Thursday, March 31, 2011

Don’t be fooled by WPP’s return to the UK

We had hoped to dedicate some time to discussing an article with a similar headline from the Progressive Tax Blog, but time has run out for the time being. Instead, we will merely point to the original article (which is a little technical for the non-expert, but worth the effort), and a follow-up from Accountancy Age, reaching similar conclusions.

It comes in the context of what George Monbiot described as the corporate tax Heist of the Century; Richard Brooks' recent submission to the UK Treasury Select Committee on the same subject, and this follow-up from Richard Murphy discussing how in the Finance Bill it has panned out even worse than had originally been feared.

In short, the blog notes that

George Osborne [UK Chancellor, or Finance Minister] is already hailing this is a vindication of his policies, and talks of the ‘tax base’ of WPP returning to the UK.

The Progressive Tax Blog exposes this claim as nonsense: the move will have little impact on tax or employment in the UK. And when it does return and tax kicks in, the tax payable on offshore financing profits will be so low (5.75%) that it will probably pay no UK corporation tax when combined with interest deductions in the UK.

The Progressive Tax blog concludes:

"The amazing thing is that in order to claim the PR for WPP’s return, George Osborne has relaxed the rules even further than previous proposals (already favourable) meaning that every other UK multinational that had no intention of leaving the UK is ecstatic. Given that WPP’s return will not increase employment or corporate tax take in the UK, why has George Osborne waived through the death of UK corporation tax for multinationals?

Or, as Accountancy Age puts it:

The chancellor is paying a lot of money for very good PR.

This is important, important stuff. The current British government is taking an axe to corporation taxes, at a time of stunning deficits and savage cuts. UK Uncut needs to keep returning to the streets, and continuing to mobilise people on this. It is, quite simply, horrifying what is being done.

We're sorry we can't, for now, give this the full overview treatment it deserves. We hope to return to it before too long.


Anonymous Bill Kruse said...

Were I a conspiracy theorist, I might suggest that the very wealthy are improving their chances of surviving the social upheaval following the next financial blowup by diverting resources from the poor and middle classes to themselves. That's IF I were a conspiracy theorist, which I'm not. I've got my food stores and my water supply sorted out all the same though....

1:07 pm  

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