"SavetheUKCC" petition

[John Upham]

Aha: the penny has dropped. I thought it was being said that Mitchell Taylor was a Times person rather than a BCF person.

Mitchell Taylor continued running the event for The Times

Apologies.

[Paul Buswell]

Assuming there was an entry fee, presumably it included VAT and the BCF had to send a VAT invoice if requested. That would have been from some time in the late 1970s when it was ruled that VAT would apply to chess entry fees and memberships. In practice it was only the BCF which was affected, provided clubs and organisations were able to structure themselves to keep turnover below the exemption limit.

The Accounts for 74/75 (the only ones I have) show that the BCF was fully cognisant of VAT (introduced in the U.K. in 1973) so I assume the 'Sunday Times' Schools was on a good foundation in that regard.

As far as I know there was always VAT on memberships, not just from the late 1970s, and the Accounts seem to corroborate that.

PB

[John Upham]

Mike Basman has asked me to post this message:

“Thank you for your lively debate about the UKCC on the Forum. To clear up one point, many people seem to think that the UKCC is an enormous organisation which makes loads of money. In fact it is run by two people (myself and Pat Armstrong) with hundreds of volunteers, and much of it is done from the back of my garage. At no time in my ten year negotiations with HMRC did they ever suggest that I was stashing away money. It was a theoretical debate. Yes, the turnover is great, but the profit is small and any chess player can get by on £20,000 pa. Because the work of running a tournament for 45,000 children from 1,200 schools with 4 stages, 42 Megafinals, two Gigafinals and a Terafinal, is so onerous, people have not understood that my main argument is about saving time rather than money. Whereas HMRC is not concerned about the amount of time we spend on their work.

There were many supportive remarks on the Forum but some of the critical ones seem to lack back-up analysis. For example, D Blower: “I can’t be the only one uncomfortable with the comparison with slavery” (no supporting analysis). Horton: “Yes, completely out of order.” (Same)
Upham: “Rational persons… could easily run away because of the second part…” (no analysis here).
Blower: “Can’t support a reference to slavery”. Norris: “Telling people that Tax evasion is OK is bad” (no analysis).
Varney also complains about the reference to slavery and he asks for a more rational argument, but he doesn’t explain why the arguments I placed in my article “Crisis or Celebration” were not rational.

So, more analysis please. It’s what we chess players are meant to be good at!”

Best wishes,
Mike B

[Roger de Coverly]

The argument that VAT compliance costs time applies to any business or enterprise that hits the turnover threshold. That the business is running a national chess championship for junior players isn't going to get any special treatment from the VAT authorities who will want to see the forms properly filled in.

[JustinHorton]

Yes, the turnover is great, but the profit is small and any chess player can get by on £20,000 pa.

I'm not sure I follow this. Where's the £20,000 from, and what's meant by "any chess player can get by on"?

[Alan Walton]

I am assuming when he says any profit is small is after he has paid himself a salary

What happens to said profits, are the held as cash as security for future years; or paid as a dividend to the shareholder(s) which I assume is Mike alone

[John Upham]

Yes, the turnover is great, but the profit is small and any chess player can get by on £20,000 pa.

I'm not sure I follow this. Where's the £20,000 from, and what's meant by "any chess playee can get by on"?

I believe Mike thinks that anyone (since anyone could be a chess player) could survive with an income of £20K pa. However, your guess is as good as mine!

[Roger de Coverly]

What happens to said profits, are the held as cash as security for future years; or paid as a dividend to the shareholder(s) which I assume is Mike alone

There aren't any shareholders as unusually for a chess organisation Mike ran it himself as a sole trader. That's why it was his personal responsibility when the VAT issue hit the fan. There seem indications that it was paying him a sufficient income as compensation for the hours worked that he paid personal income tax.

[Michael Flatt]

I am assuming when he says any profit is small is after he has paid himself a salary

What happens to said profits, are the held as cash as security for future years; or paid as a dividend to the shareholder(s) which I assume is Mike alone

You might like to take into consideration that MB has been made bankrupt. The appointed administrator has control of all his assets.

[John McKenna]

Mike Basman has asked me to post this message:

“Thank you for your lively debate about the UKCC on the Forum. To clear up one point, many people seem to think that the UKCC is an enormous organisation which makes loads of money. In fact it is run by two people (myself and Pat Armstrong) with hundreds of volunteers, and much of it is done from the back of my garage. At no time in my ten year negotiations with HMRC did they ever suggest that I was stashing away money. It was a theoretical debate. Yes, the turnover is great, but the profit is small and any chess player can get by on £20,000 pa. Because the work of running a tournament for 45,000 children from 1,200 schools with 4 stages, 42 Megafinals, two Gigafinals and a Terafinal, is so onerous, people have not understood that my main argument is about saving time rather than money. Whereas HMRC is not concerned about the amount of time we spend on their work.

There were many supportive remarks on the Forum but some of the critical ones seem to lack back-up analysis. For example, D Blower: “I can’t be the only one uncomfortable with the comparison with slavery” (no supporting analysis). Horton: “Yes, completely out of order.” (Same)
Upham: “Rational persons… could easily run away because of the second part…” (no analysis here).
Blower: “Can’t support a reference to slavery”. Norris: “Telling people that Tax evasion is OK is bad” (no analysis).
Varney also complains about the reference to slavery and he asks for a more rational argument, but he doesn’t explain why the arguments I placed in my article “Crisis or Celebration” were not rational.

So, more analysis please. It’s what we chess players are meant to be good at!”

Best wishes,
Mike B

Serfdom, not slavery, is the comparison I'd have made had I been the plaintiff in this case.

Anyway, yet again, the man of principle is nailed but the robbers get off.

In my previous, and only other, post on this topic I gave a link.

In that link reference was made to a case in which a father and daughter defrauded a major high-street bank (UK government still had a 73% stake in it 2015) out of about £190,000, through an "invoice finance" scheme, by issuing false invoices in 2013-14. They only repaid a combined total of about £95,000 to the bank and administrators. (Wonder what happened to the other £95,000.) Their "family electrical company" went bust with debts of well over a million pounds and assets only worth about half a million. (Wonder who picks up the tab for the lost £800,000.)

They have been "disqualified as directors for a total of 16 years". The father, "a British citizen", is now said to be living in Majorca. (Living on what, I wonder.)

The above example is the thin end of a fradulent wedge, for the thick end see -

https://en.wikipedia.org/wiki/Missing_trader_fraud

From which -

Figures released in September 2006 by Eurocanet, a project sponsored by the European Commission, appear to show that the United Kingdom is the main victim of this fraud – the UK lost an estimated €12.6 billion during 2005–6 – followed by Spain and Italy, which each lost over €2 billion.[1] From 1 June 2007, the UK introduced changes to the way that VAT is charged on mobile phones and computer chips to help combat fraud.[2][3] UK plans to introduce changes to the way VAT is charged on a wide range of goods from December 2006 were aborted because of failure to reach an agreement to reach an agreement with other EU member states.

On a sour note -

"Tragedy is when I cut my finger. Comedy is when you fall into an open sewer... " (Mel Brooks)

Here's a bit of both (with apologies to the late Bialystok & Bloom) -

I give the finger to the big fat toff

He takes his profit as he rips me off.

I lose another to the revenue man

He files my digit in the garbage can.

And I give one to the landlord when the rent comes due -

He flushes it to the sewer with the yuck running thru',

And it goes into the water that we drink,

Hey man, it stinks...

And it's later than you think.


The grotesque monstrosity that VAT has become should be made to shrivel in light of the referendum vote to leave the EU.

If IM Basman had had to pay a simple and direct sales tax of between 5 to 10% on his entry fees I suspect he would have been grudgingly prepared to send HMRC a cheque for the sum total once a year.

I spend my life accounting - with figures and such.

To what is my life amounting?

It figures, not much...

I WANT TO BE A PRODUCER!! (Gene Wilder as Leon Bloom in The Producers)

Edit: to make a few minor corrections and thank Roger for the link, below.

[Roger de Coverly]

If IM Basman had had to pay a simple sales tax of between 5 to 10% on his entry fees I suspect he would have been grudgingly prepared to send HMRC a cheque for the sum total once a year.

HMRC have schemes where smaller traders can be given permission to run their VAT in that manner. The point being that the cost of goods purchased includes VAT.

https://www.gov.uk/vat-flat-rate-scheme/overview

[Andrew Varney]

In response to Mike Basman's posting above:

* I agree completely that working professionally in junior chess is not a highly paid activity. I well understand the outlay involved and time expended, even at a local level. Once expenses are accounted for I doubt if many professional junior chess organisers or coaches are earning much above minimum wage, and many more do these things entirely on a voluntary basis. I think this is the point that Mike is making about living on £20K per year. I have heard some people speculate that Mike is personally making a lot of money out of the UKCC. I doubt it. It is a labour of love.

* I can see how the analogy with slavery might therefore arise as hyperbole, but I think it is unwise to resort to this and state "as a result I can only conclude that they [HMRC] are trying to re-legalise slavery." It is quite obvious that it is not HMRC's intention to re-legalise slavery but to fulfil their remit to uphold the tax laws in this country, however flawed they may be.

* I also can identify with the extra work involved with keeping track of one's accounts, not least as a sole trader with respect to income tax, let alone any VAT in addition. However, along with the simplified set allowances, "cash basis" etc for income tax for the self employed, as I understand it from what has been posted above, there is a simpler way that things can be run in the "flat rate VAT scheme". It is also quite reasonable to employ an accountant if one wants to limit the amount of work undertaken oneself. Clearly this would have to be budgeted for, but is unlikely to represent an excessive additional amount as a proportion of the annual turnover of the UKCC.

Arguing about slavery is unlikely to engage the typical chess parent. I know from my own discussions with many that it has put some people off, although I have encouraged them to look at the underlying issue and support the petition in any case, which many have already started to do.

[JustinHorton]

Being self-employed is like slavery because under slavery you don't have a boss telling you what to do.

[John Upham]

See http://www.keverelchess.com/uk-chess-ch ... -swansong/

[JustinHorton]

Even now, the authorities are assessing his assets to see whether being forced to sell his house in Chessington would cover the bill.

Are we sure this is right?

last January the law was changed

Which doesn't at all affect the situation for the previous twenty years and would not have done so if chess had been included

Basman’s case is that he works tirelessly in his own time

This implies that he receives no income from the event. Is this actually the case?

the nightmare of accountants, rigorous book-keeping, tax inspections etc

The normal obligations of any self-employed person

Compare this treatment by the Government

HMRC are not in fact "the Government" and nor are the courts. And "treatment" here means "the normal and proper course of events after several years of legal proceedings" which have been prolonged by a particularly specious and purposeless appeal on Mike Basman's part.

for all his efforts, freely given over two decades

As per above: does "freely" actually possess the meaning that the word implies?