2009 May » Tax Research UK

MP’s expenses

May 142009

I was in the environs of Westminster last evening. I had to leave the event I was at early: if I’d stayed after 9.45 I could not have caught the last train home. And as I did not wish to stay in London overnight that was the end of the matter: leave I did.

Why mention it? Because it shows that if we want MP’s to work late (and we do, it seems – and they do so, as a matter of fact, then second homes are necessary even for those who live 90 miles from London. Indeed, that will be true for those who live somewhat closer too.

So what’s to be done? I’ve discussed the issue with a number of quite well informed people. It seems to me that the solution is simple:

1) Rather as the Church of England provides its ministers with suitable housing so should parliament provide those MPs who need it with suitable housing. It’s not flashy housing. This is work related accommodation. It should not discriminate but is something bigger than a sensible modern 4 bedroom house with a study ever going to be necessary? These are beyond most people’s reach, but within reasonable expectation. If the MP wants something else then they are offered the rent that should a property would cost to secure in their constituency. The property is provided with basic furniture, council tax and equipment servicing paid. After that it’s the MP’s cost.

2) Travel is covered by a free rail and bus pass. Car mileage is strictly on the basis of proven need for the journey and on a mileage basis at HMRC approved rates.

3) Staff are centrally employed with proper recruitment procedures, although the MP must clearly pay a part. these staff are allowed a political role despite being civil servants.

4) An office is provided at Westminster. A constituency office is paid for. All costs must be receipted for payment. A limit ion spending must be set. Research spending is allowed, but evidence as to the issues to which it relates must be supplied.

5) Meals are allowed only when HMRC would do so for employed staff, and at their approved rates.

6) All other expenses must be ‚Äòwholly, exclusively and necessarily’ incurred, be receipted and be subject to proper checking before payment.

I really cannot see what the problem is.

MPs who can’t agree should get out of politics. It’s not meant to be a sinecure. It’s a vocation. We need more who have that vocation in Westminster.

Anyone can set up a Panama corporation

Secrecy jurisdictions, Tax Havens 3 Responses »

May 142009

Public Citizen in the USA did a little experiment. They asked an intern to set up a Panama corporation. And they filmed her doing it:

I have no doubt the film is genuine.

Then note who promotes these things: the American Right.

When we say those from the right wing are challenging the very foundation of democratic society and the rule of law when promoting the use of tax havens, that’s no exaggeration. That’s exactly what they’re doing.

Lessons not being learned

Economics 2 Responses »

May 132009

The government has published “UK international financial services – the future: A report from UK based financial services leaders to the Government”

I guess this is one of those perfect cases of ask the wrong people the wrong question and you’ll get the answer you want, and as such I don’t analyse it in much detail.

Suffice to say this. First, it assumes that tax competition is good. It says on tax:

The industry supports that approach ‚Ä¶. and hopes that the continuation of this constructive process [of interaction with government] can help develop some longterm principles that will underpin the industry’s goals of achieving a competitive, transparent and modern UK tax system over the next 10 to 15 years.

Competitive for whom, might I ask? And what does transparency mean, I wonder? Certainly there’s no mention of country-by-country reporting with the implicit requirement of UIK tax disclosure being made.

Second, I note that whilst Michael Foot argues in his report that tax havens/ secrecy jurisdictions such as the Crown Dependencies are crucial to the UK finance sector the issue is virtually entirely ignored here. I wonder why? Is there a selective blind eye being turned to this activity?

Third, the report notes that ‚Äòliberalised finance’ is a strength to the UK. Excuse me? What? Have you noticed the harm it has done?

Lessons are clearly not being learned.

Very worrying indeed.

Think about the costs of regulation

Conservatives, Ethics 5 Responses »

May 132009

Sir David Arculus, a former chairman of the Better Regulation Task Force and author of The Arculus Review: Enabling Enterprise, Encouraging Responsibility which will be published this week as advice on policy to the Conservative party asks for the freedom to abuse, drive the economy to the wall, permit monopolies and exploit labour and the environemnt.

OK, I’m reading just a little between the lines. But it isn’t hard to make out the real message.

And for everyone but Sir David it spells bad news becasue it’s got one simple pre-text: let’s make the rich richer at the expense of everyone else.

Imaginative MP expenses are not that different from tax avoidance |

Corruption, Ethics, Secrecy jurisdictions, Tax avoidance, Tax Havens 22 Responses »

May 132009

I see I‘m not the only person to have noticed this: Nigel Stanley at the TUC has done so as well.

As Nigel says:

Almost every MP has defended what they have done by saying it is within the rules. This is what every company or individual accused of tax avoidance does. Remember tax avoidance is getting round tax law, while tax evasion is breaking tax law.

This is all part of a wider cultural change caused by the great growth of inequality under the Conservatives and Labour’s failure to do much about it, despite some admirable if limited moves on poverty.

I note some disagree though: many comments on my Guardian blog say things like:

The big difference is that people who use tax havens and practise tax avoidance are preserving their own money, whereas the MPs are taking someone else’s money. I would say that the two ‘offences’ are not morally equivalent and that of the MPs is much more serious.

I readily admit I don’t get that argument at all. Anyone who avoids paying tax by getting round rules reduces the sum available to the public purse. I can see no difference at all in the offences: both plunder the public purse for private gain.

I quote David Cameron:

Politicians have done things that are unethical and wrong. I don’t care if they were within the rules – they were wrong.

Precisely. Exactly the same (and I mean, exactly the same) can be said of tax avoidance.

Tax avoiders should also be writing out cheques. The moral argument is clear: it’s equally clear people believe in it.

Now let’s get rid of tax haven / secrecy jurisdiction abuse as well.

Liberia: Capital Flight – Millions Out, Less in

Africa, Development Comments Off

May 132009

allAfrica.com: Liberia: Capital Flight – Millions Out, Less in (Page 1 of 1).

The reality of illicit financial flows documented in Liberia in 2008.

And make no pretence about it: tax havens play a part in this process of denying developing countries the funds they need to finance their domestic economies.

Africa’s missing billions

Country-by-country, Development, G20, Tax evasion, Tax Havens Comments Off

May 132009

Africa’s missing billions | The Argument.

For Africa, the era of banking secrecy is far from over argues Khadija Sharife writing in Foreign Policy.

As she notes:

The G-20′s London summit, which saw British Prime Minister Gordon Brown boldly declare, “The era of banking secrecy is over,” was a good start. But G-20 leaders, focused on tax evasion in their countries, failed to notice that the developing world loses an estimated $385 billion to tax abuse annually. They failed to call for country-by-country reporting or mandatory automatic exchanges of information about where corporate profits are going. Nor were there any calls to recover and return the estimated $11.5 trillion currently stashed in tax havens dotting the globe. Instead, the G-20 countries proposed bilateral tax arrangements related to “suspected” tax evasion, and this, on “request” only. Good luck getting complicit African governments to turn on their multinational partners.

Precisely.

Iceland – a country of proud, indebted people

Tax Havens Comments Off

May 132009

Debtonation ¬ª Blog Archive ¬ª Iceland – a country of proud, indebted people.

My Green New Deal colleague Ann Pettifor has been to Iceland. Her blog on the consequences of that country becoming a bank-owned -state is well worth reding.

There are, of course, plenty of other bank-owned-staes around. Take Jersey, Guernsey, the Isle of man, Cayman, Bermuda, Bahamas for starters.

They should take special note.

So should the UK. We play the role of the IMF with regard to most of these places.