Tax: avoidance vs evasion, bad luck vs reprehensible conduct

I find it hard to work up any sense of displeasure at the reports of multinational companies doing their utmost to avoid tax liability in the UK. The likes of Apple, Google, Amazon and Starbucks bring employment opportunities for the British and sell products that we wish to buy. Their primary duty is to maximise their shareholders’ dividends and capital gains. They would all be missed if they closed down their UK operations and left as a result of the tax regime becoming more hostile.

And that’s before we get started on the myriad ways in which our beloved government still squanders revenue receipts. To say nothing of the fact that tax avoidance is openly and legitimately promoted to the public at large via products such as ISAs, assuming of course we had any money to save after our net earnings have been bled dry by council tax and astronomical fuel and energy bills.

 

But I digress. Not long ago, in a professional setting, I encountered a telling illustration of the difference between tax avoidance (lawful) and tax evasion (unlawful) that clearly transgressed mere bad luck or poor judgment.

 

Let’s set the scene further. Suppose that a small company has just received its six monthly tax bill. The business is struggling. The boss takes a chance that he won’t be brought to book for not paying it on time, and “borrows” from the tax reserve to buy in new stocks in the hope of trading through the short term difficulties. Alternatively, as is all too often the case, he looks in turn at his overdrawn bank account and his list of overdue debtors, sees nothing there to pay the taxman, and again decides to carry on trading in the hope of better times ahead. In either case, he works every hour God sends and draws only a pittance for himself and his family, or nothing at all. If the company then goes bust, and HM Revenue & Customs is a major creditor, it may be correct to conclude that although tax has been evaded, prosecution of the boss would be unduly harsh.

 

Now go to a scenario where the insolvent corporate failure is well into six figures. Where the percentage owed to the taxman is far in excess of anything owed to trade creditors. And where the outflow from the substantial turnover in the last year’s trading evidently shows a deliberate decision not to pay tax when it had fallen due, but instead to favour trade creditors and the sole director himself, in his case involving sums equivalent to a Supreme Court judge’s gross salary (and way in excess of a Prime Minister’s). Reprehensible conduct.

You and I, the ordinary taxpayers of the UK, have to make up this shortfall – it’s not as if the government is going to squander a little less because tax evasion has had unforeseen impact on anticipated receipts. Would it be fair in this scenario to let the tax evader off with a mere disqualification, rather than prosecution? One would sincerely hope not.

"Anti-Establishment": now a virtue?

Longer ago than I care to remember, I explained in a milk round interview (which I failed dismally) that the student magazine I was then involved in editing was the local equivalent of Private Eye. “So you’re anti-establishment?”, snapped the formidable figure on the other side of the table.

Now there’s a term that has surely developed beyond recognition. Reaching for the dictionary, we find a definition that runs “standing in opposition to the conventional social, political and economic principles of a society”. The traditional pillars of the establishment once indeed included the Church of England, the monarchy, the aristocracy and the House of Lords. And they probably still do.

But what about the modern establishment? Look at a recent highly topical Conservative Home article by Mark Wallace on institutions taking a battering. The NHS, for a rotten culture that put cover up ahead of care. The Metropolitan Police, for an extraordinary attitude towards the Lawrences. The justice system, for double standards over phone hacking. The BBC and the Ministry of Defence, for turning a blind eye to reckless squandering and waste.

The list could have been expanded. How about the Met Office, for their woeful forecasting and the AGW obsession that drove it? In parallel with the Department of Energy, for driving fuel bills up and failing to ensure long term continuity of supply? And let’s not start on the EU and the political class.

In the face of all of this, looking at present day social, political and economic principles and where they have brought us, have we already reached the point where “anti-establishment” no longer carries stigma but has become a compliment?

Rush: Clockwork Angels Tour 2013, live at the LG Arena Birmingham

What, by way of a live show, can a rock band offer a dedicated follower of 33 years’ standing (and probably 10 previous occasions in the audience) that will still make a reaction such as “well impressed” a massive understatement? Here goes.

Beginning the show with Subdivisions, definitely one from my all time Top 10.

Moving on to play a collection of songs from the 80s and 90s – notably from Power Windows – that were classics of their time but would probably never have been expected in a live set again.

Showcasing three short but sweet drum solos from Neil Peart – no single multimedia epic this time – that reflect a true master of his art who is not afraid of learning new tricks.

Launching into the second half of the show with a bold innovation, wholly unpredictable – the first ever appearance of guest backing musicians, a string quintet no less. And it worked.

Playing nine songs from Clockwork Angels, one of their most ground breaking and original albums for years. For choice: Halo Effect, Headlong Flight and The Garden.

Jumping back in time for Red Sector A, another resurrected classic, before finishing off with two songs in the main set and two in the encore (guess) that would ensure everyone went away feeling elated.

Not forgetting flawless musicianship throughout, entertaining special effects and gimmicks, a completely new animated backdrop, and a genuine sense of pleasure to be before a UK audience again. And how many other bands would be offering their drummer’s books alongside the T-shirts and programmes?

Thank you for the music, Rush, once more. For me, 33 years and still counting.

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Infernal Coalition: UKIP - what fatal flaw?

Tuesday 23 February 2010

Alex broke off from reading the evening newspaper and passed it over to Susie, holding it open at the seventh page. 

“Looks like competition.”

The article was headed ‘Former Tory Councillor to contest East Worcs for UKIP’. Alex and Susie both knew of the individual concerned, Fred Donnington, who had briefly been one of their own local councillors shortly after they had moved into the constituency, before he retired. Donnington had served in the RAF before setting up a small engineering business, specialising in agricultural machinery, and after many years’ dedicated service as a councillor he was now devoting his remaining energies to the British Legion. And now, evidently, to the United Kingdom Independence Party.

“I wonder why UKIP picked him?”

“This might explain it.” Alex retrieved the paper and read an extract from the article beneath Donnington’s prominent photograph. “‘I cannot tolerate the thought of such a distinguished figure as Sir Walter Hough being succeeded by a man like his heir apparent….. It should be significant to everyone in East Worcestershire, in marked contrast, that unlike this man I openly repudiated my former political allegiance a number of months ago, and that my candidacy will provide a clear opportunity to protest against the In Europe But Not Run By Europe mantra that so foolishly sums up the modernised Conservative Party of the present day.’”

He put the paper down. “UKIP obviously wanted an ex-Tory. They’ve got one. That’s pretty strong stuff, what he’s said there, but it still doesn’t get over the fatal flaw.”

“What’s that?” Susie asked……

 

Well, who knows what that fatal flaw was, in the eyes of two fictional conservatives* thinking about the forthcoming General Election three years ago in 2010, at a time when the mainstream party most identified with traditional British values was riding high in the polls against a Prime Minister who displayed the charisma of a speak your weight machine and the economic acumen of a bull in a china shop, many weeks before the phrase “I agree with Nick” entered the English language.

But if a week is a long time in politics, what to make of three years, during which time barely a dent has been made in the size of the state; fuel and energy bills have rocketed; and the UK finds itself impotent in the face of foreign courts prohibiting the deportation of undesirable aliens? To say nothing of how the destructive might of the EU has escalated – just ask a PIGSIC nation trapped in Euroland – when the PM kicks the can down the road by reluctantly offering a referendum at some point in the next Parliament?

Maybe those fictional conservatives* contemplating this week’s elections would by now have concluded that there was no fatal flaw in what UKIP were standing for after all…..

*Deliberate avoidance of the capital C. From the back cover of Infernal Coalition: “Nor was Alex Harris’ wife Susie any more disposed to a quiet life after her new found political ambitions were treacherously derailed. Shaking off her own disappointment, she calmly struck back at the party machine that had once seemed so eager to welcome her…..”

Rush - Clockwork Angels and a Literary Trilogy

Well, that might be pushing the description of the three books in question too far. But it was still part of a worthwhile holiday reading experience from the not too distant past, mainly inspired by the aim of digging more deeply into the background story behind Clockwork Angels, the best Rush album in many years.

First up, Dead Barchetta (aka Rock Deadly), a mystery thriller by Kathryn Lively, starring a guitar teacher and tribute band guitarist called Lerxst Johnson who has the misfortune narrowly to escape being murdered – the misfortune of course being his attempted murder and not his escape – only to discover the body of his would be killer in his music studio the next day. It triggers off his ever more complicated chase for reasons and explanations, with a wholly unpredictable conclusion. Would this have been any less enjoyable a beach read if Rush had not been the recipient of Lerxst’s tribute? Not at all.

Onto the Clockwork Angels novel, where Kevin J.Anderson collaborates with Neil Peart to put a considerable amount of flesh on the bones of the album track links and of course the lyrics. Let’s say straight away that it helped make an already first class album truly outstanding. Let’s also not forget to add that “steampunk”, a word that might sound notably jarring in any sense associated with Rush, is evidently a brand of science fiction featuring steam powered machinery – introduced early on here in the form of the steamliners from “Caravan” that ferry passengers and much needed commodities to the land of Crown City, far from the mundane orchards of Barrel Arbor where undermanager Owen Hardy dreams of adventure, never knowing he is about to find it.

What about this mysterious Watchmaker, then? Evidently an all powerful dictator reaching out to oversee the whole of Albion from his headquarters in Crown City, but an apparently benevolent one, who proves to his subjects that he “loves them all to death” by bestowing Stability (with a capital S), tranquillity, a reliable way of life where even the rainstorms happen on time, an apparently prosperous economy founded on alchemy (sounds like debauching the currency with a real long term crash inevitable, but that’s another story), and of course the regular Clockwork Angels shows in Chronos Square. And who, in parallel, cracks down ruthlessly on dissent via the all powerful Regulators.

Any real world comparison? Brunei, maybe, a nation of vast wealth where the population will in all probability lack nothing, but where dissent against the Sultan’s rule will meet with zero tolerance? Possibly. It’s perhaps not surprising that Crown City proves not to Owen Hardy’s liking, even if the manner of his leaving was not voluntary, and that he goes on to seek adventure of a more rewarding nature. No spoilers, save to confirm the majestic closure of the album with “The Garden” is cleverly echoed.

So what about the third book in the trilogy? Stepping back to the seventies, we find that two Rush songs – to be exact, “Anthem” from Fly By Night and the entire first side of 2112 – owe their inspiration to Ayn Rand’s Anthem, the story of another man on a mission.

But this is no tale of an Owen Hardy, bored of contentment and finding that he can’t stop thinking big. This is the horrific diary of a street sweeper called Equality 7-2521, trapped in a bleak, oppressive nightmare world of the future where its wretched inhabitants are allocated lifelong mundane jobs upon reaching adulthood regardless of their intellect, where every waking moment of their lives is strictly controlled for the sake of the supposed common good, and where the greatest source of power and light is the candle, electricity being long forgotten. Not forgetting the fact that a powerful elite lords it over the brainwashed masses. Echoes of Cambodia under Pol Pot. Or modern day North Korea. Or the kind of nation that the most extreme climate change zealots would have us inhabit once the entire world has been decarbonised.

So Equality 7-2521 goes on an illicit voyage of discovery, first winning the affection of farm worker Liberty 5-3000 and vowing to save her from the compulsion of the Palace of Mating. Then he rediscovers a mysterious force, in a long neglected underground chamber where brick surrounds metal rails, that can make a wire glow in a glass box – only to face no option other than headlong flight when the World Council of Scholars denounce his invention as a curse. But his greatest discovery, having fled his oppressors for once and for all, is a word…

Any Rush fan will enjoy all of these. And they all stand up in their own right. Five stars for each of them.

Infernal Coalition - on Smashwords

https://www.smashwords.com/books/view/301537

I have made Infernal Coalition available via Smashwords. The link is above and will soon be on the side too.

My motivation for going beyond Kindle and Lulu was down to one factor above all, namely how impressed I have been with the iPad since recently receiving one as an unexpected gift. While it is clear in my mind that the iPad will never replace the desktop or laptop PC, and will probably not challenge the Kindle in VHS v Betamax fashion - let's face it, if you drop your Kindle on the beach, you just brush the sand off the cover and carry on - its versatility is a real eye opener. And I haven't even had to mention Angry Birds yet...

Next stop, the Smashwords Premium Catalogue and the obstacle course that this may involve. And in due course, similar treatment for Hatred Ridicule & Contempt.