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give it some protection legally； but registration makes it much simpler for
the owners to have recourse against any person who infringes the mark。
Names
Business and domain names involve a cross…section of IP issues。 A good
name； in effect； can bee a one… or two…word summary of your marketing
strategy； Body Shop； Toys ‘R’ Us； Kwik…Fit Exhausts are good examples。
Many panies add a slogan to explain to customers and employees alike
Business Law 189
‘how they do it’。 Cobra Beer’s slogan ‘Unusual thing； excellence’ focuses
a。。ention on quality and distinctiveness。 The name； slogan and logo bine
to be the most visible tip of the iceberg in a corporate munications effort
and as such need a special effort to protect。
Business name
When you choose a business name； you are also choosing an identity； so it
should reflect：
。 who you are；
。 what you do；
。 how you do it。
Given all the marketing investment you will make in your pany
name； you should check with a trademark agent whether you can protect
your chosen name （descriptive words； surnames and place names are not
normally allowed except a。。er long use）。 Also； check if the name is one of
the 90 or ‘controlled’ names such as bank； royal or international for which
special permission is needed。 Limited panies have to submit their
choice of name to the panies Registration Office along with the other
documents required for registration。 It will be accepted unless there is
another pany with that name on the register or the Registrar considers
the name to be obscene； offensive or illegal。
Registering domains
Internet presence requires a domain name； ideally one that captures the
essence of your business neatly so that you will e up readily on search
engines and is as close as possible to your business name。 Once a business
name is registered as a trademark （see earlier in this chapter）； you may （as
current case law develops） be able to prevent another business from using
it as a domain name on the internet。
Registering a domain name is simple； but as hundreds of domain names
are registered every day and you must choose a name that has not already
been registered； you need to have a selection of domain names to hand in
case your first choice is unavailable。 These need only be slight variations；
for example Cobra Beer could have been listed as Cobra…Beer； CobraBeer
or even Cobra Indian Beer； if the original name was not available。 These
would all have been more or less equally effective in terms of search engine
visibility。
190 The Thirty…Day MBA
Help and advice on intellectual property
matters
。 UK Intellectual Property Office （ipo。gov。uk） has all the information
needed to patent； trademark； copyright or register a design。
。 International intellectual property information at： European Patent
Office （epo）； US Patent and Trade Mark Office （uspto。
gov） and the World Intellectual Property Association （wipo。int）。
。 The Chartered Institute of Patents and A。。orneys （cipa。uk）
and the Institute of Trade Mark A。。orneys （itma。uk）； despite
their specialized…sounding names； can help with every aspect of IP；
including finding you a local adviser。
。 The British Library （bl。uk 》 Collections 》 Patents； trade marks
& designs 》 Key patent databases） links to free databases for patent
searching to see if someone else has registered your innovation。 The
library is willing to offer limited advice to enquirers。
。 Business Link （businesslink。gov。uk 》 IT & e…merce 》 Emerce
》 Web hosting options） has prehensive up…to…date information
on choosing a domain name and registering and protecting
that name。
。 Guidance Notes entitled ‘Choosing a pany Name’ are available
from panies House （wwwpanieshouse。gov。uk 》 Guidance
Booklets）。
PRINCIPLES OF TAXATION
Tax in its various forms can account for up to half of a business’s turnover。
Taxes constitute the largest single creditor； the most likely event to cause a
business to fold and ranks first in the pecking order when it es to the
disposal of assets in such an event。 These two judgments against the Inland
Revenue missioner gave the spur to the ‘inventive’ approach taken to
the subject of tax by many businesses and their accountants：
。 Lord Tomkin – IRC v Duke of Westminster （1936）： ‘Every man is
entitled if he can to order his affairs so as that the tax a。。aching under
the appropriate Acts is less than it otherwise would be。 If he succeeds in
ordering them so as to secure the result； then； however unappreciative
the missioners of Inland Revenue or his fellow taxpayer may be of
his ingenuity； he cannot be pelled to pay an increased tax。’
。 Lord Clyde – Ayrshire Pullman Motor Services and Ritchie v IRC
（1929）： ‘No man in this country is under the smallest obligation； moral
or other； so to arrange his legal relations to his business or his property
as to enable the Inland Revenue to put the largest possible shovel into
his stores。’
Business Law 191
For business people the justification for tax minimization is overwhelming。
No other activity can enhance net profits so dramatically。 Every pound in
tax saved drops straight to the bo。。om line。
Tax evasion； avoidance and mitigation
The opportunities are endless； from the seemingly prudent – Marks &
Spencer seeking to obtain group tax relief in respect of losses incurred by
certain European subsidiary panies in Belgium； France and Germany
– to the plain criminal – stuffing the business with false invoices。 （China
has the dubious distinction of being the world capital of false invoicing。
In 2007/8 police there investigated 3；511 cases involving issuing false or
tax…offse。。ing invoices； arrested 2；979 suspects； confiscated 10；510；000 fake
invoices； smashed 101 illegal invoice…printing operations and retrieved 9。2
billion yuan （￡640 million） in under…declared taxes。）
The challenge for directors and managers is to recognize the distinction
between different types of behaviour when it es to tax law：
。 Tax fraud； o。。en called tax evasion to so。。en the underlying meaning：
This involves the intentional behaviour or actual knowledge of the
wrongdoing； for example reducing the tax burden by underreporting
ine； overstating deductions； or using illegal tax shelters； this is a
criminal ma。。er。
。 Tax mitigation involves the taxpayer taking advantage of a fiscally
a。。ractive option afforded to him by the tax legislation and ‘genuinely
suffers the economic consequences that Parliament intended to be
suffered by those taking advantage of the option’； as one Law Lord summed
the subject up。 So； for example； if a business is allowed to offset the
cost of an asset against tax； then so long as it actually buys the asset it is
mitigating its tax position。
。 Tax avoidance lies in the blurred line between tax mitigation and tax
fraud and is usually defined by the test of whether your dominant
purpose – or your sole purpose – was to reduce or eliminate tax
liability。
Tax types
As a business you are responsible for paying a number of taxes and other
dues to the government of the day； both on your own behalf and for any
employees you may have as well as being an unpaid tax collector required
to account for end consumers’ expenditure。
There are penalties for misdemeanours and you are required to keep
your accounts for six years so that at any point； should tax authorities
192 The Thirty…Day MBA
bee suspicious； they can dig into the past even a。。er they have agreed
your figures。 In the case of suspected fraud there is no limit to how far back
the digging can go。
Corporation tax
panies pay tax on their profits at varying rates dependent on their
size and the amount of profit made。 Small panies； described as those
making less than around ￡300；000 a year in profits； currently pay tax at 20
per cent。 The rest pay at 28 per cent。 Both these tax rates and the break point
can be adjusted each year in the Budget。 The current rates are published
on the HM Revenue and Customs website （hmrc。gov。uk/rates/corp。
htm）。 Corporation tax in many other countries is much lower。 Bulgaria； for
example； at the time of writing charges 10 per cent； the lowest in the EU。
Corporation tax covers the profit made in an accounting period； usually
of one…year duration but can be shorter under special circumstances； but
never longer。 panies are responsible for working out their own tax
liability； paying the tax due and filing their tax return no later than 12
months a。。er the end of the accounting period。
Capital allowances
The purchase of capital items such as plant； machinery and equipment；
buildings and any such long…term assets is treated for tax purposes in a
particular manner。 In the profit and loss account these costs are usually
shown as an item of depreciation spread over the working life of the asset（s）
concerned。 For tax purposes； however； depreciation is not an allowable
expense； rather； it is replaced with a ‘writing…down allowance’； the amount
of which varies according to the policies favoured by the government of
the day。
At the time of writing； businesses of any size