MAY: WE’LL GET TOUGH WITH TAX DODGERS
THERESA May has ordered a blitz on corporate tax avoidance, including the use of offshore companies, in an attempt to prevent a repeat of the Sir Philip Green BHS scandal.
Officials in the new No10 policy unit have been instructed to make the crackdown on ‘anything goes’ behaviour their top priority.
Mrs May has told aides that – as part of a drive to ‘reform capitalism’ – she wants to ‘learn the lessons’ of the behaviour of Sir Philip and others involved in the collapse of BHS.
Yesterday, Sir Philip and his family were accused by MPs of plundering BHS using a complex web of offshore companies, set up in tax havens such as Jersey and the British Virgin Islands under the name of his wife Tina Green.
MPs said the arrangements ‘were designed to reduce tax bills’, while ‘also having the effect of reducing corporate transparency’.
At the same time, there was a lack of investment in BHS’s stores and a huge black hole – now estimated at around £700million – opened up in the company’s pension fund.
Yesterday there were new demands for Sir Philip – known as Sir Shifty – to be stripped of his knighthood. Lord Kerslake – a former chairman of the Honours Forfeiture Committee said there was a ‘case to answer’. The comments by
‘Wealth beyond the dreams of avarice’
the ex-civil servant are seen as hugely significant. He was in charge of the committee when the shamed RBS banker Fred Goodwin was stripped of his knighthood for his role in the financial crash.
Lord Kerslake said: ‘I wouldn’t prejudge the outcome…but I think there is enough on the record now about what has happened in the case of BHS to justify the issue being examined.’
Labour MP Frank Field, chairman of the inquiry by MPs, said Sir Philip would have to pay £700million into the black hole in the BHS pension fund to stand any chance of keeping his gong.
He said: ‘His only chance is to pay generously – his reputation has bit the dust with BHS in any case.’ He said Sir Philip was ‘much worse’ than disgraced tycoon Robert Maxwell, even though he has committed no crime.
Maxwell – who left a £440million hole in the Mirror pension fund that was discovered after he died.
Mr Field told the BBC that Sir Philip has ‘wealth beyond the dreams of avarice’ and is in position to pay back the money ‘unlike Maxwell who was bankrupt when he threw himself off his boat’.
Though the official figure for the pension deficit is £570million, experts fear it may have grown to £700million. The Prime Minister’s official spokesman said Mrs May was determined to ‘tackle corporate irresponsibility and reform capitalism’.
Senior Government sources said the No10 policy unit, headed by John Godfrey, would have the job of cracking down hard on corporate and personal tax avoidance – both of which Sir Philip and his family stand accused of. The plan could be unveiled in time for Tory Party conference in October.
Hundreds of millions of pounds from dividends and from the sale of property in Sir Philip’s vast retail empire were channelled through secretive offshore companies. Between 2002 and 2004, BHS paid £423million in dividends – almost double the profits made by the retailer during that period.
Of this, £307million was paid to the Green family in Monaco via their Jersey-based investment vehicle Taveta. This is the parent company of the Arcadia Group which owns Topshop, Dorothy Perkins and used to own BHS.
In 2005, Taveta paid a record dividend of £1.3billion to the Greens – described as the ‘biggest pay cheque in British corporate history’. During this period, Sir Philip is accused of failing to invest enough in BHS and its pension scheme.
Owen Smith, who is challenging Jeremy Corbyn to be Labour leader, demanded his knighthood be removed.