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Tony Wickenden: Taxing the rich and the famous

Tony Wickenden Tax Planning Technical Area

After Starbucks, Google and Amazon the tax avoidance spotlight turned back to the rich and famous. Well (probably) not the richest or the most famous and almost certainly not the most popular – OK, it was Chris Moyles.

Most celebrities positively court publicity, when it suits them of course. However, in this case the “no publicity box” was definitely ticked.

Moyles asked a court to conceal his membership of an aggressive tax avoidance scheme because exposing him would “infringe” his human rights, according to The Times. Mr Moyles apparently requested that a Tax Tribunal grant him anonymity in a battle with HM Revenue & Customs over a “marketed tax avoidance scheme”. HMRC had already ruled that the scheme did not work, but Mr Moyles appealed against the decision.

Normally such appeals would be held in public, but in a preliminary hearing Mr Moyles’s lawyer argued that the press and public should be excluded because his client was “fearful” that his career would be damaged if he were exposed as a tax avoider.

The judge refused Mr Moyles’s application, stating that there was an “obvious public interest” in keeping tax cases public. “The fact that a taxpayer is rich, or that he is in the public eye, does not seem to me to dictate a different approach. On the contrary, it may be that hearing the appeal of such a person in private would give rise to the suspicion … that riches or fame can buy protection from the scrutiny which others cannot avoid.”

By the way, BBC stars are apparently required contractually to pay “an appropriate amount of tax” on BBC earnings. A spokesman for the BBC said it was “very likely” that the BBC would consider that the use of aggressive tax avoidance for BBC income was an infringement of this requirement.

The judge described the scheme joined by Mr Moyles as generating “a tax loss unmatched by an economic loss, which [Moyles] could set against his income for the year so as to reduce the tax payable.”

Once again, leveraged sideways loss relief schemes have hit the news as does the perceived and real impact of public exposure of these schemes and their users – especially if the individuals concerned are well known.

We have also seen this principle applied to corporates recently with reference to the Public Accounts Committee “investigation” of the low tax paid by Starbucks, Google, Amazon etc.

The combination of “non-statutory” media-centred action, together with the proposed new anti-abuse legislation and “enhanced” DOTAS provisions, will continue to combine to help the Treasury to achieve their “tax gap” closing objective.

Advisers need to be aware of the latest developments in this highly publicised high profile area.

I will close this week with what I consider to be a nice piece of anecdotal evidence of the current state of the Zeitgeist in relation to tax avoidance. My youngest son is an actor but (inevitably) also does a range of other jobs, one of which is as a barista at Starbucks.

Now, as Starbucks customers will know, when you order your drink you will be asked for your name by the barista serving you. The rationale is presumably to introduce a personal touch to the whole process. Some like it some don’t – that’s by the by. Just after the grilling of Starbucks by the public accounts committee was reported a lady came into Chris’ Starbucks (just up from Warrington station if any of you are interested in getting some stellar service!) and, when asked for her name, said “Taxpayer”. So that’s how far the taxation debate has entered the public consciousness. Although, as Chris says, as protests go, it was pretty crappy …”I don’t agree with the way your company handles its tax affairs so, in protest, I will order a venti latte.. and a chocolate muffin..so there!”

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Tony Wickenden is joint managing director of Technical Connection

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  1. Brilliant, she really showed those evil Starbuck franchisees.

    I bet to really show them how angry she was she didn’t tip!

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