After years of thinking that I was involved in what was perceived (wrongly of course) as a very dull profession, it has come as something of a shock for tax to be consistently headline news (other than on Budget Day). The trouble is that I then start to get annoyed because the reporting gives an inaccurate impression, and the morally innocent start to get caught in the same web as others who may have more to search their consciences about.
The phrase ‘storm in a teacup’ might have been coined specifically for the report about Sir Chris Hoy’s tax affairs that recently appeared in the Guardian. I am not sure if I have to declare an interest at this point, but just in case I should point out that Sir Chris waved at my 9-year old daughter Emma from the torchbearers’ bus inManchesteron Saturday, much to her delight.
Sir Chris’ alleged contribution to tax avoidance was to take a temporary loan from his company, Trackstars Limited, which he later repaid by drawing taxable dividends. Now to say that this is common practice is akin to saying that Popes are often of the Roman Catholic persuasion and that bears have been known to relieve themselves in the woods. It is no longer an offence to borrow money from one’s own company, and there is a comprehensive tax regime to ensure that neither company nor individual benefits tax-wise from so doing. In other words, this is a complete non-story, as Sir Chris very comprehensively stated.
Another slightly bizarre element of this sudden fascination with matters fiscal was the Times’ revelations about Conservative donor George Robinson, who was apparently one of over 500 directors (along with Jimmy Carr – where have I heard that name before) of a company called Romangate, which was part of an avoidance strategy that was closed down following an HMRC enquiry before it could be used to achieve any tax savings. To recast this ‘headline news’ as:
“Disclosure of Tax Avoidance Schemes regime works as intended, no tax lost to the Exchequer”
would be more accurate but less exciting, very much along the lines of my favourite Ormskirk (town of my birth) Advertiser headline:
“Man falls off bike in High Street – not hurt”.
So the moral of this story is, take your news with a large pinch of salt, and always look behind the headlines to see what the true underlying story is.