Transfer pricing is not synonymous with tax avoidance, Stemcor said in response to ‘allegations’
The Daily Telegraph has apologised to Margaret Hodge, the Labour MP for Barking and chairman of the Commons public accounts committee (PAC), for a news story published on 20 November regarding Stemcor, a privately owned steel trading company in which Hodge has a shareholding.
An item posted on the Telegraph website last night said: ‘Margaret Hodge MP – Contrary to our report “Hodge faces challenge over family firm’s taxes” (Nov 20), Stemcor, in which Ms Hodge has a small shareholding, has not abused transfer pricing to avoid tax. We accept that there is no inconsistency or hypocrisy in Ms Hodge criticising other companies for tax avoidance and apologise to her for any contrary impression.’
‘Won't allow PAC's crucial work on tax avoidance to be undermined by politically motivated smears. I am not a hypocrite,’ Hodge said on Twitter this morning, having linked in a previous tweet to what she described as a ‘full retraction and apology from Telegraph re false allegations about my family's company’.
Hodge added that the company ‘does not avoid tax’.
As Tax Journal reported yesterday, David Goldberg QC has described MPs’ recent criticism of multinationals as an ‘unprincipled attack on the rule of law’. The PAC had set up its own standard for HMRC and criticised the department for not achieving that standard, he argued in a letter to The Times. ‘But the standard set up has no basis in fact or in law,’ he wrote, and Hodge had adopted ‘far too broad a conception of tax avoidance’.
However, Hodge’s work has drawn a good deal of popular support, and a leading article in The Times last weekend said Hodge and the PAC ‘deserve plaudits for so influencing the popular mood’.
Stemcor said in a statement on 20 November that several comments had appeared in the press ‘suggesting that Stemcor is involved in aggressive tax avoidance in the UK’.
The company said: ‘Stemcor refutes these allegations and issued a statement on November 10th explaining the reasons for the low tax charge in the UK in 2011.’
The statement set out detailed responses to published extracts from a letter sent to Hodge by Priti Patel, the Conservative MP for Witham.
‘Over the past five years Stemcor has paid £27m in UK corporation tax, an effective tax rate of 32% based on UK generated profits. This compares to an average corporate tax rate in the UK for the same period of 28%,’ the company said.
‘“Transfer pricing” is not synonymous with “tax avoidance,” it added. ‘Stemcor has nothing to hide and would be happy to provide more detail about its tax affairs to the media if requested. Stemcor’s annual reports for the past five years are available to anyone who requests them via www.stemcor.com.’
Transfer pricing is not synonymous with tax avoidance, Stemcor said in response to ‘allegations’
The Daily Telegraph has apologised to Margaret Hodge, the Labour MP for Barking and chairman of the Commons public accounts committee (PAC), for a news story published on 20 November regarding Stemcor, a privately owned steel trading company in which Hodge has a shareholding.
An item posted on the Telegraph website last night said: ‘Margaret Hodge MP – Contrary to our report “Hodge faces challenge over family firm’s taxes” (Nov 20), Stemcor, in which Ms Hodge has a small shareholding, has not abused transfer pricing to avoid tax. We accept that there is no inconsistency or hypocrisy in Ms Hodge criticising other companies for tax avoidance and apologise to her for any contrary impression.’
‘Won't allow PAC's crucial work on tax avoidance to be undermined by politically motivated smears. I am not a hypocrite,’ Hodge said on Twitter this morning, having linked in a previous tweet to what she described as a ‘full retraction and apology from Telegraph re false allegations about my family's company’.
Hodge added that the company ‘does not avoid tax’.
As Tax Journal reported yesterday, David Goldberg QC has described MPs’ recent criticism of multinationals as an ‘unprincipled attack on the rule of law’. The PAC had set up its own standard for HMRC and criticised the department for not achieving that standard, he argued in a letter to The Times. ‘But the standard set up has no basis in fact or in law,’ he wrote, and Hodge had adopted ‘far too broad a conception of tax avoidance’.
However, Hodge’s work has drawn a good deal of popular support, and a leading article in The Times last weekend said Hodge and the PAC ‘deserve plaudits for so influencing the popular mood’.
Stemcor said in a statement on 20 November that several comments had appeared in the press ‘suggesting that Stemcor is involved in aggressive tax avoidance in the UK’.
The company said: ‘Stemcor refutes these allegations and issued a statement on November 10th explaining the reasons for the low tax charge in the UK in 2011.’
The statement set out detailed responses to published extracts from a letter sent to Hodge by Priti Patel, the Conservative MP for Witham.
‘Over the past five years Stemcor has paid £27m in UK corporation tax, an effective tax rate of 32% based on UK generated profits. This compares to an average corporate tax rate in the UK for the same period of 28%,’ the company said.
‘“Transfer pricing” is not synonymous with “tax avoidance,” it added. ‘Stemcor has nothing to hide and would be happy to provide more detail about its tax affairs to the media if requested. Stemcor’s annual reports for the past five years are available to anyone who requests them via www.stemcor.com.’
