What is Tim Farron up to?
Readers of this blog will be already familiar with Mike Basman's bankruptcy and his subsequent activities, but as Tim Farron MP patently is not - and hasn't apparently made any effort to check - let's just reiterate for the benefit of the prevously underinformed:
- HMRC aren't "seeking" to do anything, since VAT on chess entry fees is nothing new
- There has been no "tax hike"
- There has been no "recent change to its tax status".
- Mike Basman has been made bankrupt as a result of evading his legal obligations at a net loss to public funds of several hundred thousand pounds.
To: tim@timfarron.co.uk, tim.farron@libdems.org.uk
9 October 2016
Dear Mr Farron
I'm a chess writer and I have seen the statement you have issued concerning the UK Chess Challenge.
In it you refer to
"A recent tax hike"
and
"A recent change to its tax status".
As far as I am aware there has been no "recent tax hike" and no "recent change to its tax status" where the UK Chess Challenge is concerned.
In reality its organiser has been made bankrupt not because of a non-existent "recent change", but because of a failure to collect and pass on VAT over at least a ten-year period, hence depriving the Exchequer of at least £300,000.
I wonder if you would care to check your information and withdraw what is, in practice, an endorsement of the claims of a tax evader.
All the best
Justin Horton
I'd rather suspect that if you recalculated the last ten years, paying the VAT against actual turnover, but offsetting the reclaimable VAT, the annual loss would be nowhere near £ 30,000. That would particularly apply if you offset the tax and National Insurance that had been paid on profits and earnings that wouldn't exist after the VAT take.
ReplyDeleteThat was part of the problem. It would appear HMRC asked UKCC for financial data. When none was supplied, they invented their own to come up with £ 300,000.
There could have been circumstances where a change of interpretation could leave organisations thought to be VAT exempt with a VAT bill. Had the UKCC been structured so that each local area collected or appeared to collect the entry fees from schools and qualifying participants, each local organisation would be below the VAT threshold. Such an arrangement would be open to challenge if it proved window dressing.
Let's not forget that whilst the ECF pays VAT, local organisations don't. That's why the ECF should stay in the background as far as adult chess is concerned.
RdC
I'd rather suspect that if you recalculated the last ten years, paying the VAT against actual turnover, but offsetting the reclaimable VAT, the annual loss would be nowhere near £30,000.
ReplyDeleteYou might very well be right, although one might suspect that the losses have actually taken place over more than just ten years.
It would appear HMRC asked UKCC for financial data. When none was supplied
Presumably this was Basman's chance to question HMRC's estimate, which for some reason he failed to do?