First of all, let me say a big THANK YOU to everyone who reacted so positively to my recent piece on child abuse, which was something of a departure for this blog and not an issue I wrote about lightly. Please continue to share it.
STV will have to forgive the Bampot community if it points a collective finger and laughs for days on end.
The Clumpany notes that STV’s website is today carrying this article:
It is an interesting piece which reports that “the parent company of Formula One paid just £5.2m ($6.5m) in corporation tax last year on profits of £372.3m ($463.6m) according to its latest accounts”.
It goes on to explain that
“Over the past decade F1 has made profits in the UK of around $5bn on revenue of $14.8bn – but only paid $122.9m of tax thanks to an agreement with HMRC.
This led to F1 paying HMRC at least $500m less than it would have done if it hadn’t had an agreement with the tax man. In turn this made F1 more attractive to buyers and Liberty has offered $4.4bn. However, because the majority of F1’s shareholders are based offshore HMRC will receive little capital gains tax which would be paid if the sellers were in the UK.”
Although I have no interest in Formula 1 (I would rather eat a crash helmet covered in fuel than watch a ‘race’…), this story of huge revenues not equating to large tax payments is a troubling tale of our times and is clearly in the public interest.
So well done to STV for highlighting it. Or perhaps I should say “well done to ITV in general” as the piece also appears elsewhere? For example:
Whatever the origins of the article, I note with derision that the views of the Tax Justice Network have appeared in a piece posted on the STV website:
“For a successful, global business, it’s impossible to imagine how interest rates of more than nine per cent over the Bank of England base rate could have been justified as market rates – and simply astonishing that HMRC could agree to such terms, and give up hundreds of millions of pounds of tax revenue that would otherwise have been due. It’s no surprise to see Liberty, as they look to take over the company, boasting to their investors of the ‘extreme tax efficiency’ of F1. Extreme, it certainly is – and hard to believe that HMRC could have made such agreements. This confirms the need for public scrutiny of advance pricing and advance thin capitalisation agreements. These dull titles hide the fact that they are contracts with private companies that reallocate significant public resources. Given the potential to create quite extraordinary private gains, as appears to be the case with F1, there can be no justification for their ongoing secrecy”.
Alex Cobham, Director of Research, Tax Justice Network
My scorn does not arise over Mr Cobham’s comments, or indeed the activities of the Tax Justice Network, which consistently shines a welcome light on complex and sometimes disturbing issues.
No, I – like many others – find it utterly incomprehensible that STV will happily publish comments from the Tax Justice Network but has failed to even mention the work of the Offshore Game, a TJN project whose reports have raised grave concerns about the governance of Scottish football.
The national sport.
Which much of the population is interested in.
And which is a multi-million pound industry.
It isn’t as though STV hasn’t been repeatedly reminded of the existence of the Offshore Game’s publications by their viewers and readers.
But a wall of silence remains.
You have to wonder why.
NB Other recent Clumpany offerings include: