The Business Journalist and her tax muddle

My timeline was, on Thursday evening, chuckling about the fact that Margaret Hodge had run into a little difficulty when being asked by Krishnan Guru-Murthy of Channel 4 News about her own tax arrangements.

Whilst it was certainly quite amusing to watch her use the same answer about her affairs that she has publicly derided the likes of Google, Amazon and Starbucks for, my attention was caught by the clip which proceeded it.

I am not an accountant nor an economist – let alone a business reporter – but so far as I can see Siobhan Kennedy made two glaring errors in that piece.

The first is one same one which everybody seems to make these days: confusing sales with profits. Whether this is deliberate or due to ignorance I leave up to you, dear reader, and your personal prejudices.

It was the second one though which had me, to use the modern parlance, facepalming. Indeed I even went back and listened to it again just to make sure I was hearing correctly:

…making sales which could be subject to income tax under UK law.

Frankly, I’d expect better from a business journalist.

4 Comments

  1. SadButMadLad says:

    It’s not only a business journalist. I also heard Vince Cable say on R4 that businesses should pay income tax. I nearly crashed my car when I heard that. The guy in charge of the UK’s business hasn’t got a clue about how it all works?

    • Misanthrope Girl says:

      Is it any wonder that there is a campaign to have financial literacy taught in schools?

  2. The Thought Gang says:

    There are two reasons why people who do know that tax isn’t paid on sales still insist on referring to sales.

    1. Sales will be a big number. This suits the narrative. That most people won’t appreciate the trick is the reason the trick is pulled.
    2. Referring to profits, upon which tax *is* due, is no use when there are none, and the whole debate is about why that should/shouldn’t be the case. So the informed listener/reader is invited to think ‘if there are all those sales, then there should be some profits upon which tax should be payable’.

    As for calling corporation tax ‘income tax’, I don’t think there’s any issue with the likes of Vince Cable not understanding the system. CT is regularly referred to as ‘corporate income tax’.. so it’s just a version of that. I’d agree that they shouldn’t do it.. but would suggest it’s a symtom of carelessness rather than incompetence.

  3. jameshigham says:

    Could be subject to tax, eh?