It is a bad day for Cameron and his party’s finances come under scrutiny revealing some shady dealings.
Cameron’s advisor Charles Hendry, MP and former energy minister has been criticised for his links to a pro-Russian business group after Cameron imposed sanctions on Russia over the flight MH17 incident.
Hendry, who is not paid for his government role, took a £2,200 trip with his wife to Moscow, staying in the Ritz-Carlton Hotel, at the expense of the chamber of commerce to speak at a conference in 2012. He is also paid £60,000 a year to work one and a half days a month as a consultant to Vitol, an oil trader that has loaned billions to Russian state oil company Rosneft.
The controversy over Hendry comes on top of intense scrutiny over links between the Tory party and wealthy Russian donors. Boris Johnson, London’s mayor, has said he could back out of a tennis match auctioned at a Conservative fundraiser for £160,000 to the wife of a former minister in Vladimir Putin’s government.
Cash donors to Tory central office include a firm led by a Russian banker who has facilitated investments by the Kremlin’s $10bn (£5.86bn) Russian Direct Investment Fund and Russian oil group Lukoil. Natalia Tsukanova has advised several Russian companies with state-ownership and her Moscow-based company, Xenon Capital Partners, gave £10,000 to the Conservative party in 2010.
The party also received £60,000 between 2010 and 2013 from Waterford Finance, whose directors include Alexei Kroujkov, until last year finance director of SoyuzNeftGaz, the company led by Shafranik. Kroujkov was also formerly a director of Oxoil, a subsidiary of the state owned oil group Rosneft.
A London based public relations firm which has represented several allies of Putin also gave the Conservatives £91,000 in 2009 and 2010 and has spent several thousand pounds on tables at Conservative fundraising events since then. New Century Media, headed by the former Northern Ireland unionist MP David Burnside, has made introductions with David Cameron for Vasily Shestakov, Putin’s judo partner and an MP in the Russian Duma who had been given the job of improving Russia’s reputation in the UK.
Cameron has also been forced to re-examine arms exports to Russia after the Commons committee on export control identified £130m of sales despite the sanctions. The government argues none of these have gone to military sources, citing the example of parts that went to a Brazilian ship that happened to be docked in Russia.
On Wednesday Labour MP John Healey wrote to Cameron demanding he rethink whether the party should keep Russian funding. He wrote: “When leader of the opposition in 2008 you went as far as to say, ‘Russian armies can’t march into other countries while Russian shoppers carry on marching into Selfridges’, and yet …while the Russian army marches in to Ukraine you seem content to base your re-election campaign on Russian funds. Since you set this moral standard while leader of the opposition, I believe it is now vital that you make a public judgment and justification of whether you and your party will keep the money you have received.”
John Mann, a Labour MP, said Hendry should step down as an envoy and have the whip withdrawn.
“This organisation is encouraging trade with Russia,” he said. “This is the opposite of the sanctions that we require, that the government says we are pursuing. How can he possibly retain this role when he is an advocate for even more trade with Russia. His position is totally untenable. David Cameron should act to remove him.”
Source: The Guardian
The Independent exposes how one of Cameron’s biggest donors avoids paying tax on billions of pound of profit – with the ‘blessing’ of HMRC (Her Majesty’s Revenue and Customs).
One of Britain’s’ richest men, Ian Taylor, chief executive of Vitoil (also notice the Vitoil connection with Hendy above) has donated £500,000 to the Better Together campaign on Scottish independence and has given the Conservative party £550,000 since 2006.
The Independent was contacted by an insider who wanted to expose how Vitol arranges its business to pay a fraction of the standard UK tax rate for its hugely profitable London operations. As a result, over recent weeks, this newspaper has gathered documentation from internal and external sources and arranged for covertly recorded conversations with UK-based executives.
Together, they paint a picture of an organisation where staff in London are presented as “intermediaries” when they are actually the brains that make hundreds of millions of dollars a year in profits. This means the profits on their trades are shifted to low-tax Switzerland.
The company says its tax structure has been approved by HMRC.
Internal documents from the company’s London headquarters show in the past nine years it has paid an average of just 10.5 per cent tax on its global profits, which totalled nearly $15bn (£8.8bn) over the period. Last year it paid 2.6 per cent global tax on profits of
$846m, the document from the parent company shows. The company did not comment when asked about these figures.
“It is simply unbelievable that they can get away with it. Nobody in the industry can work it out,” said one commodities executive familiar with the company.
Vitol’s London executives are renowned in the industry for their enormous wealth, and use of private helicopters and personal jets. The company, insiders say, claims that its multimillionaire London staff are merely “brokers”, acting as middlemen arranging trades on behalf of its staff who confirm the deals in Switzerland. That makes it appear that the most profitable actions – the trading deals themselves – are made in low-tax Switzerland, so the profits they create are taxable there.
However, the so-called “brokers” in London privately admit that they are actually traders, making decisions on buying, selling and transporting oil around the world, using their high-level contacts and skills. Their trades are “confirmed” in Switzerland, but this is only, Vitol insiders said, to comply with its UK tax scheme.
As a London Vitol trader explained in one of the conversations recorded: “Officially we are ‘brokers’, but obviously we are traders. We make the decisions and then Geneva issues the confirmations.” Another, described externally as a broker, says on tape: “I am a trader,” before specifying what kind of trading he specialises in.
One confirmed that Vitol’s peculiar UK structure was entirely due to the company’s tax agreement with HMRC. The Independent is not revealing traders’ identities in order to protect sources.
A spokesman for HMRC said: “HMRC does not discuss the tax affairs of individual businesses or companies. HMRC’s role is to ensure that the tax rules are complied with in line with UK law. We investigate all of the relevant facts when determining how much of a multinational enterprise’s profits should be taxed in the UK.”
The General Anti-Abuse Rules from HM Treasury which came into effect last year state that corporate structures must not be arranged specifically for tax reasons. HMRC’s rules on foreign companies trading in the UK on its website state: “A company not resident in the UK is within the charge to corporation tax only if it carries on a trade in the UK through a permanent establishment in the UK.” The guidance adds that the definition of “trading” has been the subject of many disputes in the tax courts but is widely held to mean the place in which the “controlling mind” behind the deal is based.
Vitol is Dutch-owned but has headquarters in Geneva. However, many of its key decision-makers remain in London, living in expensive homes, working at the top floor of an office block in London’s Victoria area.
While not all Vitol’s global profits – $845.9m last year – are made in London, sources said a substantial portion comes from its traders based there and would ordinarily be taxed at the general corporate tax rate – currently more than 21 per cent.
However, Vitol’s London companies listed at Companies House record making only relatively small profits. For example, Vitol Broking Limited says in its accounts for 2012 that it made a profit of just £2.8m. On that, it actually paid slightly more than the normal UK corporate tax rate, while its 49 staff are shown earning an average of just under £900,000 each. Its parent company in the UK, Vitol Services Limited, similarly paid full UK corporate taxes on its £9m profit.
Another division, Vitol London, admits in its Companies House accounts that its business is “trading in oil products” but it says it has not carried out any activity in 2011 or 2012 – the years covered by the accounts.
Several online CVs of the London executives at Vitol describe how they have had long careers as “traders” prior to joining the company, but apparently demote themselves to being mere “brokers” while at Vitol in London. Some even turn back into “traders” when they leave Vitol for other companies. In his online CV, Lee Goldsmith says he was an “oil trader” at Galaxy Energy before becoming an “LPG broker” at Vitol.
However, when contacted by The Independent, he said his LinkedIn profile must be wrong, and that he had always been a mere broker, adding: “I have never been a trader. I am an intermediary on behalf of Vitol Geneva.”
Others who describe their previous jobs as “traders” omit their job title altogether when they arrive at Vitol in London.
Vitol is Dutch-owned but Geneva-based and London is counted as a subsidiary office, like Singapore. The local offices are renowned for being run as independent units where decisions are made, sources said.
Internal accounts that were handed to The Independent for the Dutch holding company Vitol Holding BV also give an intriguing insight into the lavish hospitality for which the oil-trading industry is famed, saying the group’s employees spent $46.7m on “travel/entertainment/representative exp [sic]”.
Vitol did not comment on the specific tax structure in London when asked about what the traders said.
A Vitol spokesperson said: “Vitol is a global company with 38 offices worldwide. It has an open and transparent relationship with the tax authorities in all the jurisdictions in which it operates. These authorities are fully aware of how the business operates. Vitol pays the correct level of tax in accordance with the appropriate legislation in each of these jurisdictions.”
In 2012, Vitol reportedly had to pay HM Revenue & Customs to settle a claim for millions of pounds in taxes its senior staff allegedly avoided through an offshore pay scheme known as an employee benefit trust. This is said to have allowed employees to avoid paying income tax and companies to avoid national insurance contributions. Vitol denied the claim, saying its pay structures were “fully compliant with local tax regulations”.
Challenged about Mr Taylor’s donations to the Scottish “No” campaign and the Conservative Party, Vitol said: “Vitol makes no political donations. Any donations made by employees are on a personal basis.”
Source: The Independent
We wouldn’t be surprised if these shady dealings by Cameron and mates are just the tip of the iceberg – hardly surprising considering what a shady character Cameron is.
As millions are plunged into trying to survive a highly stressful period in British history, Cameron is making sure that the people who may, or will be, of use to him in the future are well looked after.
We wonder how far these shady activities go and what effect they have on the policy decisions of the current Conservative dominated government. It may be that many of the policies and decisions that the public are not privy to strongly favour those who are able to contribute to the Conservative party coffers.
These two stories from The Guardian and The Independent are not the only times the Conservatives shady dealings have been exposed or come into questions.
Cameron’s determination to increase the foreign aid budget to ridiculous proportions at a time of supposed ‘austerity’ only serves to put more money in the coffers of a select few British companies acting as ‘consultants’.
The virtual destruction of the welfare system has had a similar effect, with tasks once completed by the public sector now in the hands of another selection of ‘preferred partners’, who have gained extremely lucrative contracts at the public expense.
The NHS is going the same way. As services become almost impossible to provide, we are beginning to see a rise in the number of private companies providing the same services in lucrative contracts.
Education is another where the Conservatives are gradually getting the public used to the idea that private companies could be educating our children in the near future.
Even the police have not be safe from the Conservatives money making schemes. Private companies are gradually gaining hold on aspects of our justice system – usually the same companies who are ‘preferred partners’ in other public services.
Before long everything we have considered to be a service that should be provided by government, independent from the commercial profit and loss brigade, will be monetised in some form or another.
We will then all become part of the profit and loss system, with those who are able to pay getting the services they need, and the poor and vulnerable left to fend for themselves with only poor quality and the absolute minimum of services provided to them.
It is not a very bright future for the majority of the population if the Conservatives and their cronies carry on the way they are going.
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