Ashcroft has tried to rationalise his tax avoidance by stating that everything he has done is legal and each of the Panorama documentaries concerning his affairs have been widely discredited. Which is utter nonsense. Others have argued that he is not responsible as it is the treasury who writes the laws, and he is not to blame for their inability to regulate the financial affairs of the elite. However, it is also true that he has bankrolled the party for years, and therefore lawmakers are biased towards not making any decisions which would impinge on his wealth, and thereby cut off future election funding for the Tories.
He can claim innocence all he likes, but an innocent man does not walk away and ignore the questions of a reporter at a very public event while nervously muttering ‘dear, dear, dear’.
Now, for the crux of this article. Like many crony capitalists, Ashcroft believes he, the entrepreneur, is king and we, the consumer, must make concessions to keep him happy. However, this is not at all how capitalism works. For instance, Ashcroft is majority shareholder in Gusbourne PLC, which is the parent company of Gusbourne Wines. The company is massively profitable, boasting a selection of award winning wines such as Brut Reserve and Guinevere varieties. With this in mind, it seems odd that the company’s accounts show a year on year loss, which, conveniently, precludes them paying tax because they haven’t made any profit (technically).
For those of you not familiar with this legal, yet completely amoral way of laundering profits, let me explain.
Perhaps the most potent method of reducing UK tax bill, is to loan the UK company money from a subsidiary in a tax haven. This is what tax planners call a hybrid-loan, which allows companies to deduct the interest payments from their tax bill while repaying the interest to themselves in places that don’t charge tax. This was written about extensively in an investigative piece (see ASDA) by The Peoples News in late October. However, where this situation differs is that Ashcroft owns Gusbourne with other shareholders, but, what he brings to the table is more than just savvy business acumen. For instance, as well as being majority shareholder in Gusbourne PLC, he owns many Belize domiciled companies.
So, theoretically, he can loan Gusbourne PLC money to which they repay him interest which can be used to offset Gusbourne’s tax bill, by redirecting the tax money to Ashcroft in Belize where he pays 0% tax. Effectively, stealing money from UK public services such as the NHS, which only serves to further inflate his pompous ego.
Judging from the financial statements this seems to be what Ashcroft is in fact doing, but it is unclear where the money is being loaned from as he holds dual citizenship in both the UK and Belize.
However, buried deep in Financial Times Markets Data, you find that good ol’ Ashcroft has once again demonstrated his ability to circumvent the spirit of tax law to further line his unfathomably deep pockets.
So, instead of directly repaying interest to Belize Fiduciaries No 3 Limited, it seems the repayment was substituted for shares in Gusbourne PLC, which essentially were paid for with money diverted from the tax man.
On Lord Ashcroft’s Twitter feed, from which I am blocked (like many others who question his tax affairs), he touts stuff like this:
Clicking on the link brings you to a ridiculous conceptualisation of what happens if you tax rich people like him, ending with this…
What Ashcroft has failed to grasp is that capitalism is based on free market forces, and if people don’t like the way you do business, they don’t have to buy your products.