Lincoln Drill Hall

Lincoln Drill Hall
Lincoln Drill Hall

Monday, 23 March 2009

The Crunch by Alex Brummer

The interested reader of the financial pages will almost certainly have some idea of the causes of the woes that have hit the world economy. We all knew that borrowing had hit crazy levels; we all knew that house prices were defying gravity.

Words like toxic debt and sub-prime have been the stuff of bar room chat, but Alex Brummer has drawn the strands together and produced a coherent narrative. It is deeply depressing. It makes the calmest of men don the witch hunt uniform.

What is probably the worst of all, though, is that the cream of a generation, the very best brains, have been engaged in what is really the most enormous fraud. It is breathtaking stuff.

Wednesday, 4 March 2009

Tax Avoidance

The dust is settling a little after the Guardian's crusade against the evil tax avoiders. There are to me two points which need to be made.

In the UK, Public companies owe a duty to their shareholders. In exercising this duty it is generally considered reasonable that they should minimise costs and maximise revenue. If taxation, which is a cost, is not to be minimised then they would be failing in their duty. So the answer is not to wring hands, but to open a debate over the duties of directors of public companies. If, however, taxation is a distribution of profits in the same way as dividend then the tax needs to be maximised. But what then about employee remuneration; is it a cost or a distribution? What about local taxes? This subject needs proper debate.

The second point is banal, tax avoidance is as old as the hills. I spent most of my career advising clients on how legally to minimise their tax bill. But the question is the same; is tax a cost or a distribution?