George Osborne embroiled in row after it’s revealed his family firm hasn’t paid tax for seven years

We knew this, didn’t we?

It certainly seems the person who created this cartoon about Google’s tax affairs did:

160129OsborneGoogleTaxNegotiation

It’s certainly worth making a fuss, but This Writer, at least, is surprised it is being treated as a shock.

Chancellor George Osborne has become embroiled in a cash row after receiving a share of £335,000 from his family firm – even though it hasn’t paid tax for seven years.

The wallpaper firm Osborne and Little Group Ltd has not paid any corporation tax since 2008 – according to an investigation by The Sunday Times.

Now the Chancellor, whose brother Adam was struck off the medical register this week for having an affair with a patient, is facing serious questions over the matter.

Mr Osbourne holds 6,833 shares in the family firm which makes hand printed wallpaper and was paid £1230 from the annual dividend while his parents were entitled to £270,000.

The company which employs 195 people at its London head quarters brought in £34m in revenues in 2015 – but made just £722,000 profit which was shared between directors.

Source: George Osborne embroiled in row after it’s revealed his family firm hasn’t paid tax for seven years – Mirror Online

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20 thoughts on “George Osborne embroiled in row after it’s revealed his family firm hasn’t paid tax for seven years

  1. hayfords

    Privately owned companies rarely pay corporation tax. The only to time you need to pay it, is if you want to retain profit in the company for say capital purchases. Privately owned companies draw the profits out by salaries and dividends, both of which attract tax. It means that tax is still paid on the profit, but it is not corporation tax. Corporation tax is almost exclusively paid by PLCs. Interestingly Margaret Hodges’s family business doesn’t pay corporation tax either.

    1. Mike Sivier Post author

      You have ended with a false argument. Two wrongs don’t make a right and never can.
      While I have no particular expertise in this area, I would point out that the issue here would not arise unless Osborne & Little would normally be expected to pay Corporation Tax. While you may be right in general, in this specific case you are probably mistaken.

      1. hayfords

        The specific reason that Osborne’s company paid no corporation tax is due to carried forward losses from previous years. The losses are offset against profits and reduce corporation tax liability. If the carried forward losses are big enough then there will be no tax liability for years. The losses are often the result of major investment in plant and machinery. It is how all companies operate. I had a series of companies for more than 40 years and never paid corporation tax once. I paid income and dividend tax. It is the same with Margaret Hodge, who is doing nothing wrong any more than Osborne is. If a private company is paying corporation tax then there is something wrong with the way they are running their business.

      2. Mike Sivier Post author

        … in your opinion, which appears to be mistaken. Look at that profit of £722,000, which is (or should be) taxable.

    2. stephen brophy

      Those tax rules were meant for new/small start ups! But like all rules they are abused by those with money and power! They all should be named and shamed! Forget about which party they are from, this is about 200 billion tax being avoided by bending rules and using double talk to mislead hard working tax payers.

    3. Brian

      That apart, 2% profit is not a feasible business, I would question, and want sight, of the capital expenditure employed that reduces profit to this level.

  2. Jonathan Wilson

    The Mirror is a little late to the party, various memes have been circulating for at least a year on this… one I recall also mentioned that in one year it even had a tax credit, so the hard working tax payers actually paid his company money.

    1. Florence

      Yes, the tax credit year(s) show that profit is private, but losses are public. Obviously this is one area of tax that Gidiot does understand. It’s a shame it doesn’t extend to, say, the economy.

  3. Brian

    Hand printed wall paper , mmm. Pugin no doubt, interested to see the competitive tendering docs and sign off for government supply!

  4. John

    I’ll be absolutely flabbergasted if Gideon does become PM, considering the complete incompetence and embarrassments he has suffered as Chancellor !

  5. hayfords

    The company has made a profit recently, but there are losses in previous years which generate tax credits. These do not get paid.,but are held against profits.

    The Mirror article that you link to says

    “the firm had not paid tax to date due to substantial losses in previous years.”

    It is how every company in the UK and the world operates. Any other way and huge numbers would go bust. They could not invest in plant and machinery without tax allowances.

    They still pay just as much tax but it is done via page and dividend tax. No tax has been avoided.

    1. Mike Sivier Post author

      The article also points out that the £722,000 profit was shared between the directors of Osborne & Little – not used to pay off any debts.
      You have been warned about selective quoting before, you know!
      Incidentally, how can you have any idea how much tax Osborne & Little pays? Show us your proof – or are you making assumptions you cannot justify, again?

      1. hayfords

        Making a loss does not imply debts. It usually implies that there had been a trading loss due to capital purchases or lack of sales. These sums would have been funded by credit either from the directors as loans or by running an overdraft or even a bank loan. A loss produces a tax credit as a profit would generate payable tax. The article saying that the directors shared the profits is clearly wrong as it is not possible to take money out of a company without paying tax on it. Anyone can view their accounts. They are available on the Companies House web site for £1. There is even a beta version that operates for free.

      2. Mike Sivier Post author

        That’s all very well, but I asked you to bring us proof. Why should we spend our money when you’re making the claims?
        Bring it here.

  6. hayfords

    I looked at their accounts and there is no way that the directors shared out the profits. The tax due on £722k is around £152k. There are carried forward tax losses greater than that so there is no tax to pay. They employ 200 people selling textiles mainly to the US. Their salary bill is approx £9m including directors on which tax is paid. G Osborne is not a director, but is a shareholder. The accounts look like any other company. The Mirror is trying to generate a story where one exists as usual.

    1. Mike Sivier Post author

      I asked for proof and you give me claims.
      You need to show us this evidence. Present it in a way I can forward to the Mirror, to get the paper’s side of it.
      Bring it, or back off.

Comments are closed.