Month: January 2012

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Redknapp & the tax-fiddling dog

In my YouTube video (Tax Evasion for Pets) Kim the tax fiddling collie opens her own bank account… 

As the trial progresses we will learn more about what Redknapp was allegedly up to, but this article should help you understand what went on, according to HMRC’s lawyers…

Back in the day – when I was a Tax Inspector investigating suspected tax fraud, it was not unusual to find money stashed away in other people’s names. The fiddler would often set up accounts in the name of his or her spouse, parents or children. I must say Harry Redknapp’s case – where the account was named after his dog – is taking things to a whole new level…

When Redknapp flew to Monaco to open the account, that account was apparently called ‘Rosie 47’ – named after his dog plus the year of his (not his dog’s) birth. As the trial continues we are yet to hear from Mr Redknapp about the money lodged to this account, but it seems that when quizzed he kept changing his story about how the money ended up there. It was an investment…a gift…a loan…employment income…none of these…

This is no surprise to those of us handling tax investigations, albeit now on the side of the client. When someone is backed in a corner he panics. He starts spouting off random explanations for where the money came from. He thinks he can guess which answer shows him in the best light. When probed further he retracts that line and takes another.

The real reason Redknapp is in the dock is not for failing to declare the money (HMRC could have settled that quietly with him.) The real reason is that he was under investigation by the Revenue concerning previous bonus payments – and ‘forgot’ to mention the Monaco account and lodgements.

In almost all high-profile prosecutions there is an aggravating factor. The ancient Lester Piggott tax case is another example. There, as in the Redknapp case, in the process of a tax investigation the suspect thought it was still a good idea to conceal the truth. That’s when cuddly Mr Tax-Man turns nasty and starts thinking about court!

This case should provide good viewing over the next couple of weeks, especially if Harry Redknapp chooses to take to the stand and try to explain what he was at. One wonders…is there an innocent reason to fly to a tax haven, name a bank account after your dog, and then conceal its existence from your accountant and the tax people?

HMRC and the Police believe the money paid into Redknapp’s account by the former Portsmouth FC chairman Milan Mandaric were part of Redknapp’s share of a commission on transfer payments. The prosecution is of both Redknapp and Mandaric for ‘cheating the public revenue’ by avoiding tax on the payments. This is standard wording used in tax trials.

Some readers will be surprised that Redknapp hid the money from his accountants as well as HMRC. In fact this is normal practice with people cheating HMRC. They know that by telling their professional adviser, that person will be duty-bound to declare it to HMRC. If they change accountants over the row, then the new accountant should learn about the issue from the former one.

If you, or one of your pets, have been suspected of tax evasion, make sure you seek specialist tax help as early as possible. It could save you many thousands and could keep you out of jail. Call Adrian Huston or Felicity Huston on 028 9080 6080.

Tax Help joins the YouTube age

I write this as my YouTube channel marks an important milestone. Videos on it, offering free tax advice, have now been viewed a total of 10,000 times. 

This is great news for those in search of free tax help – since the success of the channel means I will continue to record and post videos on it. The channel is at www.YouTube.com/HustonTV

I thought readers might be interested in learning why I set up the channel and which videos have proved of most interest.

Back in 2009 (and in digital terms that’s a long time ago) I realised there really was no-one offering video help with tax matters for the UK. A few people were doing it Stateside. If you were worried about your tax all you could do was go on the terrible HMRC website (still not great in 2012) or search online for an article posted by someone. I felt there was surely an unfulfilled desire for the information to be put out differently. Visual seemed to be the way forward. I am pleased to see that since I started a few others, including the professional press, have started dabbling, though some charge for watching the videos.

So out came the camcorder. Out also came my good friend Bill Jeffrey – a veteran commentator on business issues. I reckoned Bill, with his wealth of experience in front of theatre audiences, TV and movie cameras, was just the man to interview me on camera.

Before I used Bill, the first few videos were simply a recording I did sitting in my living room. It was around the time MPs were getting grief for having taxpayer-funded second homes. I did a few videos, one on the MP’s thing and a couple for landlords and people selling their holiday homes or let properties.

Of course I am in business as a tax consultant and accountant. So these videos have to do more than offer free tax advice – they need to grow our business. Thankfully they also bring in new clients. People often have a look at the video and then decide to give us a call. Like all social media used in commerce, it needs a certain amount of managing, and needs to form part of the strategy for promoting our business. For a while we had a separate website showing the videos, but that dissipated our numbers of hits. So when we redesigned our web presence all was brought together under one site, from which people can depart to view the videos.

These early videos on rents and CGT have been the most popular and continue to be viewed to this day, clocking up some 1,400 views each.

The thing about having your own YouTube channel is you might use it for personal as well as business items. (Note to HMRC – The channel is free – so I am not claiming tax relief on personal expenses.)

When my son Alex Huston stood up and addressed the House of Commons (in a sitting of the UK Youth Parliament) I was able to post the recording online so friends and family could see it. It was an immediate hit, currently sitting with over 800 views.

When our other son – under-18 British Champion archer Patrick Huston – makes a TV appearance, his will also be posted, allowing his mates, coaches and fellow competitors to see it.

Back to the tax side, then, which tax videos are most popular and remain on the current site?

Renting out property – the tax rules.

Capital Gains Tax on second homes.

Jail for married couple over tax fiddles.

With a YouTube site offering advice I do find from time-to-time that I will take a video off the site. There may have been a time limit on its validity, or the rules may have changed. Some popular ones stay on because people are still viewing them and they have been mentioned elsewhere on the web, so I don’t want someone else to have a link to a video which then won’t work.

What, then, pushed the channel over the 10,000 views mark? Well it was my video about how Tony Blair’s companies bring in over £12 million yet minimal tax is paid. This followed my article on the same subject in the Belfast Telegraph. When I blogged on this subject I got national attention.

Finally, thank you to all those who are part of the first 10,000 viewers. I look forward to the next milestone.

Adrian Huston, a former tax inspector, is a director of Belfast tax and accountancy firm Huston & Co – www.huston.co.uk or 028 9080 6080.

My tax question for Tony Blair

My latest YouTube video poses the following question for the former Prime Minister:

Tony Blair – have you been tax resident in the UK each year since you left Downing Street?”

My reason for wanting that question answered is my suspicion that with the low tax bills his companies pay, and the very low number of days Tony Blair spend in the UK, Tony Blair Inc (the casual name given to his myriad of companies and partnerships) benefits substantially from him being non-resident for tax purposes.

I go into more detail in my Blog post which has had fantastic reader numbers, called Tony Blair’s Tax Bill Mystery.

None of the statements I have seen which were put out by Tony Blair’s spokesman have confirmed that he has remained UK resident for tax purposes since leaving office as PM.  If he is non-resident then this could go some way towards explaining how one of his companies managed to spend £8 million in tax-allowable expenses in the year to 31 March 2011. (It could have been paid to offshore entities ultimately controlled by Tony Blair).

You can access the video here or via my free tax articles website www.YouTube.com/HustonTV

Tony Blair’s tax bill mystery

May 2013 Bloomberg quotes Adrian Huston and puts Adrian’s tax questions directly to Tony Blair.  Read their article here.  My blog below was published Jan 2012 and has been read by thousands.

The Daily Mail reports that former Prime Minister Tony Blair’s earnings have soared by 42% to £12 million.  Despite this the tax bill was only £315,000.

Wouldn’t we all like a situation like that?

Many of his financial dealings are hard to pin down due to the use of partnerships (Limited Partnerships and Limited Liability Partnerships) and business structures which do not have to publish full accounts of their income and expenses. This level of complexity, something he criticised when in power, is not necessary to organise the activities of one man, no matter what his spokesperson says.

Despite the complexity, figures are available for Windrush Ventures Ltd.  Its only share is owned by Bircham and Co Nominees Ltd. Thankfully company law requires the accounts to show who is really in control.  The accounts state “The ultimate controlling party… is ACL Blair.”

Or Tony to his friends.

Anyone can access these accounts, and I have details of how you can do so at the end of this article. Having analysed them I can share with you some of the interesting bits.

Key points of Tony’s company accounts for Windrush Ventures Ltd are:

  • Turnover was £12 million

  • Salaries, including to the directors, totalled £2.3 million

  • Premises rent etc totalled £637,000

  • The accountants made £44,000.

  • No dividend was paid.

  • The corporation tax due was just £315,000

  • This leaves over £8 million in expenses, with no explanation.

  • Three directors served in the year to 31 March 2011 – Catherine Jane Rimmer – British(DOB 21/3/67), Jason Samuel Searancke – a New Zealander (DOB 28/4/68) and Joanne Alice Gibbons (Jo Gibbons) – UK resident (DOB 25/12/63 – who resigned on 7 October 2010.)

  • The highest paid director received in total £200,000 in the year.

  •  In total the directors earned £481,000.  One director received £70,000 compensation for loss of office.

It is not clear whether these accounts include the fees Tony Blair receives as an adviser to JP Morgan – the American bank, or his fees from Zurich International.

The big question here is how did this company spend over £8 million in ‘expenses’?  Most of them were tax-deductible as the small tax bill proves. Of course there will be travel and accommodation costs, and normal office costs, but a million pounds would go a long way in handling all that.

In response to the Daily Mail a spokesman for Tony Blair said “

‘Tony Blair continues to be a UK taxpayer on all of his income worldwide. There are more than 120 people working on all his activities around the world. His companies are all UK registered for tax purposes, and the corporate structure has nothing to do with tax arrangements, but is simply to effectively administer his activities.

‘These figures are not his earnings from Windrush but are the costs of all that Tony Blair does through Windrush. The Windrush accounts are prepared in accordance with the relevant legal, accounting and regulatory guidance.’

As a tax consultant with hundreds of British clients abroad, I have a theory. One perhaps an investigative journalist or blogger might like to pursue.

Is Tony Blair actually non-resident for tax purposes.  If he is resident for tax purposes then why doesn’t his spokesperson just say so. 

In my scenario, so long as he is deemed to be working full-time abroad, and his overseas activities could support that line, then this option may be available to him.  To keep this special tax status he will only be allowed to be in the UK overnight on 90 days per year. That restriction is probably not a problem given the time he spends in the Middle East.

Maybe some of this explains why he isn’t Lord Blair, yet.  Peers (Lords) must be “resident in the UK for tax purposes and accept the requirement to remain so”.

Perhaps someone could ask Tony directly:

1. “Are you resident in the UK for tax purposes?”

2. “Have you been resident in the UK for tax purposes from the date you left office as PM until now?”

The company number for Windrush Ventures Ltd is 6397276 and anyone can view the accounts by going to the Companies House site here

Adrian Huston is a former tax inspector, is a director of Belfast tax and accountancy firm Huston & Co – www.huston.co.uk or 028 9080 6080