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Press watch: Gibraltar; Hearts FC; Charity Commission

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Gibraltar’s campaign to ‘lure London hedge funds’: ‘Gibraltar is launching a campaign to persuade hedge funds to ditch their plush Mayfair offices for the low taxes of “the Rock”. Fabian Picardo, chief minister of the British overseas territory, said multi-millionaire hedge fund managers should quit London for Gibraltar because it's “much cheaper”, while promotional material promises they are “unlikely to be liable for corporation tax”.

‘Picardo denied Gibraltar was a tax haven and said the territory complied with all EU tax and transparency regulations. He said he was delighted the UK was “finally going to crack down on tax evasion”, which he said was good for Gibraltar which already has “the toughest regulation” ... Corporation tax on activities undertaken on the rock is levied at 10%, compared with 24% in the UK. Gibraltar also boasts no VAT and social security payments of just £120 per family a month.’

The Guardian, 2 June 2013

Hearts FC ‘could face winding-up order’: ‘There are fresh fears over the future of [Scottish football club] Hearts after it was revealed that the club faces just seven days to pay a £100,000 tax bill. The Tynecastle club are due the six-figure sum to HMRC in unpaid PAYE and have a week to stump up the cash or face the prospect of being served a winding-up order ...

‘The bill is separate to the agreement made at the end of last year with HMRC to repay £1.5m following a dispute over loan deals for players from FBK Kaunas. The club are paying that debt back in monthly instalments over a three-year period and the first payment, which was due last month, is believed to have been paid on time.’

The Scotsman, 4 June 2013

Charity Commission failing over tax abuse: ‘The Charity Commission’s failure to block abuse of charitable status in a tax avoidance scheme has been branded “unacceptable” by MPs, who said the incident was disastrous for the reputation of the Commission and the charity sector.

‘The [Public Accounts Committee] said the Cup Trust, set up as part of a tax avoidance scheme in 2009, should never have been registered as a charity. The trust generated “income” of £176m but only £55,000 was given to charitable causes. Claims for £46m of gift aid were made, although none was paid by HM Revenue & Customs because it did not accept that the scheme worked. After investigating the Cup Trust between 2010 and 2012, the Commission concluded that it could not be deregistered because it was not “legally structured as a charity”.

‘MPs said they were encouraged to hear that HMRC had not paid tax relief or gift aid on the basis of such a scheme but feared that the case was the tip of an iceberg.’

The Financial Times, 3 June 2013

Issue: 1172
Categories: News