There is a new Early Day Motion on tax avoidance in the House of Commons, tabled by Michael Meacher MP. It says:
TAX AVOIDANCE
Organisation: House of Commons - Commons Early Day Motions
Source: House of Commons - Commons Early Day Motions
Date: 23.10.12
Mr Michael Meacher
That this House notes the increasing ease with which multi-national corporations are shifting substantial profits from high tax to low tax jurisdictions, even to the point of eliminating their tax liabilities in countries where they make huge sales, as instanced by Starbucks which has not paid any tax on its £1.2 billion UK sales in the last three periods for which accounts are available; and calls on the Government to investigate systematically and in depth all such companies known to use such artificial devices to reduce tax liabilities as charging royalties and excessive interest rates on intra-group transactions or grossly inflating prices on internally-traded products to exaggerate allowable costs against tax, and to grant HM Revenue and Customs powers to declare null and void any such transactions which have no genuine economic purpose but are simply designed to avoid tax, to increase the number of tax inspectors whose revenue-increasing capacity has been shown to be far above their own salary, and to seek international agreement to revise the OECD rules on taxation of multi-national companies trading so as to eliminate loopholes and strengthen enforcement.
(599)
Sir Peter Bottomley
Mr Dennis Skinner
Mrs Linda Riordan
Kelvin Hopkins
Mark Durkan
I haven't spoken to Michael on this one, but it looks like we are very much on a wave length, as we often are on this issue.
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Sir Peter Bottomley. a Conservative! Encouraging!
I wonder if the Government would be willing to put up with the embarrassment of voting this down. I wrote to my MP on Mr. Meacher’s previous bill and she replied that she agreed with it but there was no chance of it getting past the Government, which unfortunately is pretty accurate. Maybe a resolution like this has more chance.
Peter Bottomley’s signature on the EDM is heartening – if only as a sign that there is still some intelligent life within the Conservative Party and that it is still possible to be a Tory and believe in a measure of fairness when it comes to sharing around the tax burden.
Excellent. Suggest an annual cap on the amount of allowable interest any company can claim agaist tax, designed to allow funding of business development and working capital requirements but not artificially reduce tax liabilities. Royalties to be subject corporation tax. Advertising to be disallowed as a business expense. Time to tame these multi-national leeches and allow responsible and sustainable businesses to flourish.
I agree with much of that
there effectively is already a cap on interest deductions via the thin cap and transfer pricing rules – a loan from Barcalys means that barclays are paying tax on the interest income (or at least theoretically they should be !)
Royalties are subject to corporation tax if a company receives them
Im not sure what you have against advertising !?! seems a strange one given its probably one of the more legitimate business expenses
Royalties are not taxed in tax havens
Advertising is the one industry dedicated to creating dissatisfaction
Reading this I was struck that really what you need is a campaign to remove the clauses in double taxation treaties that reduce tax on payment of interest and royalties.
Time has come to stop all these aggressive tax structures.
The royalty and excessive interest captive companies in the EEC or outside the EEC must be obliged to show real substance in their respective domiciliating country.
The best measure will be that the paying corporation must prove the economical reality of these payments, or these can outflows should be submitted to a withholding tax of at least 25% to be still accepted as tax deductible.
Most of these companies are ghost companies, only incorporated by in order to avoid taxation.
Politics must decide to tax these avoidance schemes rather then the humble worker or employee who has absolutely no means to reduce their tax bills.
[…] And, if you want to do more than one thing, get your MP to sign the Early Day Motion to investigate tax avoidance in the House of […]