Lord Sugar Needn't Be So Bitter

So, Lord Sugar was on GMTV this morning chatting to his old mate Piers Morgan about his 58 million reasons to have it in for corporations that choose legal tax planning as a method of reducing their tax bills.

His Lordship did admit that one of the reasons he wrote out the eye-wateringly large 'Gregory' (pictured) was that he, in turn, wanted to reduce his liability to the Crown by taking advantage of their early payment terms. A saving reckoned to be in the region of a measly 3-and-a-half mil.

Well, I for one, take my 'titfer' off to Lord Sugar for running a business that gives him a personal wealth far in excess of 99.99% of his fellow Brits and enables him to squirrel away the sort of cash reserves that are, normally, only found down the back of a Russian oligarch's sofa. However, what he fails to point out, in his quest to speak directly to the popular press and the man on the Clapham Omnibus, is that Directors of large corporations, as well as far smaller entities, are charged with a responsibility to maximise the dividends that the company pays to it's shareholders. They, after all, are the people that have put the money into the business and are the ones who stand to lose the most if the company simply ignores the task of reducing costs in favour of retaining some sort of moral high ground. There are no prizes, let alone bonuses, for the Director that gleefully hands over profits to the Taxman on the basis that it helps him sleep better at night and gives him a warm feeling when he thinks of all the incubators the NHS are going to buy with it. Though there is much kudos to be gained by popular television personalities in absorbing the ever-increasing tax burden put upon us by this wasteful state, most Company Directors have to cope with the rough and tumble of competitive business without being able to fall back on the income generated by a portfolio of highly valued Mayfair properties.

Perhaps he could explain what is so terrible about companies keeping their profits instead of sending them to the Treasury. Putting wealth into the hands of investors and allowing them to innovate and invest in growth is the very lifeblood of the UK economy and the type of philosophy that help Mr Sugar rise to the dizzy heights of Lord-dom, via Tottenham Hotspurs and TV fame. Sucking every penny out of private enterprise in order to fund the state was NOT what bred Amstrad and the other global technology brands that continue to make super-profits from the over taxed consumer. Indeed, giving people more spending power through less taxation is thought to be one of the ways to grow the economy back to the levels at which the UK was the most successful.

That a business listens to advice from highly paid and highly qualified professionals, should not be a basis for criticism. Our accountants and lawyers are among the few people who can find a way through the laws and regulations that Lord Sugar and his respected fellow peers (as opposed to Piers) are charged with making and amending in their role as an unelected second house. His Lordships suggestion from his pedestal on GMTV was that, if tax avoidance is within the law - change the law! Well, Lord S, you are in an ideal place to do this.

Unfortunately, though, changing a law on the grounds of morality may not be quite as moral as you would like to think. Because the HMRC has now decided that tax advice that was formerly accepted as 'legal', has now become classified as 'illegal', many companies are about to face punitive tax bills that will cripple most and force some out of business altogether.

Whilst Alan Sugar may accept that this is just desserts for greedy individuals who can't even afford their own yachts, some may say that it is tantamount to parking your car, only to return from your shopping trip to find that someone has painted double yellow lines under it and issued you with a parking fine, not only that, they have back-dated it to the time when you first parked there 10 years ago!

Thanks Lord Sugar for The Apprentice, the CPC 64 and my Sky Box, but keep your pronouncements on business morality for those who can afford them.