The UK Tax Gap: deferred tax is just another wheeze to hide the truth

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I noticed another letter in this morning's Guardian:

Polly Toynbee is right to highlight Richard Murphy's report for the TUC, which identified £25bn of tax lost from the exchequer (Fairness is forgotten in a culture of tax avoidance that shames Britain, February 29). A similar study Murphy carried out for RMT found that the privatised rail industry is profiteering on £1.3bn in unpaid tax, and is using a deferred-tax loophole intended to encourage investment to fund massive increases in dividend payouts to shareholders. This tax is unlikely ever to be paid, and is effectively a hidden subsidy that dramatically increases profit levels.

These tax loopholes might be legal, but while rail companies are sitting on their £1.3bn tax-break nest egg the government will be cutting subsidy to the rail industry by almost £1bn over the next five years. These cuts will result in fare increases for passengers and diminish resources available to reduce delays and ease overcrowding on our railways.

Bob Crow
General secretary, RMT

Once again, precisely put.