Sunday, 26 April 2015

Company Man

Tom Gordon and Paul Hutcheon

ALEX Salmond is to use a private company to receive his outside earnings from publishing, potentially cutting his tax bill.

The former First Minister is the sole shareholder in a new firm, The Chronicles of Deer, it has emerged.

The company will be the vehicle for Salmond’s flourishing career a writer, which includes newspaper columns and his best-selling referendum diary The Dream Shall Never Die.

It already holds the copyright on The Dream Shall Never Die.

The arrangement, which is not unusual for authors, could potentially reduce Salmond’s tax liabilities.

Instead of being subject to higher rate income tax of 40% or 45%, money going to a company can be subject to corporation tax at just 20%.

Money can then be withdrawn gradually as salary and dividends, reducing income tax and national insurance.

Salmond's outside earnings are expected to run into tens of thousands of pounds.

One of the two directors of Salmond's company is an accountant who specialises in “tax efficient investments”.

However, any benefits derived from using a company may be offset by operating costs, and authors are advised to take professional advice on the matter.

Despite Salmond starting his newspaper columns in February and his book coming out in March, the firm has yet to receive any money, raising questions at Holyrood about whether Salmond has arranged his affairs to avoid publicity before the general election.

Sources close to Salmond, who is standing in Gordon on May 7, deny this.

Scottish LibDem leader Willie Rennie said: “Why is Alex Salmond being so coy? 

"Surely it would be best to simply declare what he has earned from his book sales and newspaper columns now? What has he got to hide?”

Salmond, who is also MSP for Aberdeenshire East, declared the new arrangement in his Scottish Parliament register of interests earlier this month - it was published on Friday.

It states: “From 2 March 2015 I have owned an ordinary shareholding worth £1 in Chronicles of Deer, a company for publishing books and writings.

“This constitutes 100% of the issued share capital. 

"As at the end of financial year 2014/15 (6 April 2015) no monies have been paid into the Chronicles of Deer company account from any source and it has a zero balance.”

The Chronicles of Deer was incorporated as a private unlimited company on February 13.

Its directors are solicitor Tasmina Ahmed-Sheikh and accountant John Cairns.

Ahmed-Sheikh, the SNP’s candidate in Ochil & South Perthshire, is Salmond’s lawyer, while Cairns is Salmond’s accountant.

Salmond thanks them both in the acknowledgements of The Dream Shall Never Die.

Because the new company is unlimited rather than limited - meaning Salmond has unlimited liability for any debts - it is not required to file annual accounts at Companies House.

However Salmond has told the parliament he will voluntarily update his register of interests to declare all income as it arrives.

Cairns is a partner at chartered accountants French Duncan.

According to his profile on the firm’s website, he specialises in "advising owner-managed businesses and their owners on a wide range of tax matters, including: acquisitions and sales; reorganisations; share valuations; succession planning; shares schemes; tax efficient investments and inheritance tax planning".

The name of the company is a play on The Book of Deer, the first book to use both Scots and Irish Gaelic, which was produced in the tenth century by the monks of Deer Abbey near Salmond’s home in the Aberdeenshire village of Strichen.

Salmond’s spokesman said: “Mr Salmond has updated his entry in the register of interests according to the rules. The entry notes that as at the end of the financial year 2014/15, the company account had a zero balance with no moneys received, either from book sales or journalism.

“It is common practice, indeed the norm, for writers to establish companies to separate earnings from journalism and books from other income and the fact that the company is unlimited merely reflects that it carries no risk of default and that Mr Salmond as the 100% shareholder is willing to meet all company obligations in all circumstances.

“Clearly given Mr Salmond’s willingness, in the interests of transparency, to declare all company earnings within the relevant timescale, this goes far beyond the declarations that would be made in company accounts the following year making the claim of lack of disclosure simply absurd, indeed it is the complete reverse of the truth.”

The spokesman also pointed out that Salmond had made a large number of charitable donations from other income, including giving his First Minister’s monthly pension of £2598 to the Mary Salmond Trust for community and youth causes in the North East of Scotland, dividing a £12,500 speaking fee from Bank of America between four Scottish charities, and distributing  £39,750 raised from the auction of First Ministerial gifts.

It is understood The Chronicles of Deer may also make charitable donations.

Sunday, 15 March 2015

Healthy Choices

LANARKSHIRE has long been a byword for political backscratching, from Monklands to property deals, virtually all of it involving the Labour Party.
But today the boot is on the other foot, with Cabinet Secretary Alex Neil, the SNP MSP for Airdrie & Shotts, caught up in a cronyism row.
Last autumn, while serving as health secretary, he appointed the secretary of his local SNP branch to a £12,000 NHS post instead of a veteran social work professional.
Neil staunchly defends Phil Campbell as simply the best person for the job.
However voters might perceive it as all rather cosy.

Neil also seems to have left himself vulnerable to a complaint under the Scottish Ministerial Code. Section 5.9 of the Code says ministers "must" consult the First Minister before making "any appointment which is likely to have political significance".
Neil knew from the outset that there would be a political row about Campbell's appointment.
"Obviously, before I had decided to appoint him, I knew that the Labour party would try to cause a stink about it," he said yesterday.
Yet Neil didn't consult the First Minister (then Alex Salmond), as the Code commands.

Here's a longer version of the story in today's Sunday Herald.

Tom Gordon
Scottish Political Editor

ALEX NEIL is embroiled in a cronyism row after promoting an official from his local party to a £12,000-a-year post on an NHS board instead of a senior health professional.

In his previous cabinet role as Health Secretary, Neil appointed railway manager Phil Campbell as vice-chair of NHS Lanarkshire instead of respected social work expert Dr Avril Osborne.

Campbell, a full-time First Group worker, is secretary of the SNP in Neil’s Airdrie & Shotts seat.

Dr Osborne, the loser in the two-horse race, is a former inspector of social work at the Scottish Office with 40 years experience in her field and a Masters degree in management.

After the Orkney child abuse scandal in the early 1990s, when officials wrongly removed children from their families, she was sent in to fix the department as its new director.

One of the biggest issues currently facing Lanarkshire and other NHS boards is the integration of health and social work services.
Alex Neil

Neil, now Secretary for Social Justice, Communities and Pensioners’ Rights, personally made the decision to appoint Campbell over Osborne last November.

Labour said the appointment “stinks of cronyism”.

Neil first appointed Campbell, 40, to the board of NHS Lanarkshire in May 2013, on a four-year term paying £8008 a year for a commitment of eight hours a week.

After the previous vice chair stood down last summer, board chair Neena Mahal asked its non-executive members to apply for the position, and it came down to a straight fight between Campbell and Osborne.

At the end of October, Mahal put the pair forward to Neil for a decision, saying both were “strong nominees” but had “different skillsets and expertise”.

Mahal said that since 70-year-old Osborne joined the board in March 2014, she had made “a significant leadership contribution” and “quickly gained credibility and respect as a valued member of the Board... [and] is committed to an ethos of quality and improvement”.
Dr Avril Osborne

While Campbell brought “a fresh perspective from the corporate sector”, had demonstrated “a robust and rigorous approach to governance”, and “gained credibility as a Board member who endeavours to be fully involved... in spite of being in full-time employment”.

Mahal said she would welcome a chance to discuss both nominations with Neil “to determine the most suitable person”, however four days later Neil chose Campbell without further ado.

The promotion gave Campbell a £4004-a-year pay bump for four extra hours work per week. 

Section 5.9 of the Scottish Ministerial Code says ministers "must" consult the First Minister about “any appointment which is likely to have political significance”, but Neil did not do so, despite anticipating a row with Labour.

A fortnight after the decision, Neil was moved out the health brief in a reshuffle and is now the Secretary for Social Justice, Communities and Pensioners' Rights. 

Pamela Nash, Labour MP for Airdrie and Shotts, said: “Alex Neil picked a man who knocked doors and delivered leaflets for him, rather than a woman with senior management experience in social work.

From NHS Lanarkshire Annual Accounts 2013-14
“At a time when our NHS is under huge strain this stinks of cronyism and jobs for the boys.

“NHS Lanarkshire is facing huge challenges because the SNP Government aren’t giving our NHS the support it needs.

“People will find it very hard to believe that an SNP official was the best man to stand up for the NHS in Lanarkshire.”

Neil vigorously defended the appointment, saying Campbell was simply the best person for the job and it would have been wrong to reject him in case his SNP ties led to controversy.

He told the Sunday Herald: “The reason I picked Phil Campbell, number one, he was the most experienced member of the NHS Lanarkshire board.

“Obviously, before I had decided to appoint him, I knew that the Labour party would try to cause a stink about it.
Neil's PS tells health officials he has appointed Campbell

“It’s a bit of a cheek from Pamela Nash and the Labour Party to accuse anyone else of cronyism  when Lanarkshire Labour and the Mafia that runs it have lived off cronyism for 50 years.

“This was not cronyism, this was me picking the person who was the best person for the job and who had been nominated by the chair of the board.

“I don’t think there’s anything unreasonable about that whatsoever, and he is a first class vice chair in NHS Lanarkshire, and he got it on merit, almost despite the fact he was politically active, because I knew it would be controversial because the Labour Party would kick up a stink.”

Neil said of Campbell: “He’s a very senior guy in the railway industry and it’s another reason why I picked him, because of his experience in business.

“I think we need, in terms of improving procedures and processes in the Health Service, we need outside business expertise and Phil can provide that as well.

“So he ticked every box that was conceivable in terms of competence and capability.

“I adhered entirely to the code of practice in all of these things.

Scottish Ministerial Code
“Labour’s looking for a scandal where there isn’t one.

“What Pamela Nash knows about the health service you could write on the back of a postage stamp.”

Campbell did not respond to email requests for comment.

NHS Lanarkshire said: “We are delighted with the appointment of Phil Campbell to the role of vice-chair and with the skill and expertise he brings to the Board.”

Sunday, 8 March 2015

Prosecutors consider Wings over Scotland's referendum spending

Tom Gordon

ONE of the loudest and most controversial Yes supporters in the referendum could be charged with a criminal offence over missing financial papers, the Electoral Commission has said.

The watchdog said that, alongside prosecutors, it was now considering whether to take enforcement action against the Wings Over Scotland website run from Bath by Scots-born Stuart Campbell.

It emerged last month that Wings Over Scotland and four smaller campaigners had failed to report their spending during the referendum.

Using Freedom of Information law, the Sunday Herald asked the Commission for the material it held on Wings Over Scotland and another high-profile campaigner, Labour for Independence (LFI), not filing spending returns.

In both instances, the Commission refused to release its files in case it prejudiced “the prevention or detection of crime” and “the apprehension or prosecution of offenders”.

With respect to Wings over Scotland, it said: “The Commission has commenced its inquiries and is currently considering, in conjunction with the Crown Office, what, if any, action is appropriate in relation to this organisation’s failure to deliver a campaign expenditure return with the required timescale.

“In this case it is necessary to consider the failure to comply in order to reach a decision whether a person or person should be charged with a criminal offence.”

The Commission used the same form of words about LFI, but added that in regard to Wings Over Scotland it might also consider civil breaches.

Both Wings over Scotland and LFI are being probed in relation to Paragraph 21 of Schedule 4 of the Scottish Independence Referendum Act 2013.

This states that official campaigners - those who registered with the Commission as permitted participants as they expected to spend more than £10,000 - must file a return detailing all their payments, loans, receipts and invoices.

The responsible person commits an offence punishable by a fine of up to £5000 if they fail to comply with the law on filing a return.

A person who “knowingly or recklessly makes a false declaration” commits an offence punishable by up to a year in prison.

Stuart Campbell
The responsible person for Wings Over Scotland is Campbell, 47, a former computer games journalist who styles himself as a Reverend but refuses to say for which church or faith. 

For LFI it is Deborah Waters, 42, from Barrhead, the wife of East Renfrewshire SNP councillor Vincent Waters.

Campbell said Wings Over Scotland spent around £75,000 during the referendum on campaigning, including production of the popular Wee Blue Book, but was unable to complete the spending return form as it does not have full invoices and receipts.

Asked about a possible criminal charge, he said: “We've heard nothing from the Electoral Commission since they published details of participants' spending.

“We did everything in our power, both before and after the deadline, to communicate with them and provide evidence to back up the full account of our spending that we submitted, and we continue to do so.

“All of our expenditure is fully verifiable, and we remain willing to verify it to the Commission by any means possible within the laws of science."

Waters could not be contacted.