19:51:13.763+00:002012-02-27T19:51:13.763+00:00Richard,
"Asking why police decide to prosec...Richard,<br /><br />"Asking why police decide to prosecute is an important part of the duty of any citizen."<br /><br />In England and Wales it is the CPS that decides whether or not to prosecute. The CPS specifies the charges and the police charge the offender.<br /><br />With what offence(s) should 'the bankers' be charged?uklibertyhttp://ukliberty.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-21855806123662016632012-02-27T18:22:36.771+00:002012-02-27T18:22:36.771+00:00Leigh, thanks. I didn't look at the 2008 accou...Leigh, thanks. I didn't look at the 2008 accounts - will do so now. Barclays themselves said the low tax rate was due to losses carried forward. I'm not sure what losses they took on the part of Lehman's business that they managed to acquire.Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-9255322289696734742012-02-27T17:37:46.882+00:002012-02-27T17:37:46.882+00:00RM: << Asking why police decide to prosecute...RM: << Asking why police decide to prosecute is an important part of the duty of any citizen.>> The police don't make the decision to prosecute; the Crown Prosecution Service does. You seem not to know that.PaulBhttps://www.blogger.com/profile/16861432701458977844noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-68059616252760139182012-02-27T17:01:08.114+00:002012-02-27T17:01:08.114+00:00Paul and SE, thanks v much (and Frances for origin...Paul and SE, thanks v much (and Frances for original post)Lukenoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-23901258969832871632012-02-27T16:19:59.481+00:002012-02-27T16:19:59.481+00:00SE: there's a "Company Share Option Schem...SE: there's a "Company Share Option Scheme", which awards share options. Or a "Share Incentive Plan", which awards shares free of all tax. Neither is relevant to bankers' bonuses in the sense we're discussing.<br /><br />Luke: It's common for hedgies (and private equity guys) to keep their own money in the funds they manage. But the Carried Interest treatment applies equally to management fees they receive proportional to fund performance. I see no justification for this, and I don't know why HMRC agreed to it: it seems not to be required by law.PaulBhttps://www.blogger.com/profile/16861432701458977844noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-26908599809744408102012-02-27T15:07:07.022+00:002012-02-27T15:07:07.022+00:00Banks funding City of London Police? Normally a re...Banks funding City of London Police? Normally a reference to the DCPCU (Dedicated Cheque and Plastic Card <i>fraud</i> Unit). Which is 50% funded by the banks and 50% by the Police Authority and often has bank staff seconded to it. Note that these are rarely investigating large scale bank fraud - simply because cheques and plastic aren't particularly efficient vehicles for such.<br /><br />As for Luke's private equity question - it's more complicated. If you own shares in the business you are part of, you get special CGT treatment. It used to be "taper relief" - which meant (approximately) a 50% cut in CGT liability if you held the shares for a year and if you held them for 2 years, a 75% relief - hence, at the time, the 10% CGT statements. This has been replaced by "Entrepreneurs' Relief" which restricts it to a narrow class of employee (you need to be a partner or an officer and more than 5% shareholder) and restricts qualifying gains to a "lifetime limit" - currently £5m.<br /><br />Paul is also slightly incorrect on the taxation of share bonuses. If the "Corporate Share Ownership Scheme" which holds the shares is HMRC approved (the ones for the very high paid employees may well not be) you can take the shares out after 3 or more years, free of income tax.Surreptitious Evilhttps://www.blogger.com/profile/15393411103584747731noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-52777078956986724792012-02-27T13:46:22.500+00:002012-02-27T13:46:22.500+00:00Paul, thank you for a very clear answer to somethi...Paul, thank you for a very clear answer to something I wondered about but had been too lazy to look up. I have a slightly off-topic query.<br /><br />I have heard a lot of fuss about how private equity uses "carried interest" to turn what is really employees' income/bonuses that would be taxed at 40/50% into capital gains that are lower taxed. Is this really a bit of a (legal) dodge or are these guys actually putting their own money, from taxed income, into the underlying investments, along with outside money?<br /><br />May be a US issue (see Buffett/Romney) but I remember John Moulton saying something similar to Buffett.<br /><br />Feel free to ignore, particularly if private equity is not really your area.Lukenoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-27139849955166771392012-02-27T12:50:00.114+00:002012-02-27T12:50:00.114+00:00>> - If bonuses are paid in shares, they suf...>> - If bonuses are paid in shares, they suffer Capital Gains Tax instead of income tax, which is likely to be a lower rate (18-28% instead of 20-50%). This is true - when the shares are sold... <<<br /><br />This is not true. Bonuses paid in shares are subject to income tax at the time they vest (which is usually one, two, or three years after the award date). They are subject to capital gains tax on any gains after the vesting date.PaulBhttps://www.blogger.com/profile/16861432701458977844noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-28923142410986629682012-02-27T12:39:59.241+00:002012-02-27T12:39:59.241+00:00Let's be clear - redknapp was innocent on the ...Let's be clear - redknapp was innocent on the charges made against him. The programme made that clear.<br /><br />Asking why police decide to prosecute is an important part of the duty of any citizen. You seem not to know that. Unless such discussion takes place the police are not held to account. They have to be in a democracy because they do make mistakes. If they ever sued on the basis of such discussion we would have a police state. Maybe that's your aim but it's hard to reconcile with the position of your libertarian friends. <br /><br />The rest of what you write is just wrong - and not worth commenting on. You can't read accounts, do not understand offshore and do not seem to realise 2008 happend. You also do not seem to understand taxing harmful behaviour is an important part of tax policy. But I guess that's the problem of being an ex banker. You may think the time for remorse is over: society does not.Richard Murphyhttp://www.taxresearch.org.uk/Blog/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-62561158021901404152012-02-27T11:25:16.396+00:002012-02-27T11:25:16.396+00:00Good points. A simpler way to make the Barclays ca...Good points. A simpler way to make the Barclays case - because certain people might like to imply that complicated phrases like "carry forward" must be hiding some sneaky tax dodge - is to point out that the £113m was the tax on two years worth of results not one. Across 2008-09 Barclays presumably made a very small net profit (if any) and so £113m might be quite a high rate.<br /><br />Having said that, the figures that I can find for Barclays in 2008 are £6bn profit (not loss) and so I'm not sure this does explain it. They did write off £8bn, so maybe that £6bn was operating profit before writeoffs, but I don't think so. I imagine they must have made much of that profit in the US and paid tax on it there. In any case it's a bit more complicated.<br /><br />On the last point, I agree there is no point complaining to the UK government about the behaviour of other countries, but it is legitimate to raise a concern about tax rate competition and profit shipping. I wouldn't have thought of the Netherlands as an attractive destination for this but Luxembourg and Ireland may well be. Of course the issue is more complicated than TJN would probably admit, but worth talking about.<br /><br />On points 2 and 3, I completely agree with you.Leigh Caldwellhttps://www.blogger.com/profile/16150868700502562500noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-48674473978227788762012-02-27T09:25:59.479+00:002012-02-27T09:25:59.479+00:00I've always thought of UKUncut as similar to A...I've always thought of UKUncut as similar to Aberdeen Angus Steakhouses. <br /><br />All Aberdeen Angus Steakhouses have to do is cook steaks. So they should be excellent at it. But for some reason they are hopeless.<br /><br />UKUncut should be pretty good tax experts by now, but they are not only wholly ignorant but they don't seem to have learned a thing about tax in the last couple of years. It is bizarre.<br /><br />They could have made real progress with a campaign to stop stamp duty avoidance on property purchases via offshore companies but instead they just bang on and on about Vodafone and the ancient history of Philip Green's wife's tax status.Shinseihttps://www.blogger.com/profile/09237888519217740228noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-77821697208632846052012-02-27T08:15:20.230+00:002012-02-27T08:15:20.230+00:00Well said. I wouldn't bother. The Tax Justice ...Well said. I wouldn't bother. The Tax Justice Network are not taken seriously, except occasionally by the BBCJackarthttps://www.blogger.com/profile/04477130724830922566noreply@blogger.com