I’ll Bet You The Guardian Won’t Pay Any Tax On This Vast Profit!
NOW here’s a thing. The Scott Trust Limited, which owns the Guardian Media Group, which in turn owns The Guardian, is just about to make a vast profit. And it will pay no tax at all on that vast profit.
Which is interesting, don’t you think, given that newspaper’s constant refrain that big business is ripping us all off by not paying taxes?
Guardian Media Group is selling its 50.1% stake in Auto Trader owner Trader Media Group to private equity firm Apax Partners in a deal thought to be worth £600m to £700m to the Guardian publisher.
The sale to Apax, which bought 49.9% of Trader Media Group in 2007 and has been GMG’s joint venture partner in the business since then, is thought to give TMG an enterprise value of about £1.8bn. The exact financial details of the deal were not revealed.
That puts their total profit on the whole deal well over a billion quid. And they’ll pay no tax whatsoever on any of it. Which, as above, is interesting given the way that they go on and on about how it is the moral duty of business to pay taxes, isn’t it?
As to why they’ll pay not tax that’s simple. Gordon Brown passed a law saying that they wouldn’t have to pay tax. If you own a big chunk of a company and then sell it, and you’re also a company, then you pay no tax on your profits from the sale. It’s called the substantial shareholdings exemption (SSE).
And GMG sold the first half to Apax back in 2008, making a £300 million profit and they paid no tax at all. Well, OK, you might think that this is fine because of that SSE.
Ah, but, before the sale the Scott Trust Limited was in fact the Scott Trust. And as a trust it couldn’t use that SSE. So, they changed from being a trust to being a limited company and that meant that they could use the SSE and not pay tax.
Of course, not one of them will ever admit to any of this as it’s always very much a case of do as I say, not as I do, isn’t it?