2012 January » Tax Research UK

Tax haven UK could hide money laundering in football

Companies House, HMRC, Tax avoidance, Tax evasion 4 Responses »

Jan 312012

European soccer ruling body UEFA is asking U.K. authorities to investigate two so-called letterbox companies that helped Porto (FCP)fund a player transfer.

For Gool Co. and Pearl Design Holding Ltd. provided finance for the two-time European champion to sign Brazilian striker Walter da Silvafor 6.2 million euros ($8.1 million) in 2010, according to Porto’s latest quarterly statement.

As banks ratchet up lending requirements, soccer clubs are seeking alternative ways to raise funds, often in return for a share of a player’s future transfer fee, said Sandalio Gomez, who teaches sports management at IESE business school in Madrid. UEFA officials said this increases the risk of money laundering because it’s unclear who owns the letterbox companies, which have mailing addresses in the U.K. and seemingly nothing else.

“We are urging state authorities to look into it,” UEFA Secretary General Gianni Infantino said. “Because we are a private company, an association, we cannot go to a company when it is a letter box saying ‘please tell us who you are and what you’re doing.’ They will tell us: ‘Who are you to ask me?’”

This is a massive problem facilitated by the UK.

Whilst we in the UK offer limited companies for sale for only a few pounds and utterly neglect the need to then regulate or tax these companies – as I have shown to be the case here – then the UK is undoubtedly losing out heavily to tax evasion as I have suggested (my estimate is £16 billion a year) and may, as UEFA seem to be suggesting, provide opportunities for money laundering.

That’s utterly negligent behaviour by successive UK governments and is all designed to ‘save’ costs for Companies House and H M Revenue & Customs whilst ignoring altogether the tax foregone and the massive cost to the UK of the tax foregone and crime permitted.

If we want responsible business in the UK we start by making sure each and every company files its accounts, delivers a tax return and pays its tax. It’s really not too much to ask. But our government refuses to do it. Why is that?

Move your money

Banking 13 Responses »

Jan 312012

A new campaign has been launched today called Move Your Money.

The logic is simple: if you don’t like the behaviour of the bank you’re with move you money somewhere else.

I am doing just that, and explain why, here (and apologies for quality – made in a hurry!):

If you agree, please move your money.

The Taxcast – a new podcast from the Tax Justice Network

Tax justice, Tax Justice Network Comments Off

Jan 312012

The Tax Justice Network has just launched a new monthly podcast – The TaxCast.

In each 15 minute show, TJN will be discussing the latest news relating to tax evasion, tax avoidance and the shadow banking system.

In the inaugural TaxCast the implications of the Vodafone vs India landmark tax case are discussed (by me), TJN compares Bill Gates and Mitt Romney’s attitudes to taxation whilst TJN visits the Occupy camp outside St Paul’s Cathedral in London.

Podcast: Play in new window | Download

Wilful amnesia

Economics 8 Responses »

Jan 312012

From Paul Krugman, yesterday:

The infuriating thing about this tragedy [of a recession] is that it is completely unnecessary. Half a century ago, any economist — or for that matter any undergraduate who had read Paul Samuelson’s textbook “Economics” — could have told you that austerity in the face of depression was a very bad idea. But policy makers, pundits and, I’m sorry to say, many economists decided, largely for political reasons, to forget what they used to know. And millions of workers are paying the price for their wilful amnesia.

Never doubt that this recession is not necessary: it is a deliberate act that was imposed by the will of right wing politicians and their advisers.

Yesterday those right wing politicians succeeded in imposing yet more austerity on Europe. Things will be getting worse soon.

How to solve Switzerland’s problem in one short blog

Switzerland 1 Response »

Jan 302012

Reuters reported today that:

Switzerland must tackle the problem of untaxed money in secret accounts and also must ensure the central bank does not become a political pawn, the country’s economy minister was quoted as saying on Saturday.

“The problem of untaxed wealth in Switzerland is a serious problem that we need to resolve. Not only with the USA but also with the Europeans,” Economy Minister Johann Schneider-Amman, of the pro-business Free Democrats (FDP) party, told the German-language Tages-Anzeiger in an interview.

“Banking secrecy wasn’t invented to create an opportunity for doing business with untaxed money,” he also said. “We must find a way of dealing with legacy wealth.”

Well actually, that’s exactly why Swiss banking secrecy was created in 1934: it was all about and still is about facilitating tax evasion.

And there is an easy answer: sign up for the European Union Savings Tax Directive and for automatic information exchange.

What’s the problem?

Do as you’re told, don’t say what you think: London 2012

Ethics 12 Responses »

Jan 302012

This was drawn to my attention today by Alex Andreou and I copy this from his blog:

I was interested to see the following announcement in today’s London Evening Standard:

It caught my eye, buried even though it was in the Jobs section. What byelaws, specific to Trafalgar Square and Parliament Square, could our dear Mayor be drafting in such a hurry? So, I had a look. You can find the full text of the byelaws here.

I found that, buried among various rules making it a criminal offence to feed birds or fly kites (yes, you read that right), it contained some astonishing and highly undemocratic rules effectively stifling peaceful protest. No doubt Boris Johnson is thinking of the upcoming Olympics and what an embarrassment it would be to have poor people protesting near tourists. The byelaws make it an offence, inter alia, to

- erect or keep erected any tent or similar structure

- display any sign

- make or give any speech or public address

and astonishingly even

- fail to comply with a reasonable direction given by an authorised person to leave the square.

It is my belief that this is an outrageous and unprecedented attack on our freedom as citizens. The notice explains that any objection to the confirmation of the Byelaws may be made by letter addressed to Carl Schnackenberg, Department for Culture, Media and Sport, 2-4 Cockspur Street, London SW1Y 5DH, or by email to: Carl.Schnackenberg@Culture.gsi.gov.uk.

I have written. Will you spare five minutes to make your sentiments known?

Amazing.

Big Brother is in town.

Who’s benefitted most from the recession in the USA?

Economics 3 Responses »

Jan 302012

This data from the New York Times makes clear who has benefited most and least from the US recession:

So companies have won and paid less tax too.

Workers lost, badly.

And you wonder why people are annoyed?

A fully-formed and fully-argued manifesto for a more stable and more equitable world

Courageous State, Economics Comments Off

Jan 302012

Matt Sissons has reviewed my book The Courageous State on the Why Politics? blog. I won’t reproduce the whole review, and it’s fair to note he does offer some minor criticisms, which he has absolute right to do, before concluding:

What is most evident is that this is a book rammed full of good ideas. Not pie-in-the-sky but pragmatic, realistic solutions; not just to the economic crisis or the inherent unfairness in our society, but to the whole ideology which has led to the current class of wobbly politicians, whose lack of vision and conviction has allowed the dangerous status-quo to continue far longer than it should. It is these ideas, concentrated towards the end of the book, which elevate The Courageous State well above the yet-another-book-about-neoliberalism class of commentary. Murphy presents his solutions with great clarity, as well as clarity of purpose, which enables the reader to see the logical connections between them and for them all to sit together as a cohesive whole.

As a result, the most striking thing about Murphy’s vision, especially amongst the doom and gloom of the austerity agenda, is that it is one of hope; the best kind of hope based on specific, realistic objectives. You won’t find here any suggestions for revolution, simply a change of mind-set which will allow for the many small changes needed to alter the course of our troubled political and economic institutions; to enable them to be forces for the good of the majority rather than a wealthy few. With the current absence amongst national politicians of both hope and a cohesive vision, anyone looking to take up the leadership challenge on the left could do worse than read The Courageous State. If they were to pick it up they would find not just a book, but a fully-formed and fully-argued manifesto for a more stable and more equitable world.

The Courageous State is available here.

In support of HMRC staff striking tomorrow

HMRC 6 Responses »

Jan 302012

Up to 20,000 HMRC staff are expected to strike at some time tomorrow. The reason why they’re doing so is simple: HMRC, in the face of damning criticism of its management, has decided to bring in private contractors at two sites to handle calls from the public about their tax affairs.

Wholly reasonably PCS staff are defending the taxpayer against this privatisation move which means that access to data on peoples’ personal tax affairs will be handed over to private companies without any adequate protection in place.

And quite rightly PCS staff are also defending their jobs. They’re hardly well paid now, but call centre operators are bound to create a profit margin in one of two ways. The first is a lower standard of training, meaning calls will be badly managed, and secondly by cutting pay. The combination is a disaster for the effective management of the UK tax system at a time when w know it has been badly managed and when we know the tax gap might be £120 billion a year.

The result is that I support the PCS workers striking tomorrow. It is they who are upholding the standards of public service in this country and the duty of the state to manage its tax system properly without risking the passing of data into the private sector. It’s the management of HMRC who know little of tax and who think they’re running a corporate entity who are failing the British public yet again. And I suspect any sensible person can see that.