The Secret Olympic Corporate Tax Haven Exposed

Written by Watt Tyler

Photos and captions by Watt Tyler

The £625million Olympic Stadium virtually given away to West Ham United Football Club.

The £625million Olympic Stadium virtually given away to West Ham United Football Club.Another dodgy deal at our expense?

Along with many other British people I watched the London 2012 Olympic Games on television – I didn’t have the time, money or inclination to travel to London so would have had a very similar experience if it had been held in Paris. Except we wouldn’t have spent £10 to £12 billion hosting it if it had been held in Paris – about £150 to £200 for every man woman and child in Britain. Anyway these huge Games must surely have generated some tax revenue? Well apparently not.

Corporate And Personal Tax Avoidance Agreements Are Now Part Of Bidding For The Olympic Games.

No tax was paid on ANY earnings related to the Olympic Games. How was this possible in a country like the UK, you might ask, where you pay your taxes? The reality is that setting up tax avoidance legislation has now become a major criteria for hosting international competitions such as the Olympics – no tax free deal means no point even bidding.

Mo Farah didn't pay any UK taxes in 2012 - did you?

Mo Farah didn’t pay any UK taxes in 2012 – did you?

Big name athletes such as Mo Farah, and the organisers, have applied pressure to potential host nations to ensure that winnings, and profits, are not taxed.

In July and August in 2012 Stratford,  London, became a temporary tax haven. Millions of pounds were channelled through foreign subsidiary companies operating in the area before it left these shores for the bank accounts of  shareholders across the World.

Logo of the 2012 zionist games.

Logo of the 2012 zionist games.

Zero Tax Or We’ll Go Elsewhere!

Without a zero tax deal the IOC would simply take their zionist roadshow elsewhere. The new zero tax rules ushered in as part of the winning Team GB bid included ‘a temporary exemption from UK Corporation Tax and UK Income Tax for certain non-resident companies’.

The tax legislation was written to include corporate partner organisations such as McDonald’s and Visa. McDonald’s had a near monopoly on selling food and Visa did have a total monopoly on all venues and ticket payment methods – earning them both a tax free fortune.

I'd be lovin' it if I paid no tax on earnings.

I’d be lovin’ it if I paid no tax on my earnings.

The HMRC said “For the purpose of this exemption a London 2012 Partner is an organisation that is supplying services to LOCOG in return for the right to market and advertise themselves or their products for commercial purposes by reference to their association with the Games. It includes a company connected with the Commercial Delivery Partner.”

Thousands of foreign Nationals were exempt from taxation, from competitors to media workers ( journalists, technicians and producers) to members of official Games bodies and other officials (including judges and referees) along with all the athletes.

So We Got Ripped Off As Usual By The Corporations?

Many of the corporate sponsors are no strangers to the more traditional tax havens. The table below shows the London Olympic partner companies and the subsidiaries they have set up in tax havens. British Airways appeared not to have subsidiaries in any tax havens.

So How Much Money Is Involved?

Currently the IOC is projected to make £2.7 billion from the London Olympics and the total amount of lost UK tax revenues is estimated to be over £600 million.

The International Olympic Committee (IOC) is based in Switzerland and enjoys very low tax rates there. Also it is totally exempt from paying any tax in the UK on earnings from the London Games.

LOCOG itself (the London Organising Committee of the Olympic and Paralympic Games) is also exempt from all taxation.

LOCOG is chaired by Paul Deighton, a former Chief Executive of Goldman Sachs.  LOCOG itself is also using employee benefit trusts, often registered in tax havens, to pay staff bonuses.

With the amount that LOCOG would have been liable for, the total tax revenue lost is approx. £700 million. Add to that the potential tax income lost from the profits of corporate partners.

Lost Tax Revenue

So, despite using London’s public roads and other infrastructure, paid for by British taxpayers, those financially profiting from the games and working at them were exempt from all UK tax.

The credit rating agency Moody’s, has said that “Overall, we think the Games are unlikely to provide a substantial macro-economic boost to the UK during 2012. However, a number of individual sectors and creditors [banks] look well placed to benefit from the short-term fillip that the Games should provide.” Their report concludes that those who will benefit most financially from the games are the corporate sponsors.

This brinkmanship tactic of ‘make it tax free or we’ll take our business elsewhere’ has long been used by the financial elites in tax havens. It is now being extended to countries with usually strong democratic legislators via major sporting events from the FIFA World Cup to the London Olympics. Some of the laws have already been extended to cover the Commonwealth Games in Glasgow in 2014, and this process of relaxing tax rules looks set to continue with costs borne, as ever, by tax payers.

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West Ham United’s New £625million Council House

Report by Cigpapers

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£600million Olympic Stadium in East London

In March 2013 London Mayor Boris Johnston signed off the Olympic Stadium to West Ham United Football Club on a 99year lease. The Olympic Stadium had been seen as a political humiliation and “white elephant” with no real practical use.
The terms for the lease of the £600million Olympic Stadium are a down payment by West Ham of £15million plus £2million per year for 99 years. In return the Government/taxpayer will hand over the £600million stadium plus £25million in cash for an upgrade.
However the deal is structured in such a way that the estimated £40million upgrade is paid first with the Government’s £25million and then by West Ham’s £15million. If West Ham spend £25million or less on the upgrade they will pay nothing. It is interesting that there are claims that the £40million upgrade estimate was provided by West Ham themselves. The yearly payments part of the contract are also quite interesting and mean in certain circumstances West Ham may pay no or very little rent.
West Ham will be free to sell or rent out their present ground Upton Park and keep all the proceeds.

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Upton Park

West Ham are co-owned by David Gold and David Sullivan who made their fortunes in pornography. Karen Brady the vice-chairman of West Ham stated “ We accept the cost of making this into a world-class stadium has come from the Government, but we hope over 99 years we can pay it back.”
There are obviously all sorts of allegations flying around about this deal, and Leyton Orient Football Club have launched a legal challenge. Ironically Leyton Orient may eventually buy or rent Upton Park from West  Ham and this legal challenge could just be about getting some leverage on that deal.
As usual Joe Public will pick up the tab for this fiasco/fraud.

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West Ham’s New Ground