As imposed cuts bite harder and newly announced ones line up to diminish funding of public services and assets further, politicians on all sides are clamouring to score points in the taxation debate. 
With skillful spin, expressing outrage and injustice, calls for wealth, tycoon and mansion taxes are argued for and against. Arguments though prejudicial they are convince many yet serve to reaffirm only one fact. Political cowardice is as rife in this government as it was in the last when it comes to addressing taxation. Two points. First, it is reasonable to expect that everyone liable for tax, individual or company, pays their fair share, no more no less. Secondly, through taxation, we the electorate charge our government with responsible stewardship of a range of public services and infrastructure that are integral to a stable, inclusive and caring society. Politicians of the major parties purposely muddy the waters arousing envy across society, creating a smokescreen for the real issue, corporate tax evasion. According to the taxman, HMRC, annual corporate tax evasion costs our country £70bn. Employing armies of accountants and lawyers, corporations use offshore tax havens to hide vast profits and evade taxes due to the Exchequer. A practice the coalition showed, in this budget, it encourages, appeasing corporate greed whilst simultaneously betraying the British people and its hard won public services.
The politicians won't challenge them. Why ?, because they say, corporations provide jobs, stability and wealth! Really?, consider Arcadia, owners of Topshop and Boots among others. Last autumn they announced plans to shed upto 3,000 jobs over the next 2 years. Why, explained Arcadia's head Sir Philip Green, a legendary tax dodger in his own right, because profits were down to just £132m and shareholders demand profit. So, his organization's contribution to our economic recovery is to sack the very people who earnt him that profit. That's upto 3,000 people not paying tax and many of whom will need a period of welfare support to which the government's corporate chums will contribute little or nothing whatsoever.
The financial services sector, unsurprisingly, opposes imposition of the "Robin Hood" or Financial Transaction Tax, irrespective of the fact that they can easily afford it and bear a considerable responsibility for our current difficulties. Mr Cameron, in true "world leader" fashion, supports their resistance arguing that even if Europe were to implement the tax the rest of the world would not. The coalition argues that the financial sector would desert the city though that is questionable. Whilst the financial services sector contributes between £20-25bn pa in taxes, we the British taxpayer in turn, by underwriting loans for the banks, effectively provides an annual subsidy of around £100bn. They used to call us a nation of shopkeepers, perhaps it's time we called their bluff and became a nation of small businesses once again.
I am always staggered by the comment that to tackle the issue of unpaid corporation tax could harm British interests. We know that many firms such as Boots have moved their HQ abroad as a means to avoid the higher corporation tax rates that they would otherwise have to pay in the UK. This means that the profits they make from trading in this country earn us little or no tax revenue.
ReplyDeleteWhy is that the Govt cannot pass legislation to force all foreign based companies operating in this country to disaggregate their accounts and to pay corporation tax on their UK account? In this way we would avoid any question of tax competition with other countries. It is clearly profitable to trade in this country otherwise they wouldn't be doing it. Therefore the question of their going elsewhere does not arise.
Nick
Editor
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