[Update at end of post]
The desperation of the perpetually thirsty Paul Staines and his tame gofer, the flannelled fool Henry Cole, to use the pulpit of the Guido Fawkes blog to smear politicians whose stance is not to their liking has plumbed new depths today – and it’s too late to edit it all out, lads, I took screen shots – as they show even less knowledge of limited companies than before.
Looking to enrol on an accountancy course?
And, given that Staines appears to be in control not only of a limited company, but one registered offshore in the island of Nevis, one can only conclude that the posts in question sprang from the imagination of the buffoon Cole. The first target for the less than dynamic duo is Labour’s London Mayoral challenger Ken Livingstone, whose company the Fawkes blog describes as a “shell”.
In Guido World, an active company is a shell ...
That’s a quite staggering admission of ignorance: a “shell” company is by definition one that is not trading. But Silveta Limited, Livingstone’s company, most certainly is trading, and the Fawkes blog has been demonstrating this by publishing part of that company’s Abbreviated Balance Sheet, including the “cash at bank or in hand” at the end of the last financial year.
And, talking of “cash at bank or in hand”, this is yet another concept that the flannelled fool is having difficulty getting his brain round, as shown by a post trying to kick former PM Pa Broon. The Abbreviated Balance Sheet for the limited company he runs with wife Sarah shows an amount of £209,343, then the Fawkes blog suggests that this is Brown’s own money and should be subject to Income Tax.
... and company cash reserves are a directors' piggy bank
Does the clown Cole really think that “cash at bank or in hand” is a director’s own personal tax-free piggy bank? Does he not understand that a company’s money belongs to that company and it is not in the gift of the directors to use it as some kind of pocket money fund? Perhaps he could ask Staines to enlighten him. He certainly needs someone to teach him Limited Company 101.
It’s one of the many misunderstandings of the recent limited company saga, and needs to be put straight, although Staines, Cole and dodgy hackery purveyor Andrew Gilligan would rather their readership remains ignorant. Money that comes into the company does not automatically accrue to its directors or employees. That only happens when it is paid to them (and appropriately taxed).
Until then, any funds belong to the company and cannot just be taken out and spent at will. The “cash at bank or in hand” item is nothing to do with directors’ or employees’ income. Cole may believe that he is being awfully clever by suggesting that the former PM is trousering over £200,000, and that he has discovered some underhand dodgy deal. But Brown isn’t, and so he hasn’t.
Back to the drawing board, lads. Another fine mess, once again.
[UPDATE 4 April 1200 hours: this post has also featured in an edited version at Liberal Conspiracy. My thanks as ever to Sunny Hundal.
Richard Murphy (in the comments, #4) has disagreed with the definition of "shell company" that I used, but has pointed out that the description he recognises still cannot be used to describe what Livingstone is doing]