Britain's Shadow Tax System revealed: savage new report
The report makes for horrifying reading, and will serve as a case study. We'll paste just the first few paragraphs of this report: unfortunately it's subscription-only so you will probably have to get hold of a hard copy to read it.
The [UK government] coalition’s frequent claim to be clamping down on corporate tax avoidance is a sham, an undercover investigation by Private Eye and the BBC’s Panorama reveals.One telephone conversation gets a UK tax adviser to explain how it might be possible to end up with a negative 15 percent tax rate. In summarising one part, it notes:
The Treasury, HM Revenue & Customs and Britain’s biggest accountancy firms all connive to allow the biggest companies and richest individuals to deny the UK exchequer billions, while undermining the global fight against tax dodging too.
Our investigation reveals that Britain operates a shadow tax system thanks to a clique of ministers, officials, select multinationals and accountancy firms – the largest of whom, PwC, appeared to misrepresent its own activities to parliament. Only two groups are not supposed to know about this – the public and their MPs. But now they can.
"In return for no investment at all in Britain, in other words, British companies can artificially wipe out their UK tax bills."Britain's greatest hope for repealing its shameful tax havenry ought to be the opposition Labour Party. But they may be as bad as the ruling coalition:
"Nobody in parliament had probed the big tax giveaway when it was enacted (despite [Private] Eye’s warnings in 2010), partly because of shadow chancellor Ed Balls’ continued obeisance, even post-financial crisis, to big business and partly because in the conveniently arcane world of tax the Labour opposition relies for its tax advice, including briefings for parliamentary debates, on... PwC!And, of course, this:
"If tax avoidance is defined as scheming to defeat the intention of the law, the biggest companies rarely need to indulge in it now because their fixers in Britain’s main accountancy firms can shape the law to suit their tax reduction demands."Country Capture and the Finance Curse, anyone?
A parting shot:
"The world’s sixth largest economy is thus now also its largest tax haven."Indeed, and although to be fair there are many different ways of measuring this, we have often come to the same conclusion.
There is lots, lots more in the article. One for the record. Now read on.
For those who don't have access to this article, they still have three options. First, go and buy a copy. Second, take a look at the accompanying, and also hard-hitting accompanying BBC Panorama programme, now available online. Third, for an examination of much of this in far greater detail, read Brook's recent book The Great Tax Robbery.