Exclusive: North East firm Muckle cuts its tax bill
22 February 2013
Newcastle firm Muckle has set up a new business structure, which is typically associated with a tax reduction scheme, whilst trumpeting its commitment to corporate social responsibility.
And to be fair, Muckle does takes CSR seriously. Since 2002 the firm has put 1% of partnership profits into a charitable trust
to help the local community, and it also runs mentor schemes and various other projects. Muckle's website
refers to its commitment to "making a very positive contribution to the broader North East Community
". And Senior Partner Hugh Welch recently told NE Business
of his passionate desire to "make a fairer society
" adding "when you are as fortunate as I have been, it is incumbent on you to do what you can to help others
". He explained that despite the huge need in the North East, he couldn't shy away from the task: "If everyone did that we’d never get anywhere
But the firm's commitment to the community doesn't seem to stretch to paying full whack tax. In 2010 it set up Muckle Services Limited into which it
transferred all non-partner staff in order, it seems, to cut the firm's tax bills.
||Hector the unhappy tax inspector yesterday |
These structures aren't unusual as around a third of the top 100 law firms are believed to have adopted them, and Muckle claims that the reduced tax bill allowed it to weather the economic storm. But the firm has seen double digit revenue hikes for the last couple of years and profits stand at a healthy £336,000 per partner. So while it cuts its tax bills, its partners can upgrade their Porsches. If everyone did that, we'd never get anywhere.
A spokesman for the firm said that this was "a fair point
", but "if the general perception is that this firm is hypocritical in its approach to CSR then that would be a real concern to us. We try hard properly to balance profitability with community contribution and continued investment in this business...we believe in what we are doing and our proud of our CSR record