Britain's Prime Minister, tax avoidance, and linguistic bifurcation
good exploration of this policy of doing one thing, then saying another.
This is the man who has declared of large companies avoiding tax:
"It’s simply not fair and not right what some of them are doing by saying, I’ve got lots of sales here in the UK but I’m going to pay a sort of royalty fee to another company that I own in another country that has some special tax dispensation."Spot on David. It’s not right. And the “it’s legal so it’s OK” defence does not work: you’re also right on that.
The trouble is that over then time you’ve been in office you’ve:
1) Cut the large company corproation tax rate from 28% to 21%, although without any apparent gain for the UK.
2) Introduced a new law that gives companies a 5.25% tax rate on their treasury function profits but only if they will move them out of the UK and to a tax haven;
3) Encouraged the new patent box rules that might cost the UK £1 billion in lost tax revenue.
4) Changed controlled foreign company rules that mean that 95% of all tax haven subsidiaries of UK companies will now be beyond scrutiny, so encouraging UK companies to shift their profits out of the UK.
5) Introduced a territorial tax base for the UK that means all profits earned out of the UK are now beyond the reach of the UK tax authorities – encouraging offshoring and the shifting of assets out of the UK.
To put it another way – all the things Cameron criticises companies for doing are being explicitly encouraged by this government.