If Margaret Hodge’s grasp of Stemcor’s company accounts is any indication of her grasp of Amazon’s or Starbuck’s then I don’t think they have anything to worry about.
In this Sky News video (via Guido) she is left floundering when asked for details of Stemcor’s profits and taxes paid upon those profits..in the UK.
Note the completely different treatment by the BBC as it runs for cover as Hodges gripes the accusations ‘were “completely wrong”, adding that they were “scurrilous and defamatory’:
Margaret Hodge taking legal action on Stemcor tax claims
As the BBC’s Jo Coburn says…’Alright I hear that loud and clear!’…and Goodnight!
Stemcor denies that its use of Transfer Pricing is a device to avoid tax…though it says that ….‘Other international companies may possibly use transfer pricing to avoid or evade tax in high tax jurisdictions. Any suggestion that Stemcor has followed such practice is libellous.’
So Stemcor pays all the tax it legally has to. That’s for sure. No doubt.
Stemcor is a company that seems to be getting more efficient, making more profit per ton traded than before the recession began….and yet in 2012 it says it lost money.
Here are some figures from 2005 comparing performance with 2011:
In 2005 it had a turnover of £180m per 1m tons traded, and made £1m pre-tax profit for every £145m of turnover.
In 2011 it had a turnover of £353m per 1m tons traded, and made £1m pre-tax profits for every £100m of turnover.
In other words by 2011 it had almost doubled its 2005 turnover on a similar amount of trade and multiplied its pre-tax profit by almost 1.5 times….and paid only £163,000 in tax to the UK in 2011 on £2.1 bn of revenue generated in the UK…with £4bn generated in the rest of the world.
…and yet it lost money in the UK…despite the UK generating 1/3rd of its revenue……
The Telegraph , (in a report it had to withdraw) said that Stemcor’s accounts showed that:
Stemcor’s tax bill to the exchequer equates to just 0.01pc of the revenues it booked through its UK-based business. In accounts filed with Companies House, Stemcor revealed that despite generating about one third of its revenues in Britain, its UK tax contribution made up only 2.7pc of the tax the company paid globally. (On my calculations…Stemcor made £65m in profits in 2011…so if 2.7% is £163,000[UK tax contribution] then 100% is £6m paid in total……which is a rate of 10.8% tax on income of £65m? Stemcor says it paid tax rates of around 40%….I guess I must be missing something somewhere)
Those are facts that aren’t disputed…what the Telegraph did question was whether Stemcor used any measures to lower its tax bill….Stemcor saying, despite the UK generating 1/3rd of its revenues:
‘The tough economic environment in the UK squeezed margins during 2011, resulting in a loss of £2.9m on UK operations, which reduced Stemcor’s UK tax payments compared to prior years.’
Stemcor is making vastly more money per trade…and yet is losing money. Times are hard.
Ms. Burley seemed on a real roll, especially when asking about remarkably low Stemcor percentages on par with equally low percentages, equally legally-arrived at by all accounts (see what I did there), from Ms. Hodges’ preferred targets of outrage.
Shame she did not bust her on her fluster as Ms. Hodge was unravelling to a quite spectacular degree at one point.
This is what I keep saying about the BBC. The disease has gone so far they’re no longer just biased, their stuff even fails as actual journalism.
What about all that talk of speaking truth to power and holding authority to account? Margaret Hodge claims that just because Google hasn’t, strictly speaking, done anything illegal, they should still be treated as though they had. Meanwhile, her own company gets a pass because they haven’t done anything illegal.
Huh?
Looks like the only criteria for victimisation appears to be whether or not a company has sufficient influence or not. It’s like something out of a banana republic, but the BBC can’t see problem with politicians arbitrarily pronouncing on guilt or innocence without the formality of actual law.
That is not the worst – the worst that Hodge the Dodge is involved in was the systematic rape of children in Islington Child Care homes, which she covered up for years. She should be in jail. Google for it.
The woman is a walking disaster area! Marvellous !
I wish there was a Citizens’ Committee that could haul in MPs like Mrs. Hodge and call them to account.
It would be nice too if that committee could be as outright rude and unlistening as Mrs. Hodge appeared to be on the various BBC News reports.
Personally, as a taxpayer myself, I, perhaps naively, believe that the less tax a company pays the cheaper its services are to me. I trust Google to spend its income better than Mrs. Hodges pals Blair, Brown, Balls and Miliband.
Mrs. Hodge’s own shareholdings are in excess of £1.8M (a woman ‘of the people’ obviously). She also has shares in her children’s names and trusts. Both of these are legal tax avoidance measures. Failing scrutiny by the Citizens’ Committee wouldn’t it be nice if the BBC asked if avoiding tax like this was a moral option?
What about a Committee of Public Safety citizen?
“On my calculations…Stemcor made £65m in profits in 2011…so if 2.7% is £163,000[UK tax contribution] then 100% is £6m paid in total……which is a rate of 10.8% tax on income of £65m? Stemcor says it paid tax rates of around 40%….I guess I must be missing something somewhere” …………….. From publicly available figures:
Profit before tax £65m
Taxation £27m
taxation as a %age of profit 41.53%
http://www.stemcor.com/Profit-and-Loss-Account.aspx
Alan:
Albaman…you haven’t got the hang of this site yet…it’s called BBC Bias…therefore the aim of the post was to ask why the BBC doesn’t treat Hodge in the same way it treats companies like Amazon and Google.
Who do we believe then…Stemcor or Stemcor? Stemcor’s accounts say they paid £27 m in taxes….Stemcor told the Telegraph that they paid £6 m in taxes worldwide.
Who to believe?
Let’s look at Amazon…and who to believe…Amazon or Amazon?
http://www.dailymail.co.uk/news/article-2325848/Amazon-faces-new-4billion-quiz-Company-join-Google-fresh-grilling-MPs-tiny-tax-bill.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490
The company, which sells everything from books to bread, said it paid just £2.44million in corporation tax on UK sales of £320million last year.
But the Seattle-based group told its investors that it actually made 13 times this amount, claiming the UK sales were actually more than £4billion.
No doubt Stemcor is completely above board and genuinely only makes 1% profit on £6bn turnover…but Amazon shows exactly what can go on out of sight.
Stemcor say they made £163,000 profit in the UK in 2011 and that that was 2.7% of their global tax…which means they paid £6m…or you can believe the accounts and which say they paid £27milion.
All of which more than suggest that the BBC should be asking some questions…don’t you think?
But just like Google are painted as obfuscating over sales and where they make their profit you could say the same about Stemcor and their assessment of their profits, couldn’t you?
Nice edit Alan that conveniently edited out any “likes” my original comment had. Censorship – what censorship!!! I guess publicly available documents prepared by accountants, certified by auditors, and lodged with Companies House are less stringent evidence than your “back of an envelope calculations”.
Alan:
Paranoia Albaman?….If your ‘likes’ disappeared it’s a technical issue…nought to do with me…you can put them back in can’t you.
Back of the envelope? Just working on Stemcor’s own figures….which set you believe is up to you.
As I say, it’s about BBC bias…will the BBC quiz Hodges as they do Amazon & Co….there is a big difference between what Stemcor told the Telegraph and what their accounts say….you obviously have no problem with that….whereas I think it’s the BBC’s job to ask difficult questions.
And I note that your ‘likes’ are still there….once again…maybe your counting isn’t so hot.
Is editing posts in this way not abusing your “preferred commentator” role?
Alan:
Albaman…Your post isn’t edited….it remains intact..perfect just as you intended…..just with my response added below.
I assume you would like some separation between your comment and my reply because you don’t like your comments being subject to criticism for all to see.
Can’t blame you.
Are we all e allowed to do this then? No, thought not.
Alan:
Albaman…You and our friends are always desperate to get the first negative comment in on any thread…it’s a well known trick….trying to fix the perceptions of any commenter who follows…..and thereby the perception of the post….
And I can’t really see what your gripe is…you presumably want a reply from me..and you get one….problem?
Our visitor from the BBC canteen is correct as far as he goes ie that Stemcor, like every other company in the UK, pays corporation tax on profits not turnover. Of course, in his invincible mendacity that same visitor ignores the fact that “profit before tax” in a company’s accounts are not the “profits” on which tax is computed eg “depreciation” per accounts is not allowed for tax purposes but are replaced in tax computations by “capital allowances” set out in the UK tax code. Over the years profits for tax purposes and “real” profits work out more or less the same but taking one year’s calculations as an indication of “tax good citizenship” or the reverse is dishonest and deliberately misleading.
Anyway, attacking Stemcor (which AFAIAA is a legitimate business paying its legal tax obligations) is a diversion from the real issue here. Lady Hodge is leading a fight against the rule of law. Either tax is paid according to a pre-defined set of rules enshrined in law or it is – as Lady Hodge and the BBC together with its favoured commentators like the Tax “Justice” Network wish it – an arbitrary imposition the extent of which is decided by bien pensant bureaucrats, politicians and various apparatchiks on a day-to-day decision of what constitutes “good” tax citizenship.
As well as being a dangerous quasi-fascist and an enabler of the covering up of child abuse Lady Hodge is a hypocrite of world-class proportions. Her hypocrisy comprises benefitting from the avoidance of IHT by her father in setting up a trust for his children. Of course, no-one at the BBC (and, to be fair, most of the MSM also) mentions this, at least, to listeners and viewers.
“Our visitor from the BBC canteen………………….”. Never been to the BBC never mind its canteen.
Fully aware of how financial statements are constructed and how “profit” is determined by deducting allowable expenses and other tax allowable deductions from turnover. However, the figure provided clearly shows that taxation liability in 2011 was £27m, not the £6m quoted by Alan.
“Anyway, attacking Stemcor (which AFAIAA is a legitimate business paying its legal tax obligations) is a diversion from the real issue here.” ……………… Sorry, was an attack on Stemcor not a significant part of Alan’s post which his error of £21m somewhat invalidates.
My comment was, in part, a criticism of Alan and, in part, of you. There’s no point in either attacking or defending Stemcor since the important issues and the real hypocrisy lie elsewhere.
It just so happens that Lady Hodge is a beneficiary of a trust which holds shares in Stemcor. Even if the trust had disposed of all its shares in Stemcor and invested the proceeds in gilts, Lady Hodge would still be a world-class hypocrite since part of the purpose of settling the trust was to avoid IHT from which avoidance she clearly benefits. There’s no getting round that point but it seems to have escaped the attention AFAIAA of the BBC and, as I commented, most of the MSM also.
What Hodge is guilty of is gross hypocrisy – you are not morally obliged to pay any more tax than the regulations demand.
So Google and Amazon do just the same as Stemcor – they obey the regulations – if they didn’t they would be prosecuted wouldn’t they?
If Hodge is dissatisfied with the tax system she should try to change it rather than trying to guilt trip those who can afford expensive tax lawyers – it is rather like criticising someone for being well dressed just because they can afford to buy their clothes from a tailor.
At the end of the day Hodge will find that she can’t change the tax regulations because they are determined by the EU – something of which, I assume, she is in favour.