When will HMRC stop digging the hole and do the job it’s meant to do?

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Private Eye has been digging into the affairs of multinational corporations again. And what it's now dug up is quite a shocker. We will let the article speak for itself:

Three years ago parliament’s public accounts committee was critical of the taxman’s failure to extract penalties from tax dodging multinationals after learning that it penalised companies dealt with by it large business service “in only 19 cases, totalling £15 million”. This was around 0.6% of under-declared tax and HMRC promised to try harder in future.

Figures obtained by the Eye under freedom of information laws show the position is now dramatically worse. In 2009/10 just 6 penalties were charged totaling £442,000 or less; and as this financial year draws to a close “fewer than five” penalties have been charged for just £322,000. These figures represent less than 0.01% of tax under-declared. The rate for smaller businesses is about two hundred times this figure.

Treasury select committee chairman Andrew Tyrie said last week that HMRC was "close to being a failing institution" in light of other cock-ups. When it comes to taxing big business, it's already there."

This is, quite frankly absolutely pathetic. And this, let's not forget, follows news of proposals for what one commentator rightly called "the biggest and crudest corporate tax cut in living memory" for the UK.

Oh, and there is more in the latest edition of the Eye. We hope they don't mind us quoting them at length again: there is a huge public interest issue at stake here:


"On his now infamous trip to a meaningless three day conference in Mumbai in December, HMRC tax boss Dave Hartnett stopped off in New Delhi to meet senior Indian Treasury and Revenue officials. One purpose, the Eye understands, was to lobby on behalf of Vodafone over a disputed £1.6bn tax bill that has no bearing on the company’s UK tax position.

So since HMRC has no stake in the matter, why was the tax boss lobbying? HMRC claimed that laws covering the confidentiality of its “functions” prevent it commenting, proving that it considers lobbying abroad for the same big companies who back home are given sweetheart tax deals (Eyes passim), to be a part of its job.

The Foreign Office, meanwhile, has intervened on behalf of Tullow Oil in a similar tax argument following an acquisition in Uganda, the Daily Telegraph reported recently. Both Tullow’s and Vodafone’s tax bills arise because developing countries tax gains on sales of shares in their countries and come after the buyers with a bill if necessary.

This is generally recognised as a legitimate way for poor countries to raise much needed tax and preventing them doing so could prove costly. In Tullow’s case Uganda would be around £175m worse off, over twice the £80m annual UK aid to the country. And Vodafone’s £1.6bn Indian tax bill is around six years’ worth of Britain’s £280m aid to the country."

Yet more disgrace. Worth taking to the streets for.

NB reposted from Tax Justice Network with permission


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