Friday, 1 May 2015

The BBC finally cover the Margaret Hodge story, sympathetically of course

On Wednesday I predicted how the BBC would report the Margaret Hodge story when they could no longer ignore it. Well the BBC have finally deigned to cover the Margaret Hodge story with a sympathetic interview on 5Live.  

'Speaking to Peter Allen on Radio 5 Live, Margaret Hodge has defended her own tax affairs after accusations that she has benefited from shares which were held in the tax haven of Liechtenstein, although she has been a vehement critic of tax avoidance and evasion.

Ms Hodge said that she never controlled the trust which held the shares and paid tax once the shares came onshore. She insisted she had not benefited during the time the shares were offshore.
She said "I have always paid tax to the full."

Her family came from Germany and Austria and after World War II, her family was dispersed across Europe.

The trust was set up by an aunt in France and an uncle in America. She said her relatives shouldn't have set up the scheme but repeated she never benefited when the shares were offshore.

Asked if she felt she could serve again as chairman of the Public Accounts Committee, Ms Hodge said she was hoping Labour will win the election so "it won't be up for grabs because it will be held by a member of the Opposition".

"But I don't believe that I have acted in any way inappropriately," she said.'

 So let's look at my predictions:

The Times has several pieces that are of special interest, first:
'... just under 96,000 Stemcor shares handed to Ms Hodge in 2011 came from [Liechtenstein], which is renowned for low tax rates. Three quarters of the shares in the family’s Liechtenstein trust had previously been held in Panama, which Ms Hodge described last month as “one of the most secretive jurisdictions” with “the least protection anywhere in the world against money laundering”. The veteran Labour MP was accused of sheer hypocrisy. She has repeatedly attacked big businesses and bankers who used offshore arrangements, but has not declared that she benefited from an offshore trust.'
But the extract that may be of most relevance is this:
'Ms Hodge's Stemcor shares were transferred onshore using the Liechtenstein Declaration Facility LDF)... The LDF was established in 2009 to encourage people with undeclared income or unpaid taxes to repatriate their assets from Liechtenstein by offering favourable terms. Tax liabilities under the scheme need be declared back to 1999, rather than the standard 20-year period. Users must pay the back taxes due, plus interest for the period, but the penalty is set at 10 percent of the sum owed, rather than 100 percent, and there is no threat of criminal prosecution.'
When the BBC deign to cover this story, they will be probably be quoting Margaret Hodge or one of her BBC supporters, stating that all taxes due were in fact paid. I doubt that someone will raise the question of the LDF's 1999 limit and ask how much tax might have been due if the more usual 20-year period had been applied. Likewise how much penalty was saved by being applied at 10% rather than the normal 100%.

So indeed the BBC did report:
'She said "I have always paid tax to the full."'
I'll not hold my breath waiting for any BBC 'journalist' to ask any of the more penetrating questions that I laid out on Wednesday and repeat above.

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