Google tax deal, sugar tax, crowdfunded project collapses, and of course Brexit!
Osborne under fresh pressure over Google tax deal – The shadow chancellor John McDonnell has written to George Osborne urging him to contact French authorities to obtain any fresh evidence on Google’s tax affairs, after French prosecutors raided the firm’s offices in Paris. The French government believes it is owed €1.6bn in tax. HMRC had said it could revisit Britain’s back tax agreement with Google if new material were to come to light. Critics of the UK deal say Google effectively paid just 3% tax over the 2005 to 2015 period covered by the settlement, 10 times less than the French are asking for. In the letter, Mr McDonnell asked if HMRC had approached French counterparts. “I’m sure that you now regret labelling the UK tax deal agreed with Google as ‘a major success’ as independent tax experts have consistently branded the deal as ‘disproportionately small’ ever since and in comparison to deals struck with other countries we’re clearly losing out,” he wrote. However, the Chancellor defended the £130m deal. Mr Osborne said: “It is good news that we are collecting money in tax from companies that paid no tax when the Labour Party was in office.”
Coca-Cola boss says sugar tax won’t work – The general manager of Coca-Cola UK & Ireland has attacked George Osborne’s sugar tax, declaring that it will not work and that it will hit the poorest hardest. Writing in the Telegraph, Jon Woods said: “There is no reliable evidence from anywhere in the world that shows taxing food and drink – let alone just some soft drinks – has changed people’s behaviour and made them thinner.”
Small and medium sized enterprise
£1m crowdfunded project collapses – In one of the largest failures of a crowdfunded business in the UK, administrators have been appointed at Solar Cloth Company. The business raised £967,130 from 400 individual investors on Crowdcube in January 2015. Since it comes so soon after funds had been secured, the failure will heighten questions over the quality and accuracy of pitches being presented via equity crowdfunding sites, the Times notes. Rob Murray Brown, an adviser to crowdfunding companies, said: “The Solar Cloth Company has become Crowdcube’s biggest failure to date… Market conditions are to blame, according to the management. We think Crowdcube are to blame. They cannot keep running away from the responsibility of promoting half-baked ideas, with ludicrous projections, on their platform.’’
UK economy, finance and markets
UK borrowing higher than expected in April – Government borrowing was higher than analysts’ expectations in April after forecasts for company tax payments were lower than estimated. The ONS said borrowing, excluding support for state-owned banks, was £7.2bn in April, down from £7.5bn last year, due in part to weaker-than-expected income from workers’ NICs and falling tax income from companies, as corporation tax revenue fell 5.1% from a year earlier to £5.8bn. The ONS said that total public sector net debt – excluding public sector banks – by the end of April stood at £1.596tn, the equivalent of 83.3% of GDP. The ONS also revised up its estimate of the amount borrowed in the financial year to March to £76bn, £2bn more than its previous estimate and £3.8bn above the prediction made by the OBR. Martin Beck, senior economic advisor to the EY ITEM Club, echoed that view: “This looks to be a tall order, particularly given that the recent weakness in activity appears to be dampening growth in tax receipts,” he said.
Osborne and Cameron’s dodgy dossier – Peter Oborne states in the Mail that if a company director presented a prospectus on the London Stock Exchange on the same basis as the Treasury case against Brexit, he – and his chairman, his accountants and advisers – would risk prosecution for fraud.
Carney overplaying Brexit risks – Richard Sharp, an external member of the Bank of England’s financial policy committee, has criticised Mark Carney for overplaying the economic risks of leaving the EU. He said that he disagreed with Mr Carney’s view that Britain’s reliance on foreign investment could trigger a severe downturn following an Out vote in the referendum.
Hilton: We must quit EU – Steve Hilton, a former advisor to David Cameron, has said Britain must leave the “arrogant and unaccountable” EU. Writing in the Mail, he says the EU serves the technocratic elite – “the bankers, bureaucrats and accountants who run the modern world”. When globalisation and privatisation, of which he is a fan, is combined with centralisation, “the result is an unhealthy concentration of economic and political power that is fundamentally hostile to my belief in individual freedom and social responsibility”.
Elsewhere, Roger Bootle, executive chairman of Capital Economics, suggests in the Telegraph that the euro is a disaster and that despite recognising this, Remain campaigners argue it is unrelated to EU membership. Mr Bootle questions this logic and, bearing in mind the effects the euro has had, fears future EU devices, such as a common pensions policy or tax harmonisation. The EU must move to fiscal and political union for the euro to survive. Should the euro break up, Mr Bootle says “it is clear that we would be in more danger if we were inside the EU at the point of collapse.”
Christian Elmes, Partner
Christian Elmes trained at PwC and qualified as a chartered accountant in 1999, before moving to Morgan Stanley (2000-2002) as Associate in the Investment Banking Division (IBD).
He was appointed Director of Finance, Teather & Greenwood Investment Management in 2002 and moved with the Tax Efficient Solutions team to Smith & Williamson in 2004, becoming Deputy head of the department. He left to co-found Enterprise in 2011.
Over the last ten years, Christian has been responsible for developing a number of tax efficient products, particularly Enterprise Investment Schemes. He is able to lead on tax efficient product development from inception through to completion, because of his financial and tax background and commercial experience.
Christian is competent across a broad range of sectors including, leisure and hospitality, media, property and renewable energy.
Christian is a non-executive board member to a number of leisure and hospitality companies, Casper & Cole Ltd, Wright & Bell Ltd, Albion & East Ltd, Camm & Hooper Ltd and Darwin & Wallace Ltd.