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By Nigel Somerville, the Deputy Sheriff of AIM | Wednesday 8 November 2017
Plastered all over the telly for the past couple of days have been revelations from the Paradise Papers, the stack of documents reviewed by the International Consortium of Investigative Journalists as a major follow-on to the Panama Papers.
One of the elements of focus by BBC Panorama has been how certain people (including actors) have been shovelling money into offshore companies and then being appointed advisers to guide those companies as to how to spend the cash. It’s a bit of a circular thing, but essentially it meant that the money could be collected offshore – tax free – and then paid out again – also tax free.
Obviously it seems to be good to be true, but it seems (thus far) to work. The only problem is, of course, that I daresay it is quite expensive to set up and run as it seems to need the expert opinion of international tax advisers and lots of legal work. But is it all pointless and unnecessary? Step forward Roland “fatty” Cornish with a much simpler solution.
Last year Tom Winnifrith looked at the accounts of Roland “fatty” Cornish’s Nomad firm Beaumont Cornish Limited and found that he appeared to be taking loans from the company which Tom wondered should be taxed as income, for the cash never seems to be repaid.
In the company’s FY15 accounts that added up to £597,063 over the years paid out as loans which had not been repaid. In the FY16 accounts his loan package had ballooned to £654,095 at year end (although it had peaked during the year at £718,963). In other words Fatty’s personal bank account had been swollen by £57,032 in what appears to be a semi-permanent loan (which one assumes attracts neither tax or NI).
Luckily, the loan is classed as current so I assume it covers regulatory capital if needed, and could be made available at the drop of a hat if needed. He also managed to pay out a dividend to himself of £180,000 (down from £270,000 last time).
That’s a nice little earner, isn’t it! Who needs international and secretive tax advice using obscure tax havens when the solution is sitting within UK tax legislation?
At least, I assume it is….
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