Board/Fan Relationship

IronHerb

Well yes, as he should.

grey_til_I_dye

Herb

Indeed.

My point was that he can probably still be regarded as a British tax payer.

Cuz1

Although another that try’s to cheat the system

grey_til_I_dye

Cuz

That hardly makes him unique.

The opposite, in fact, I'd say.

Doesn't pretty much everyone try to game the system where they can?

sweepy23

No

grey_til_I_dye

Oh well, must just be me, then.

Well, me and Diddy D, obvs.

Oh, and Ken Dodd.

thornburyiron

Swept I don't believe you. Do you pay into a pension scheme? I would imagine that everyone uses whatever tax avoidance measures are at their disposal.

MrsGrey

imo Anybody who has never said to the Revenue, 'Oh look I can afford an extra fiver. Go on, you have it,' can't legitimately criticise anybody else for also making sure they pay what they are liable for and not a penny more.

grey_til_I_dye

I couldn't read the article, (not paying for The Times, tvm) but I assume he acted on advice from a tax accountant, on the assumption that it was a legitimate action.

So, all he is guilty of is employing someone who didn't know the rules as well as they thought they did.

IronHerb

thornburyiron said:

Swept I don't believe you. Do you pay into a pension scheme? I would imagine that everyone uses whatever tax avoidance measures are at their disposal.

Tax avoidance isn't against the law, and paying into a pension scheme certainly isn't.

thornburyiron

Exactly my point. Paying into a pension scheme is one way of many to reduce your tax. I inferred from Sweepy's "No" that he wouldn't do anything to reduce his tax liability.

MrsGrey

From what I read (not the Times, but reported elsewhere, so trusting that they got it right) the losses that were incurred by one company (owned by DS) when it sold West Ham shares to West Ham at below market rate were recorded as losses, which meant the company's tax bill was lower than it would otherwise have been if the profits had been higher.

So far so ordinary - happens all the time. Perfectly legal.

The problem for DS is that he is owner (or part owner) of both companies. And so while it is clear that the orginal company did indeed make a loss on selling the shares to West Ham, because of the ownership, you can't (it seems, as the Court has just ruled) offset the losses.

The fact that all these dealings were recorded openly in the company accounts, and picked up on by HMRC, indicates to me that they weren't trying to hide anything.

Accountants are paid to know the rules and apply them when doing the books. Auditors too. I wonder who the auditors are were for the original company?

MrsGrey

http://www.bbc.co.uk/sport/football/43543273 I've just seen the BBC report.

My mistake earlier - it was a tax tribunal, not the Court.

Quote: Tribunal judge Jane Bailey acknowledged the "overarching" reason for the transactions was to provide funds for the club.

She went on to say that there was more than one way of doing that, and DS chose the way that would also (as he thought) enable him to minimise his tax liability.

Apparently, according to the Beeb, DS is going to appeal.

For anyone interested in the details, the BBC link contains a link to the tribunal ruling. It is 31 pages long.

MrsGrey

Half way through ;phew

PrestonHammer

Don't they do a 1 page highlights reel?

Slaven_Cups_His_Beard

sweepy23

So to elaborate:

I do not see the similarity between paying into your pension, which is advised and welcomed by the government, to what DS is doing by trying to avoid paying taxes through complicated arrangements.

When I sold my business my tax advisor told me to think about moving abroad for 5 years to avoid paying tax on the sale. Personally I felt that was wrong. I set up my business in the UK, I live in the UK and I care about the UK.

Some things are morally wrong. IMO.

Cuz1

Something else to bring our club to the attention of others in an unwanted way

Pearces_Left_Foot

I see west brom financial officer who returned after a year has said the clubs finance are in a bit of a mess and they will need to use overdraft for first time in a decade

IronHerb

PLF

That's a bit like when managers take over a club and say the players aren't fit.

#notmyfaultguvnor

MrsGrey

Although in the case of WBAs wage bill and other finances, it will all be in the public domain eventually. So it will be obvious if he's telling the truth or not.

Plus, their Board will know already what the finances are like and will know if the FO is just trying to pass the buck.

So I don't think it's really comparable in the way that you say it is, Herb.

ASLEFshrugged

WBA's owner sacked the chairman and chief executive officer in February, the three board members that survived "the Purge" will probably agree with the new CEO just to keep the owner happy

Slaven_Cups_His_Beard

I think it’s the fact he’s involved the club that’s got me ;angry

MrsGrey

But that was the whole point! It was (originally) conceived of as a way to put money into the club but keep it out of the hands of the Icelandics. (Even the tribunal judgement recognises that.)

He was trying to find a way to inject money into West Ham when they first bought into the club. They had 50% of it (the other 50% owned by the Icelandics). There were a variety of ways, but some of them meant that not all the benefit would accrue to the club - some of it would have gone into the Icelandics coffers rather than the club's.

He asked his lawyers to come up with a way to get the funds (at that stage £8m) into the club only.

They (and the WHU finance director) advised on doing a share purchase and resale in the way they subsequently did. The possible tax benefit was an afterthought (and in the tribunal papers it is clear that it WAS only considered a possible benefit, and it WAS an afterthought at that point. The tribunal judge states that, as a fact, with extracts from historic correspondence as evidence, somewhere around pg 16 of the judgement).

MrsGrey

What I find bizzare is that this whole tribunal is being asked to rule on MOTIVE.

It appears (although I haven't read to the very end) that the judge accepts that at first DS wasn't looking to reduce his company' tax bill by this deal, but was only trying to benefit WHU.

However, later on the potential tax advantage took on greater significance (once he had been informed that the deal could have such a knock-on effect).

And because of that, in the judge's opinion, he is guilty of intending to avoid tax.

The REALLY BIZZARE THING (as I understand it) is if she had ruled it wasn't an important motivation, he'd have been found not guilty and wouldn't have had to repay the relevant sums.

So the tribunal isn't really concerned with WHAT you do but WHY you do it.

;hmm

Barney

Thanks Mrs Grey; your summary is very helpful. Seems that DS had the best intentions for the club but then also saw another benefit later in the process. Unfortunately it is the alleged tax avoidance which is getting the headlines and not what he did to help the club.

ASLEFshrugged

The Icelandics (Magnusson, Gudmundsson, Landsbanki, etc.) didn't own the club after June 2009, ownership had passed to CB Holdings, a company set up by Straumur and the other banks who took over the Icelandics's assets when they went bust.

Sullivan and Gold bought shares from CB Holdings so nothing would have gone to "the Icelandics".

Slaven_Cups_His_Beard

Well I think that Mrs G may mean “Icelandic’s” in general terms, whether it be the old regime that owned us or who controlled us because of the collapse.

Either way I don’t agree with what DS has done here and i don’t care what his intentions were, of course he wanted the money to go into the “club” because it’s effectively his (in the main), why does everything with this bloke have to be a saga, why can’t it be straight forward? It’s no wonder a vast number of fans have turned on him, also why wouldn’t he be upfront and mention what he was trying to do at any point in the last 7 years, rather than wait until it was dragged out and made public at quite possibly his worst period at the club? Yep hindsight....but boy do these two make some serious PR gaffs, some 100% of their own doing and some they could’ve prevented or even made a little bit better than what they are.

Frankly I don’t trust them as far as I could throw the pair of them, even though I probably could launch Sullivan.....

They either need to sort this club out top to bottom with a plan and stick to it or try and sell and get out

Poor Mark Noble probably believed those words on the pitch after the MUFC game, truly come back to haunt him as well

Rant over and all imo

MrsGrey

ASLEFshrugged said:

Sullivan and Gold bought shares from CB Holdings so nothing would have gone to "the Icelandics".

Sorry, yes, meant the other 50% owners ;ok

MrsGrey

Barney said:

Thanks Mrs Grey; your summary is very helpful.

You're welcome. ;ok

It's open to correction though, as some of that document is quite complicated and I may easily have missed something.

I urge you all to read it for yourselves in order to form your own informed opinions. ;biggrin