2011 April » Tax Research UK

Do PWC know no shame?

Apr 172011

Floyd Norris, the chief financial correspondent of The New York Times and The International Herald Tribune, covers the world of finance and economics.

He wrote about a new report on taxes supposedly paid by US corporations for the New York Times on Friday.

It was prepared by PWC using their utterly misleading Total Tax Contribution method which provides no meaningful data but does deliver vast amounts of duff misinformnation for Fox News at considerably greater cost then country-by-country reporting would possibly impose.

He said of it:

These are the largest and most successful companies in the country — the Roundtable says that its members collectively have $6 trillion in revenues and 13 million employees. Is there not one member of the Roundtable that finds it objectionable to present something so blatantly misleading as this study?

He’s right to do so.

This is the accounting profession at its worst – deliberately seeking to pass tax liability from the richest and most able to pay onto the poorest in Amercia and elsewhere.

PWC should be ashamed of themselves. But it seems they are not.

Perhaps it’s average partners remuneration in the UK of well over half a million each that makes them so thick skinned.

Goodbye Accountancy Age

Blogging 1 Response »

Apr 152011

I’ve just had a mail saying:

I’m writing to inform you that we have decided to no longer publish the print edition of Accountancy Age. The final print edition of Accountancy Age will be published on 21^st April. After that, if you are not already, you will be automatically subscribed to the weekly business newsletter and a new Accountancy Age weekly email newsletter.

The decision comes after careful consideration of changing reader and advertiser habits, the growth in use of our website and the burgeoning subscription rates to our emailed newswires.

We will of course continue to publish online at AccountancyAge.com and AccountancyAgeJobs.com, offering the full range of articles and jobs currently found in print, as well as new, specialist digital material. Currently over 120,000 individuals visit AccountancyAge.com each month.

Two thoughts.

First, this is a sign of the times.

Second, they only just beat me in terms of number of visits.

Amazing.

Blogging wins.

Now why would Barclays want to offer this?

Barclays 3 Responses »

Apr 152011

From Shelter Offshore:

A brand new, highly attractive, flexible and potentially tax-free offshore company and bank account package is available in the UAE with business banking through Barclays Bank in Dubai

Read the detail.

Then ask, what’s that all about?

Then wonder about Barclays.

Osborne’s got it all wrong, as Ireland proves time after time

Conservatives, Economics, Ireland 6 Responses »

Apr 152011

As the Telegraph reports:

Moody’s has downgraded Ireland’s debt rating, citing “weaker economic growth prospects” and “uncertainty” created by EU solvency tests.

Ireland’s sovereign debt rating has been reduced two notches to Baa3 with the outlook negative and Moody’s warned harsher austerity measures may be needed.

CommentsIt said the country’s austerity plan is weakening government finances and it may suffer further as a results of interest rate increases by the European Central Bank.Ireland’s sovereign debt rating has been reduced two notches to Baa3 with the outlook negative and Moody’s warned harsher austerity measures may be needed to restore the economy.

There are numerous aspects of this story that are revealing.

First, the ratings agencies, despite being amongst the principle (and unprincipled) architects of the crash, are still consideed important although they are entirely unrepentant and unreformed. Their word still carries clout, and you have to ask why?

Second, as primary cheer leaders for the bond vigilantes it is clear that the rating agencies are entirely unimpressed by austerity measures, cutting, inflicting pain on populations who bore no responsibility for the debt they’re being forced to repay, and for bail outs. Ireland has done everything markets have demanded and that has failed it badly in the eyes of the market. We have to conclude the market is irrational, and rating agencies with it.

Third, given the IMF and EU bail outs, this is a massive slap in the face from the rating agencies for the IMF and EU – they’re saying they don’t believe they’ll stand by the deal.

Fourth, and alternatively, it says the whole narrative put forward by the right is wrong. It clearly has not saved Ireland. It clearly does not impress the markets. That’s a double whammy of failure.

What we need is a policy for growth – that’s what the markets want.

That’s a policy for spending to get people back to work.

With tax raised and benefits saved this is an incredibly cheap thing for governments to do right now. It isn’t when there’s full employment. But that’s just a dream at the moment. So spending our way out of recession is the way forward.

Selectively, of course.

On investment in new transport that’s green (and yes, that does include coaches, which I believe in).

And social housing.

And thermal efficiency.

And schools. And hospitals, Without either being burdened by the curse of PFI.

The private sector has no idea what to do with its money. It’s time for a confident public sector to take the lead and deliver the path to growth through innovative public spending.

Osborne’s got it all wrong in other words.

For a summary, read this.

The power of words

ConDems, Conservatives 1 Response »

Apr 152011

I know this is an advert, but it’s also really thought provoking, so worth sharing:

What is the new narrative we’re seeking?

What form of words tells the ConDems they’re wrong?

And gives people hope?

Floating a company subject to allegations of tax abuse is not good news

Development, Secrecy jurisdictions, Switzerland, Tax avoidance, Tax Havens 2 Responses »

Apr 152011

Glencore is to be floated on the stock exchange. The markets are going wild. Another Swiss recluse brings their shares to the market.

Glencore is, as the Guardian reports, subject to a complaint from five NGOs that have filed a complaint to the Organisation for Economic Co-operation and Development (OECD) against a Glencre subsidiary over allegations that a mine it owns inZambia may not be paying enough tax on its profits.

As the Guardian notes:

The organisations – the Centre for Trade Policy and Development (CTPD), in Zambia; Sherpa, a Paris-based non-profit organisation; Berne Declaration, a Swiss-based NGO; Mining Watch Canada; and L’Entraide Missionaire, also based in Canada – believe the operations of Mopani Copper Mines, in which Glencore has a 73% stake, may be at odds with OECD guidelines for multinational companies.

The complaint has been made to the OECD’s Swiss and Canadian national contact points, based on the findings of an audit report last year by accountants Grant Thornton and consulting firm Econ Pöyry into Mopani, commissioned for the Zambia Revenue Authority. The report, which was leaked, alledgedly identified a series of “problems” in Mopani’s figures related to costs and revenues.

The leaked report first emerged in February. At the time Glencore, which is based in Switzerland, refuted the allegations. In a statement to Christian Aid, a partner of CTPD, it said: “We refute the conclusions of this draft report and we question the reasons for the manner in which it was leaked. This draft report contains factual errors and inaccuracies. It is based on broad and flawed statistical analysis and assumptions.” It repeated its comments when approached by the Guardian on Thursday.

So be it, but the NGOs have a view too:

Savior Mwambwa, executive director of CTPD, said: “For me, the leaked report lends some support to Zambian civil society organisations’ claims that mining companies are depriving us of social and economic benefits which are rightly ours, through tax evasion and avoidance.”

He said he hoped the complaint would “prompt the Zambian government to do a financial audit of all mining companies, so that the Zambia Revenue Authority can update its assessments of the tax they owe. Donor countries such as the UK – which gave Zambia almost £50m in aid last year – should support our government in such an exercise”.

And as Christian Aid added:

David McNair, economic adviser at Christian Aid, said: “We hope that this complaint to the OECD will highlight the huge difficulties developing countries face in determining whether multinational companies are paying the correct amount of tax – and the urgent need for new accounting rules to help deter multinationals from artificially shifting their profits out of those countries.

“It is currently all too easy for companies to use financial secrecy to book their profits where they pay less tax. This is a massive problem for developing countries, which currently lose more to tax dodging by multinationals than they receive in aid.”

Christian Aid is campaigning for more financial transparency around the world and greater support for developing countries in challenging tax arrangements. It is also a member of the End Tax Haven Secrecy campaign, urging G20 to put the issue on the agenda of its meeting in November.

I’m delighted these agencies have made this point at this time.

It’s far too rare that the people of the developing world see the benefit of their natural resources. They seem to end up, far too often, in Switzerland, where Glencore is.

Odd that.

Laughing all the way to the Swiss bank

Banking, Switzerland, Tax evasion Comments Off

Apr 152011

The FT reports:

Julius Baer became the first Swiss private bank to reach a settlement with the German authorities over its potential role in helping rich customers to evade taxation with a one-off €50m ($75m) payment.

The good news they have admitted they knew what they were doing.

The bad news is that there is nothing to stop them carrying on doing it. Swiss banking secrecy is still intact.

And worse, is the fact that the settlement is so small they must be laughing all the way to their own Swiss bank.

The underlying theme: tax evasion is a crime that still pays.

Of course they’re all leaving -which is why they’re expecting to have 11,000 more employees in the City

Banking, Economics Comments Off

Apr 152011

As the FT reports:

More than 11,000 extra staff are forecast to be employed by banks and financial services firms across London over the next three years despite fears about regulation and taxation, reflecting renewed confidence in the capital and the wider economy.

Day in, day out, the joke that banks will leave London is shown to be utter rubbish.

So let’s lay the myth to rest.

Alongside the claim that bond vigilantes have it in for the UK.

And that if non-doms leave the Economy will collapse.

And that low corporation tax rates are essential for growth.

All are bunkum.

A fact that needs to be repeated, often.