The Good Law Project
- Thread starter Tony L
- Start date
ks.234
Half way to Infinity
As we await the details of Chancellor Jeremy Hunt’s second budget announcement, we’re warned that there will be no big ‘giveaways’ for the average consumer. The cost of living crisis will carry on getting worse for those on the average income. Many of us will face even higher energy bills and higher council tax from April.
Yet whilst the income of the average person pays a tax sum of around 40% – once you include employer’s and employee’s national insurance contributions – private equity fund managers earning seven or eight figure salaries pay just 28% – thanks to a tax break from HMRC.
Sign the petition to close the tax loophole here:
Sign the petition
‘Private equity firms’ are a controversial type of investment firm where managers buy businesses, with a goal of increasing their value, before eventually selling the company at a profit. Often they do this by loading the company up with debt and making widespread redundancies.
Private equity executives take a share in the profits of the funds that they manage – called ‘carried interest’. Whilst they pay nothing for this stake, they often stand to get hundreds of millions of pounds, shared between a small number of executives. Carried interest can therefore make you seriously wealthy. But most private equity execs pay just 28% tax on this income – much less than, say, the average head teacher does on their income.
This is because of the ‘carried interest’ loophole, which means that private equity executives’ returns are taxed as capital gains, at only 28%, rather than trading income, at 48%. This loophole wasn’t made by Parliament – but by HMRC after successful lobbying from the private equity industry in 1987.
A new peer-reviewed analysis by Dan Neidle, former head of tax at one of the largest law firms in the world, argues that agreement is unlawful. Whilst, for years, people have been arguing about whether the carried interest loophole should be abolished, Neidle says it never existed at all. HMRC isn’t allowed to give sweetheart deals. And, were this loophole to be closed, HMRC would collect an estimated £600 million more in revenue each year, from just a couple of thousand people. To put that into context it would cost the Government £544 million to expand free school meals for three years for children from lower-income families in the UK.
Good Law Project has been looking at this issue for some time. We are taking advice from a leading KC on whether to bring judicial review proceedings to force HMRC to apply the law properly – with no special favours for the private equity industry.
Thank you for all your support,
Good Law Project team
Good Law Project only exists thanks to donations from people across the UK. If you’re in a position to support our work, you can do so here:
Donate
Yet whilst the income of the average person pays a tax sum of around 40% – once you include employer’s and employee’s national insurance contributions – private equity fund managers earning seven or eight figure salaries pay just 28% – thanks to a tax break from HMRC.
Sign the petition to close the tax loophole here:
Sign the petition
‘Private equity firms’ are a controversial type of investment firm where managers buy businesses, with a goal of increasing their value, before eventually selling the company at a profit. Often they do this by loading the company up with debt and making widespread redundancies.
Private equity executives take a share in the profits of the funds that they manage – called ‘carried interest’. Whilst they pay nothing for this stake, they often stand to get hundreds of millions of pounds, shared between a small number of executives. Carried interest can therefore make you seriously wealthy. But most private equity execs pay just 28% tax on this income – much less than, say, the average head teacher does on their income.
This is because of the ‘carried interest’ loophole, which means that private equity executives’ returns are taxed as capital gains, at only 28%, rather than trading income, at 48%. This loophole wasn’t made by Parliament – but by HMRC after successful lobbying from the private equity industry in 1987.
A new peer-reviewed analysis by Dan Neidle, former head of tax at one of the largest law firms in the world, argues that agreement is unlawful. Whilst, for years, people have been arguing about whether the carried interest loophole should be abolished, Neidle says it never existed at all. HMRC isn’t allowed to give sweetheart deals. And, were this loophole to be closed, HMRC would collect an estimated £600 million more in revenue each year, from just a couple of thousand people. To put that into context it would cost the Government £544 million to expand free school meals for three years for children from lower-income families in the UK.
Good Law Project has been looking at this issue for some time. We are taking advice from a leading KC on whether to bring judicial review proceedings to force HMRC to apply the law properly – with no special favours for the private equity industry.
Thank you for all your support,
Good Law Project team
Good Law Project only exists thanks to donations from people across the UK. If you’re in a position to support our work, you can do so here:
Donate
Dave H.
Revolutionary relativist
Seems that Sunak et al have found a way to throttle the Good Law Project and evade accountability.
At the risk of being melodramatic, reading this makes it feel like a dark day.
We are pleased to share with you that, after months of negotiations with Ministers, we have settled a number of historical cases about their sleazy pandemic procurement practices.
The terms are that Good Law Project will pay £60,000 (half of Government’s costs) in one of the cases (the Hanbury case). In the other three cases (Bunzl, Immensa and Pharmaceuticals Direct) each side will bear its own costs.
We’d like to explain the deal – and why we’ve agreed to it.
In our first two procurement cases – you can read them here and here – the High Court accepted we had standing. It is obvious, you might think, that there is a public interest in transactions whereby Conservative Ministers channel billions in public money to their donors and associates.
However, those early successes generated Ministerial threats against judges, culminating with this press release. In it, Rishi Sunak threatened to bypass Parliament and change the law to stop Good Law Project challenging his Government – unless judges acted. And since that press release we have not been found to have standing in any case.
What this frightening sequence of events reveals about the fragility – and power bias – of the rule of law in the UK is the subject of Bringing Down Goliath. But, as far as Good Law Project is concerned, the new reality was that, however appalling the Government’s pandemic misconduct, we could not expect to win these cases.
We contemplated continuing the litigation anyway – the transparency alone is important to us.
But Government lawyers, no doubt under huge pressure from Ministers, acquired a further ugly habit – of running up oversized cost bills. A witness statement revealed there were only 168 judicial review cases in the last ten years where costs exceeded £100,000 – out of over 17,000.
But in our cases, their costs were high six figure sums and, on several occasions, exceeded £1m. Ministers may not care – the costs Government lawyers were running up did not come from their pockets. But, even with cost caps, our liabilities were huge and would have to be met, not from the pockets of wealthy pandemic VIPs, but from small donations made every month by supporters like you.
There is much to be done. The Government is threatening to hand your private health data to Palantir, the NHS is in crisis, and we are imprisoning our young for protesting against the climate change that will destroy their futures. We think we should – and we will – spend the money you entrust to us on those things.
We have adapted. And we continue to enjoy considerable success. For so long as you continue to support us, we will work tirelessly for the better world we so desperately need.
Best wishes,
Good Law Project Team
At the risk of being melodramatic, reading this makes it feel like a dark day.
We are pleased to share with you that, after months of negotiations with Ministers, we have settled a number of historical cases about their sleazy pandemic procurement practices.
The terms are that Good Law Project will pay £60,000 (half of Government’s costs) in one of the cases (the Hanbury case). In the other three cases (Bunzl, Immensa and Pharmaceuticals Direct) each side will bear its own costs.
We’d like to explain the deal – and why we’ve agreed to it.
In our first two procurement cases – you can read them here and here – the High Court accepted we had standing. It is obvious, you might think, that there is a public interest in transactions whereby Conservative Ministers channel billions in public money to their donors and associates.
However, those early successes generated Ministerial threats against judges, culminating with this press release. In it, Rishi Sunak threatened to bypass Parliament and change the law to stop Good Law Project challenging his Government – unless judges acted. And since that press release we have not been found to have standing in any case.
What this frightening sequence of events reveals about the fragility – and power bias – of the rule of law in the UK is the subject of Bringing Down Goliath. But, as far as Good Law Project is concerned, the new reality was that, however appalling the Government’s pandemic misconduct, we could not expect to win these cases.
We contemplated continuing the litigation anyway – the transparency alone is important to us.
But Government lawyers, no doubt under huge pressure from Ministers, acquired a further ugly habit – of running up oversized cost bills. A witness statement revealed there were only 168 judicial review cases in the last ten years where costs exceeded £100,000 – out of over 17,000.
But in our cases, their costs were high six figure sums and, on several occasions, exceeded £1m. Ministers may not care – the costs Government lawyers were running up did not come from their pockets. But, even with cost caps, our liabilities were huge and would have to be met, not from the pockets of wealthy pandemic VIPs, but from small donations made every month by supporters like you.
There is much to be done. The Government is threatening to hand your private health data to Palantir, the NHS is in crisis, and we are imprisoning our young for protesting against the climate change that will destroy their futures. We think we should – and we will – spend the money you entrust to us on those things.
We have adapted. And we continue to enjoy considerable success. For so long as you continue to support us, we will work tirelessly for the better world we so desperately need.
Best wishes,
Good Law Project Team
Tony L
Administrator
Terrifying stuff. The Conservative Party, like all corrupt political extremists, will always weaponise the law in their own image. The parallels with red states in America is chilling where a century of civil rights is being systematically erased by far-right/fascist Republican racists and bigots.
The law is increasingly a rich person’s weapon, not a tool for justice. The UK has always had horrific libel legislation and now any prospect of protest or challenge is slowly being removed from us all across the board. A state without legal scrutiny or challenge is a police state. A dictatorship. This is what Trump, DeSantis, Johnson, Sunak, Patel, Braverman etc etc want. Wannabe Putins the lot of them.
The law is increasingly a rich person’s weapon, not a tool for justice. The UK has always had horrific libel legislation and now any prospect of protest or challenge is slowly being removed from us all across the board. A state without legal scrutiny or challenge is a police state. A dictatorship. This is what Trump, DeSantis, Johnson, Sunak, Patel, Braverman etc etc want. Wannabe Putins the lot of them.
wulbert
pfm Member
I got the same statement in an email. Truly chilling stuff. They are systematically removing any opposition to their programme of self-enrichment and empowerment; Trade unions attacked, public protest criminalised, voters disenfranchised, judiciary attacked and undermined, rule of law hobbled, weakest in society blamed and scapegoated. Devolved governments undermined.
Wasn't there once a civil war fought on the basis of "No Taxation Without Representation" ? If you can't vote for progressive policies, can't protest and can't hold your government to account, what kind of country are you living in?
ks.234
Half way to Infinity
Chile. Pinochet is where Tory thinking comes from, increasing authoritarianism is where it’s going
Tony L
Administrator
Looks like GLP are helping put some substance behind Labour’s announcement that money stolen through Tory corruption and grift will be followed-up legally if they get to power:
| We exposed the unlawful VIP lane that helped Ministers’ friends land huge contracts for gloves, masks and hospital gowns. Today, Labour has promised to appoint a Covid Corruption Commissioner if it wins power. We are now pushing forward with our work exposing waste and sleaze by commissioning legal advice on how a future Government could claw back wasted money. It is outrageous that the current Government wasted £10bn on unused and unusable personal protective equipment (PPE) during the pandemic. While millions of people lost their jobs and struggled to make ends meet, Government cronies bought yachts and mansions after being handed lucrative contracts. The Government has already admitted there was “a high risk of fraud in the procurement of PPE”, but we have yet to see a single prosecution. Instead, Rishi Sunak pressured the courts into closing the door on legal challenges. But we won’t stand for this – the law must apply equally to rich and poor. Thanks to the huge support we received from people like you, we’ve appointed two distinguished journalists to comb through the vast amount of unpublished data we hold relating to PPE contracts. They’re starting this week on a year-long project to investigate the Government’s misuse of public money during the pandemic. This is an important strand of our wider work at Good Law Project to hold power to account. Any support you can give will help us continue to make positive change. |
| Thank you, Good Law Project Team |
Tony L
Administrator
Good Law Project are challenging the absurdity of dark-money-funded far-right “think tank” Institute Of Economic Affairs holding charity status. This “think tank” is one if the more destructive forces in UK politics and masquerades behind some illusion of legitimacy only amplified by it holding an entirely bogus charitable status. It is a lobby group for corporate interests and regularly promotes conspiracy theory etc.
Transcript of an email I received (I am a paid subscriber to GLP):
“We’re working with a group of cross-party politicians to challenge the Charity Commission over its repeated failure to investigate radical rightwing charity, the Institute of Economic Affairs (IEA).
Charity rules state research must avoid presenting “biased and selective information in support of a preconceived point of view”. The IEA promotes extreme views such as there is “no sensible scientific objection” to increasing drilling in the North Sea, healthcare in the UK should be insurance-based and that regulation on disposable vapes should be removed.
It’s time for the Charity Commission to hold the IEA accountable.
We’ve teamed up with Layla Moran MP, Alyn Smith MP, Clive Lewis MP and Siân Berry AM and parliamentary candidate – as well as a former member of the commission’s own board, Andrew Purkis – to argue that the IEA falls foul of regulations around political campaigning, research and links with openly political offshoots.
“One charity promoting extremist views and acting outside the rules is a blight on the whole sector,” Moran said.
But the IEA isn’t the only rightwing group fuelled by dark money that masquerades as a charity. We complained to the Charity Commission about another Tufton Street lobby group, the Global Warming Policy Foundation, in 2022. But the regulator is dragging its feet.
It's a scandal that organisations which push an extreme political agenda and seem so plainly in breach of charity regulations should continue to benefit from the credibility and tax advantages charitable status affords.
Help us keep the pressure on the Charity Commission until it steps up to do its job.
Thank you,
Hannah, Good Law Project”
Petition here:
goodlawproject.org
Transcript of an email I received (I am a paid subscriber to GLP):
“We’re working with a group of cross-party politicians to challenge the Charity Commission over its repeated failure to investigate radical rightwing charity, the Institute of Economic Affairs (IEA).
Charity rules state research must avoid presenting “biased and selective information in support of a preconceived point of view”. The IEA promotes extreme views such as there is “no sensible scientific objection” to increasing drilling in the North Sea, healthcare in the UK should be insurance-based and that regulation on disposable vapes should be removed.
It’s time for the Charity Commission to hold the IEA accountable.
We’ve teamed up with Layla Moran MP, Alyn Smith MP, Clive Lewis MP and Siân Berry AM and parliamentary candidate – as well as a former member of the commission’s own board, Andrew Purkis – to argue that the IEA falls foul of regulations around political campaigning, research and links with openly political offshoots.
“One charity promoting extremist views and acting outside the rules is a blight on the whole sector,” Moran said.
But the IEA isn’t the only rightwing group fuelled by dark money that masquerades as a charity. We complained to the Charity Commission about another Tufton Street lobby group, the Global Warming Policy Foundation, in 2022. But the regulator is dragging its feet.
It's a scandal that organisations which push an extreme political agenda and seem so plainly in breach of charity regulations should continue to benefit from the credibility and tax advantages charitable status affords.
Help us keep the pressure on the Charity Commission until it steps up to do its job.
Thank you,
Hannah, Good Law Project”
Petition here:
Stop dark money think tanks breaching charity law - Good Law Project
goodlawproject.org
Tony L
Administrator
Jo Maugham of Good Law Project is facing up to Tory “Lord” Ashcroft:
”If you want to know how power works in the UK contrast the press interest in (1) the £1,500 of capital gains tax Angela Rayner is said to have evaded with (2) the tens of millions Lord Ashcroft denies having evaded.
Lord Ashcroft set up the Bermuda based Punta Gordon trust. A financial statement in the leaked Paradise Papers reported it as holding assets of $450m. But the Paradise papers didn't just reveal the value of the trust.
They also revealed that Appleby, a firm of solicitors that was acting as trustee of the trust, complained vigorously about the fact that Lord Ashcroft dealt with some of the assets in the trust and then invited the trustees to rubber stamp his dealings.
This is a problem because the essence of a trust is that you don't own the assets - they are owned by the *trustees* - and so *you* shouldn't be able to deal with them at all. This is why they attract the tax treatment of trust assets rather than the tax treatment of your assets.
So why were those assets put into the Bermuda - a tax haven - based trust if Lord Ashcroft wanted to deal with them himself? How did he deal with them himself if they were actually owned by the trust? What did he tell HMRC in his tax returns about who owned the assets?
I have seen the Lord Ashcroft Paradise Papers and the arrangements looked to me *consistent with* tax evasion. I am a KC specialising in tax but not offshore personal tax. I shared them with another tax adviser who is a specialist and he reached the same conclusion.
I discussed them neutrally with a third - I no longer hold the papers - and he immediately arrived at the same conclusion. So there is a plausible basis for believing that Lord Ashcroft may have been engaged in tax evasion involving assets worth hundreds of millions.
If our media did its job these papers would be fished out of the @ICIJorg archive by a media org which would invest properly in understanding whether Lord Ashcroft's affairs really do disclose large scale tax evasion. There is a proper basis upon which to ask that question.
As it is, and as is so often true in England the power of the press, including the BBC, is weaponised against working class people, people with no money to hire defamation lawyers, in respect of trivial sums of money and, it seems, if true, technical breaches.
The Ashcroft story involves vast sums and might plausibly reveal a very deliberate attempt to both have the cake of tax 'efficiency' and to eat it to by dealing with the assets as their owner.
The whole thing is hypocritical, ugly, weaponised to keep 'uppity' outsiders in their place, and to protect the rich. It stinks - and it shames all of us who engage in it.
https://twitter.com/JolyonMaugham
And let me stake myself to the mast by saying this: if I get a letter from Ashcroft's lawyers I will publish it.”
”If you want to know how power works in the UK contrast the press interest in (1) the £1,500 of capital gains tax Angela Rayner is said to have evaded with (2) the tens of millions Lord Ashcroft denies having evaded.
Lord Ashcroft set up the Bermuda based Punta Gordon trust. A financial statement in the leaked Paradise Papers reported it as holding assets of $450m. But the Paradise papers didn't just reveal the value of the trust.
They also revealed that Appleby, a firm of solicitors that was acting as trustee of the trust, complained vigorously about the fact that Lord Ashcroft dealt with some of the assets in the trust and then invited the trustees to rubber stamp his dealings.
This is a problem because the essence of a trust is that you don't own the assets - they are owned by the *trustees* - and so *you* shouldn't be able to deal with them at all. This is why they attract the tax treatment of trust assets rather than the tax treatment of your assets.
So why were those assets put into the Bermuda - a tax haven - based trust if Lord Ashcroft wanted to deal with them himself? How did he deal with them himself if they were actually owned by the trust? What did he tell HMRC in his tax returns about who owned the assets?
I have seen the Lord Ashcroft Paradise Papers and the arrangements looked to me *consistent with* tax evasion. I am a KC specialising in tax but not offshore personal tax. I shared them with another tax adviser who is a specialist and he reached the same conclusion.
I discussed them neutrally with a third - I no longer hold the papers - and he immediately arrived at the same conclusion. So there is a plausible basis for believing that Lord Ashcroft may have been engaged in tax evasion involving assets worth hundreds of millions.
If our media did its job these papers would be fished out of the @ICIJorg archive by a media org which would invest properly in understanding whether Lord Ashcroft's affairs really do disclose large scale tax evasion. There is a proper basis upon which to ask that question.
As it is, and as is so often true in England the power of the press, including the BBC, is weaponised against working class people, people with no money to hire defamation lawyers, in respect of trivial sums of money and, it seems, if true, technical breaches.
The Ashcroft story involves vast sums and might plausibly reveal a very deliberate attempt to both have the cake of tax 'efficiency' and to eat it to by dealing with the assets as their owner.
The whole thing is hypocritical, ugly, weaponised to keep 'uppity' outsiders in their place, and to protect the rich. It stinks - and it shames all of us who engage in it.
https://twitter.com/JolyonMaugham
And let me stake myself to the mast by saying this: if I get a letter from Ashcroft's lawyers I will publish it.”