"SavetheUKCC" petition

[Carl Hibbard]

• - Mike Basman owns the house
  - Mike Basman does not own the house
  - Mike Basman part-owns the house.

Mike has got himself in enough of a mess without anybody here discussing this house issue further.

[John McKenna]

Butler: What shall we do, Master Michael? What shall we do?
Michael: There's only one thing to do, Peacock. We must inform the police.
Butler: But your granfather's good name, sir?
Michael: I shall say I did it.
Butler: No! I am an old man. Let me say I did it.
Michael: What was your motive?
Butler: Money.
Michael: They'd never believe you.
Butler: Why not, sir? After all, I haven't been paid for seven years. Begging your pardon, sir.
(The Wrong Box)

What was International Master Michael's motive in not paying VAT on his entry fees?

It would appear that he did so in order to buy time - he just continued running his events for as long as he could, in the manner to which he was accustomed, letting the legal channel run its course and had his day in court to plead his case.

Others, who are now critical of his actions, would have done things differently in his situation. However, it was his business (from which he only drew a fairly modest income it seems) and the decisions about how to run it were his to make. Many benefitted and the only injured party - apart from a very minor graze to HMRC, which will probably soon be healed - is the man himself.

"A man has but one youth... all the wealth in the world will not purchase another." (Sir Roger North, On the Study of the Laws)

[Roger de Coverly]

What was International Master Michael's motive in not paying VAT on his entry fees?

On the face of it, he couldn't be bothered.

With a school entry fee of £ 40 per school covering 40 players and claimed numbers above 50,000 that's a lot of turnover. Against that the cost of prizes and awards would offset that to a considerable degree, so the actual increase in entry cost to cover VAT ought to have been modest. But that would have involved filling in the VAT forms or getting dispensation to use a simplified method.

The other big turnover would be the £ 15 per head entry fees to the Mega, Giga and Strat stages. The latter two would have entries in hundreds, thus not a turnover issue in themselves unless combined with the school level fees. County (Mega) finals on the other hand would have been £ 15 * average number of entrants * number of events. A plausible if evasive way round the VAT issue for these would have been for the local junior organisations to take on enough of the running and finances to make them locally independent events. That is, after all, the relationship between the ECF and Congresses.

[JustinHorton]

It would appear that he did so in order to buy time - he just continued running his events for as long as he could, in the manner to which he was accustomed, letting the legal channel run its course and had his day in court to plead his case.

Or put another way, he operated for years in a way that he had every reason to believe was outside the law, and once this had been confirmed in a court of law, continued to do so.

However, it was his business (from which he only drew a fairly modest income it seems)

We don't actually know this, and a few efforts are being made to hint that it is otherwise

and the decisions about how to run it were his to make

No they weren't

apart from a very minor graze to HMRC, which will probably soon be healed

Our specific reason for considering either of the assertions here to be correct?

[Nick Grey]

So the UKCC are Trotters Independent Traders & Mike is Del Boy.

Only it's not as funny... No income tax, no VAT, no money back, guaranteed

[David Blower]

I didn't know we were here to discuss cases with Apple and Google, but if we are, then they haven't done anything wrong.

[Jonathan Bryant]

I didn't know we were here to discuss cases with Apple and Google, but if we are, then they haven't done anything wrong.

In the case of Apple, at least, the European Commission would beg to differ.

This is the problem with trying to draw a distinction between tax avoidance and tax evasion. Somebody may claim something is the one thing and yet later on the authorities declare it to be the other.

[Mike Truran]

That's true, but UK politicians (and no doubt those in other countries) have a nasty habit of trying to influence public opinion to believe that you're guilty until proved innocent rather than the other way round.

[Michael Farthing]

I didn't know we were here to discuss cases with Apple and Google, but if we are, then they haven't done anything wrong.

In the case of Apple, at least, the European Commission would beg to differ.

This is the problem with trying to draw a distinction between tax avoidance and tax evasion. Somebody may claim something is the one thing and yet later on the authorities declare it to be the other.

No, rather they allege this.
The matter, thankfully, is still ultimately determined by the Courts who do so by studying The Law

[MartinCarpenter]

Don't think the EC have said Apple did anything wrong actually, much less happy with Ireland though

[Jonathan Bryant]

No, rather they allege this.

You seem to be disagreeing with something I haven’t said.


Anyhoo, the point is that things may move from being seen as tax avoidance to tax evasion and back again - and the perception may differ according to who is doing the perceiving. Which makes it difficult to make categorically put one situation into one box or another. I am, in any event, less sanguine thank Mike about the 'acceptability' of tax avoidance regardless of the legal situation,'It’s not illegal' being the last refuge of the scoundrel.

None of this seems to be relevant in the Basman case given that a ruling was given there some time ago.


Incidentally I’m not sure that this,

What was International Master Michael's motive in not paying VAT on his entry fees?

On the face of it, he couldn't be bothered.

really appeals to me as an explanation. OF course it’s impossible to infer the motives of others’ behaviour with any degree of certainty but the following feels more likely to me


1. MB decides that he shouldn’t have to pay VAT
2. MB decides that he doesn’t have to pay VAT
3. MB decides that he won’t pay VAT


That said, I’m not entirely sure how you jump from 1 to 2 or 2 to 3. Or how quickly and with how much conscious thought. Or why you wouldn’t double check your assumptions along the way.

Still, the model feels a bit more nuanced than the idea of a simple "couldn’t be arsed". It also explains how Basman got from a position for which many of us would have some sympathy to one which it’s hard to support regardless of obvious general underlying positive feelings for the UKCC and it’s history.

[Michael Farthing]

No, rather they allege this.

You seem to be disagreeing with something I haven’t said.


Anyhoo, the point is that things may move from being seen as tax avoidance to tax evasion and back again - and the perception may differ according to who is doing the perceiving. Which makes it difficult to make categorically put one situation into one box or another. I am, in any event, less sanguine thank Mike about the 'acceptability' of tax avoidance regardless of the legal situation,'It’s not illegal' being the last refuge of the scoundrel.

Ah, welll you have elegantly summed up above precisely what I am disagreeing with. Things do not move between evasion and avoidance and back again and it has nothing to do with the perceiving. If something is tax evasion it is tax evasion full stop. Things may be seen as tax avoidance or not by individuals who think people should pay tax when it is not due as some sort of compulsory social charity.

[Jonathan Bryant]

Ah, welll you have elegantly summed up above precisely what I am disagreeing with. Things do not move between evasion and avoidance and back again ....

And yet, ironically, I didn’t say that they do.


I think I will leave this one here.

[John McKenna]

Jonathan may be content to stop there but I'd like to continue with some answers to Justin in particular and certain others in general...

Dealing with the latter first - tax avoidance and evasion only exist in specific cases when the UK courts judge that they do. Those judgements are often subject to appeals to higher courts and could be overturned.

It would appear that he did so in order to buy time - he just continued running his events for as long as he could, in the manner to which he was accustomed, letting the legal channel run its course and had his day in court to plead his case.

Or put another way, he operated for years in a way that he had every reason to believe was outside the law, and once this had been confirmed in a court of law, continued to do so.

Putting it yet another way - what to do is a bone of contention between the plaintiff, his conscience, and the law until the legal process is exhausted.

However, it was his business (from which he only drew a fairly modest income it seems)

We don't actually know this, and a few efforts are being made to hint that it is otherwise

We know it was his business - UK Chess Challenge/Michael Basman sole trader.

How much a sole trader can take out of his business is also his business.

(The maximum possible - without putting the business into debt - would be the residual net profits. It is quite possible that the UKCC's were not much greater than the £20,000 figure being bandied about. What makes you think there may be anything much more to it than that?)

and the decisions about how to run it were his to make

No they weren't

Yes they were.

apart from a very minor graze to HMRC, which will probably soon be healed

Our specific reason for considering either of the assertions here to be correct?

Two specific reasons -

1. HMRC collects, fails to collect and loses (to fraud) such huge sums of tax revenue that £300,000 is but a drop in an ocean.
Here's a much bigger, but still insignificant, example from the fairly recent past -

http://www.bbc.co.uk/news/uk-scotland-g ... t-28231598

http://www.bbc.co.uk/news/uk-34720850

Also worth noting is the broadcast today at noon on BBC Radio 4 of Moneybox, on again, 21:00 on Sunday -

http://www.bbc.co.uk/programmes/b07rgybs#play

Thousands of people in social work and other professions face large and unexpected tax bills after HMRC won a court case about what are called managed service companies - MSCs. They are set up by people who work through a separate company which then rents their services to a firm instead of them being taken on as a regular employee. Many firms prefer that arrangement to avoid the liabilities and costs of being an employer. The worker can gain big savings by paying less tax and national insurance. Now HMRC wants that money back. And the bills are huge. Many face bankruptcy. Money Box talks to health professional Laura who found she owed HMRC almost £12,000, including penalties and fees.

2. Bankrupty makes possible restitution to the "public purse" through the seizure and sale of assets. If those are insufficient to cover the amount owed it probably just goes to show that the plaintiff has not enriched himself very much through his business activities. Are you implying that there is a lot more to this than meets the eye and that justifies digging deeper?

[JustinHorton]

I'm not implying anything: I'm saying explicitly that there is a good deal that it would be pertinent to know that we do not know, because Mike Basman and his advocates, while saying a good deal that is irrelevant or misleading, have preferred not to tell us.

I'm also saying that no, we don't have the right to take our own business decisions outwith the dictates of the law, that the legal process here - as far as the validity of applying VAT in relation to UKCC is concerned - appears to have been exhausted some time ago, that there is no reason to think that the courts' rulings came a a surprise to Mike Basman and that comparisons to other cases are therefore misleading, that we don't know what income, if any, Mike Basman derived from UKCC or whether it can be described as modest, that a wound is not really healed unless restitution is made in full and that if you think three hundred grand is a "minor graze" then I recommend that you engage in illegal conduct that deprives the state of that amount of revenue and see if the courts are minded to take a similar view. (This last point may be a more useful standard of comparison than whatabouttery invoking Google.)

Shorter me: I am not terribly interested in what people reckon. I am mostly interested in what people know.