MPs slam 'utterly immoral' tax advisers as Starbucks pays up

Margaret Hodge

Tax consultant admits to seeking out loopholes to help his wealthy clients avoid tax

LAST UPDATED AT 14:47 ON Fri 7 Dec 2012

STARBUCKS may have grabbed the headlines by agreeing to pay £20m corporation tax over the next two years after its humbling appearance in front of the Commons Public Account Committee (PAC), but the news will have done little to calm MPs who yesterday lambasted the "utterly immoral" financial advisers who help their clients avoid paying tax.

After hearing yesterday from tax advisers and operators of tax avoidance schemes, Margaret Hodge (above), the Labour MP who chairs the committee, accused them of "running rings" around the authorities.

PAC members questioned three tax experts in what The Times described as a "volatile hearing that exposed the scale of tax avoidance by the wealthy".

They "listened incredulously" to one witness, Aiden James, who explained how he had set up artificial tax structures for hundreds of wealthy clients. "In a packed committee room, Mr James was brazen in admitting that his company exploited loopholes to shelter large sums of tax," said the paper.

When Hodge suggested that his schemes, which included one based around selling second-hand cars, were "purely about using the tax law to get an advantage that Parliament never intended", he stunned MPs by agreeing.

Hodge said she was "grateful" he had been so honest but said his evidence had been "pretty gobsmacking".

PAC members also heard how the Pirates of the Caribbean film franchise was partly bankrolled by rich British investors trying to avoid paying tax, reports The Independent.

"Members of a legal tax avoidance scheme used a loophole in legislation, designed to increase investment in making British films, to buy the world distribution rights to two of the hit Hollywood movies which had already been made," explained the paper.

Hodge said it was "potty" that the rich had been able to avoid tax by investing in an American movie using a scheme designed to benefit the British film industry.

There has been a sudden surge in interest in the work of the PAC, notes The Guardian, as tax avoidance and tax management become “an increasingly politically charged issue”.

On Wednesday, George Osborne announced an extra £154m over two years top fund new HMRC tax inspectors in a bid to clamp down on avoidance. · 

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Yes these corporate companies & their tax advisers are immoral but MPs calling them that bit like the kettle calling the pot black

So companies use legal workarounds to avoid paying tax and the MP's call it "immoral"? It's no worse than paying into an ISA to avoid tax on savings.

If we are talking about morals the MP's need to get their house in order first. They could always close the loop holes that allow tax avoidance.

Firstly the joke is that corrupt and wasteful politicians believe that they have a divine right to take away people's and companies hard-earned money.

The second joke is that having devised laws to do just that, the politicians who break rules on their expenses actually have the gall to say that companies or individuals following the tax rules should be doing more than following the rules.

Perhaps if these jokers firstly stopped wasting all our money and then secondly stopped their fraudulent activities then we might possibly listen to them preaching from the pulpit.

Why on earth would you pay taxes you can avoid paying - using legal means?!!! and why are these pontifying members of government pretending to be gobsmacked and horrified at such ingenuity? Did they missed a good opportunity maybe to do likewise (I am joking of course - although on second thought...)?

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