‘Corporate ignorance’ at Guido Fawkes blog


6:42 pm - April 3rd 2012

by Tim Fenton    


      Share on Tumblr

The desperation of the perpetually thirsty Paul Staines and his tame gofer, Harry Cole, to use the Guido Fawkes blog to smear politicians whose stance is not to their liking has plumbed new depths today.

The target for the less than dynamic duo is Labour’s London Mayoral challenger Ken Livingstone, whose company the Fawkes blog describes as a “shell”.

Given that Staines appears to be in control not only of a limited company, but one registered offshore in the island of Nevis, one can only conclude that the posts in question sprang from the imagination of Harry Cole.

That’s a quite staggering admission of ignorance: a “shell” company is by definition one that is not trading.

But Silveta Limited, Livingstone’s company, most certainly is trading, and the Fawkes blog has been demonstrating this by publishing part of that company’s Abbreviated Balance Sheet, including the “cash at bank or in hand” at the end of the last financial year.

And, talking of “cash at bank or in hand”, this is yet another concept that the flannelled fool is having difficulty getting his brain round, as shown by a post trying to kick former PM Pa Broon. The Abbreviated Balance Sheet for the limited company he runs with wife Sarah shows an amount of £209,343, then the Fawkes blog suggests that this is Brown’s own money and should be subject to Income Tax.

Does the clown Cole really think that “cash at bank or in hand” is a director’s own personal tax-free piggy bank?

Does he not understand that a company’s money belongs to that company and it is not in the gift of the directors to use it as some kind of pocket money fund? Perhaps he could ask Staines to enlighten him. He certainly needs someone to teach him Limited Company 101.

It’s one of the many misunderstandings of the recent limited company saga, and needs to be put straight, although Staines, Cole and dodgy hackery purveyor Andrew Gilligan would rather their readership remains ignorant. Money that comes into the company does not automatically accrue to its directors or employees. That only happens when it is paid to them (and appropriately taxed).

Until then, any funds belong to the company and cannot just be taken out and spent at will.

The “cash at bank or in hand” item is nothing to do with directors’ or employees’ income. Cole may believe that he is being awfully clever by suggesting that the former PM is trousering over £200,000, and that he has discovered some underhand dodgy deal. But Brown isn’t, and so he hasn’t.

    Share on Tumblr   submit to reddit  


About the author
Tim is a regular contributor to Liberal Conspiracy. He blogs more frequently at Zelo Street
· Other posts by


Story Filed Under: Blog ,Media

Sorry, the comment form is closed at this time.


Reader comments


Like Gordon and Ken, I too run a small company into which all the takings of my ventures are put. That small company then pays me and three or four other people. All of us pay tax and NICs, deducted at source and paid directly to HMRC. The company also pays Corporation Tax on any money classed as profits. If we had any cash at hand and in the bank (which we don’t), and decided to share it amongst us, we’d PAY TAX ON THAT TOO.
How difficult is it for goons like Cole, Staines and Gilligan (lovely name for a dodgy triumvirate if ever there was one) to understand that this is HOW COMPANIES WORK and ALWAYS HAVE DONE?

“one can only conclude that the posts in question sprang from the imagination of Harry Cole.”

That may be unfair. Guido has in the past in relation to his own tax affairs adopted some rather idiosyncratic interpretations of the law. You’d think having been bankrupted by HMRC would make one a little more circumspect about criticising the tax affairs of others.

3. Shatterface

If you want to try and take the moral highground probably best to avoid phrases like ‘perpetually thirtsty’ which make you sound like George Galloway.

I regret that the definition used here of a shell company is wrong.

A shell can trade and many do.

I would recognise the description here http://en.wikipedia.org/wiki/Shell_corporation

That however could not describe what Ken Livingstone is doing

@3

Thank you for the advice. I will continue to characterise Staines and Cole as I see fit.

The original post is here:

http://zelo.tv/HlhJoB

My thanks to Sunny for picking up on it.

6. Paul Newman

Yes Jessica but the moment you pass your earnings through your Company you can offset all sorts of expenses as legitimate and with a bit of thought that process can be used to bring down your tax bill considerably.
This is not as easy as it might sound but in Livingstone`s case travel and office running costs, his wife will take a salary so as to double up the personal allowance ( for some non existent secretarial work ) . You can also make a Company investment so as to defer taxes drawing money out as and when it is advantageous.
Of course you end up paying less tax that is the only reason you do not simply put the money your earn in your bank account and that’s why Livingstone did it. To avoid taxation, there is nothing so terrible about this but then it is Labour who have made tax avoidance the same thing as grand theft . Its was a babbling child`s position in the first place and it has bit back. Good

Harry & Paul; Are they not a comedy double act on BBC1?

8. Spotty-faced Marxist

re 1 and 6

Er, Jessica, maybe you should think about employing a new accountant?

Doesn’t all this devious money-shuffling behaviour fall under the rubric of what Margaret Hodge, in her role as head of the public accounts committee, describes as a “tax avoidance scheme, which is totally wrong”?

“Dozens of high-earners are allowed to make their own tax arrangements rather than be paid through the PAYE system.”

http://www.bbc.co.uk/news/uk-politics-17339374

9. Leon Wolfeson

@6 – So you’ve just made some pretty serious criminal accusations.

Going to back them up with evidence, or is it slander?

6 Idiot troll proves how the rich don’t pay the 45-50% tax rates they are always moaning about.

11. MarkAustin

Ignoring errors of terminology, Guido Fawkes is quite right to have a gho at Ken Livingston on this issue. Despite some comments below, it’s pretty clear that he has done nothing illegal: just organised hios affairs to minimise tax by using a company (although the comments in the OP that it is “most certainly is trading” seem a bit far off the mark as it’s only purpose appears to be tax avoidance (which unlike tax evasion is legal).

However, the key point is that he used a measure which he has repeatedly denounced as immoral. This makes him, at least, a hypocrite and it is for that, not tax avoidance, which the right-wing bloggers believe is perfectly OK, that he is being pursued.

His wild attempts to smear Boris Johnson again show the signs of a desparate man with the morals of a cornered rat.

It has given me yet more reasons not to vote for the man, and is even, for the first time in my life, leaving me contemplating voting Tory to keep him out.

a “shell” company is by definition one that is not trading.

Heavens to Betsy. Agreeing with Richard Murphy.

A shell company is really just one that doesn’t have any significant business operations itself. If Livingstone had simply used Silveta to channel his earnings through, and possibly to pay his wife as director a small salary out of, then it would probably be fair to say it was a shell company. Since it appears to have been employing legitimate staff, it’s probably not quite fair.

Either way, it’s not a term of art, merely a shorthand.

Does he not understand that a company’s money belongs to that company and it is not in the gift of the directors to use it as some kind of pocket money fund?

We could unpack this a little further. The company’s money belongs to the company. The company belongs to its shareholders. Mr & Mrs Brown are, I believe, the only shareholders of the company. So are you disagreeing with Guido or agreeing with him that it’s Brown’s money?

He certainly needs someone to teach him Limited Company 101.

Please can we stop the 101 stuff? We’re not colonials, and we don’t have 101 classes. Besides, glass houses and all that.

How difficult is it for goons like Cole, Staines and Gilligan (lovely name for a dodgy triumvirate if ever there was one) to understand that this is HOW COMPANIES WORK and ALWAYS HAVE DONE?

Yes, but you don’t have to you know. You could set up as a sole trader, and pay staff out of your own pocket. The reason that you don’t do this, of course, is that it’s much less tax efficient. And tax efficiency is just another way of saying tax avoidance.

Yes but.

Richard Murphy has described, in written reports no less, the use of personal service companies (a better phrase than “shell” here) to income shift and income split as “tax abuse”.

So if we are to be consistent then when Ken does this it is tax abuse, no?

For we most certainly don’t want to go down the road of having different moral and ethical standards for the people on our side as opposed to those not on our side, do we now?

Is it just me or has this article spectacularly missed the point, viz. are Ken Livingstone’s tax affairs appropriate for a socialist politician? Or is it OK for a left-wing politician to practice tax avoidance but not for a right-wing one?

@11

Care to provide a link where Ken has criticised someone for doing what he is doing now?

Oh dear. As usual Tim Worstall misquotes and ignores commercial context, but that is his way.

I have been clear: their may be tax avoidance here. If Ken put his full accounts on file we may know. I suggest that’s his mistake. But abuse – over the top as usual Tim.

And when will you be putting your accounts on record, by the way? What right have you to throw stones in the meantime?

18. Paul Newnan

@6 – So you’ve just made some pretty serious criminal accusations.

Going to back them up with evidence, or is it slander?

I have discussed legitimate tax avoidace in a general way, Worstall is spot on, no-one should object to Ken Livingstone minimising his taxes through legitimate strategies. People like Richard Murphy, however, in a rhetorical effort to deflect attention from Labour`s fiscal catastrophe are trying to pretend the deficit is the fault of free riding parasites known as “The rich”, tax avoidance is just a stage prop for the pantomime.You think Brown would have forgotten to soak them if there was any soaking to be done ?
You have to remember there is no reality to any of this but if you are going to participate in their anti semtic money lender bashing crapola you cannot do it whilst avoiding taxes legitimately or otherwise a distinction Murphy blurs at will.

Its the same trick Labour fall back on whenever they run out of ideas , re- invent class war , find a scape goat by any means possible, even if it risks the stablity of the country and thereby the life of every hard working family in the country.

And when will you be putting your accounts on record, by the way? What right have you to throw stones in the meantime?

I think you’re missing the point. People on the right aren’t bashing Ken because he’s using perfectly legitimate, sensible methods to reduce his tax bill. They’re bashing him because he’s spent most of his career railing against the bastards who do this sort of thing.

The only way that Tim W could be hypocritical here would be if he had spoken out in favour of hypocrisy rather than in favour of tax avoidance. But, from reading his blog, hypocrisy on tax-related matters seems to be one of the things he’s most consistent about…

But Richard.

http://timworstall.com/2012/02/22/on-the-funding-of-richard-j-murphy/

I have already made exactly the same revelations about my funding sources as you have.

21. White Trash

Newnan -: “anti semtic money lender bashing crapola” LOL, splutter! U wot?

Tom -: “Is it just me or has this article spectacularly missed the point, viz. are Ken Livingstone’s tax affairs appropriate for a socialist politician? Or is it OK for a left-wing politician to practice tax avoidance but not for a right-wing one?”

You’ve hit the nail on the head there Tom. Anyone who sets themselves up as an advocate of equality and fairness inevitably has a far, far tougher task than those bums who advocate laissez faire and meritocracy. It’s in the nature of things that preaching selfishness in the first place is much easier to do.

“The desperation of the perpetually thirsty Paul Staines…”

And who are you, George Galloway?

23. Robin Levett

@Tim J #13:

Yes, but you don’t have to you know. You could set up as a sole trader, and pay staff out of your own pocket. The reason that you don’t do this, of course, is that it’s much less tax efficient.

No; emphatically not. Once you have staff, you are incurring potential liabilities as employer; the major advantage in this respect of operating through a limited liability company is pretty obvious – the clue is in the name.

How much more tax-efficient is it to pay your employees’ PAYE through a limited company as opposed to as an individual, anyway?

“Yes, but you don’t have to you know. You could set up as a sole trader, and pay staff out of your own pocket. The reason that you don’t do this, of course, is that it’s much less tax efficient.”

Actually that’s not the reason you do it.

No; emphatically not. Once you have staff, you are incurring potential liabilities as employer; the major advantage in this respect of operating through a limited liability company is pretty obvious – the clue is in the name.

How much more tax-efficient is it to pay your employees’ PAYE through a limited company as opposed to as an individual, anyway?

I was referring to running a business as a sole trader versus through a company more generally, not simply employing people. In a situation where a personal services company has one or two employees, I really don’t think that limiting employers’ liability is the determining factor in deciding whether to incorporate.

As in: I employ one person. There would be no real tax advantages for me to incorporate (though there was once a short-lived one, introduced by Gordon Brown). The risk of employer liability is not enough to get me to incorporate. If there were a sufficient tax incentive, I probably would.

26. Leon Wolfeson

@25 – Insurance is typically a lot cheaper if you incorporate.


Reactions: Twitter, blogs
  1. Will Porter

    'Corporate ignorance' at Guido Fawkes blog http://t.co/191tpJ6r

  2. David Marsden

    'Corporate ignorance' at Guido Fawkes blog http://t.co/191tpJ6r

  3. leftlinks

    Liberal Conspiracy – ‘Corporate ignorance’ at Guido Fawkes blog http://t.co/MdgNUDHU

  4. ElaineSco

    Liberal Conspiracy – ‘Corporate ignorance’ at Guido Fawkes blog http://t.co/MdgNUDHU

  5. Magnus Wills

    http://t.co/9Pfw1KWH @GuidoFawkes Perpetually thirsty?

  6. Natacha Kennedy

    @GuidoFawkes humiliates himself & demonstrates his ignorance of the functions of basic capitalism http://t.co/ddK9XfxC #hilarious

  7. Natacha Kennedy

    @theUKtoday Even #Boris is not as thick as @guidofawkes though http://t.co/ddK9XfxC

  8. Patron Press - #P2

    #UK : ‘Corporate ignorance ’ at Guido Fawkes blog http://t.co/rlqkjYuN

  9. roslinda

    #UK : ‘Corporate ignorance ’ at Guido Fawkes blog http://t.co/rlqkjYuN

  10. Peter Daly

    Harsh but fair RT @PatronPress: #UK : ‘Corporate ignorance ’ at Guido Fawkes blog http://t.co/cea0VyKP

  11. Owen Blacker

    RT @libcon 'Corporate ignorance' at Guido Fawkes blog http://t.co/HAvKBjsv

  12. Alex Braithwaite

    ‘Corporate ignorance’ at Guido Fawkes blog | Liberal Conspiracy http://t.co/4PMyXnvB via @libcon

  13. Arun Mehta

    Tim Fenton: "Corporate Ignorance At Guido Fawkes Blog." http://t.co/kM11KFSf via @libcon

  14. Daniel Pitt

    'Corporate ignorance' at Guido Fawkes blog http://t.co/191tpJ6r

  15. helpmeinvestig8

    RT @libcon 'Corporate ignorance' at Guido Fawkes blog http://t.co/HAvKBjsv





Sorry, the comment form is closed at this time.