When John Cridland of the CBI spoke at Policy Exchange this morning he said:
“Businesses making use of the tax reliefs the government makes available to them is called tax management. It's an important function of the business world, along with things such as human resources and financial control.
“It's a dangerous — if sometimes convenient — myth some people peddle that all tax management is abusive, and amounts to evasion. It doesn't.
First, no one I knows peddles that myth. People well know the difference bewteen avoidance and evasion. No one suggests large companies are evading - they have no reason to do so. So stop peddling myths John, I suggest.
Second, stop making up new myths. Tax management if it's form filling is fine. But you well know that what's criticised is the enormous effort companies go to to make sure that their profits fall out of the UK tax net altogether - usually via their extensive use of intellectual property rights located in tax havens - whose use you condemned this morning. So stop playing silly games by trying to rename the practice as tax management: it's tax avoidance and as George Osborne said it's morally repugnant. Now why not say so?
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
It has long been the view of big business and the Big 4 that tax is a cost to be managed like any other. The ethos is that tax is therefore the same as paper clips. And therein is the issue. Paying tax (and the right amount, at the right time etc etc) should be the below the line cost of the right to do business in a jurisdiction. That’s what needs to be shouted from the roof tops, and I know you are doing just that.
Tax is, of course, a distribution to society
Few recognise that
“Businesses making use of the tax reliefs the government makes available to them is called tax management.”
I think you regard that as tax compliance, don’t you Richard? And I would suggest that, based on comment in the last few weeks, most people do NOT know the difference between tax planning, tax avoidance and tax evasion.
No – this is deliberate obfuscation designed to achieve the outcome you describe
Hi Richard
I was at the CBI event yesterday morning and suggest that your quote above is not representative of what John Cridland said nor of the two CBI documents that have been produced reporting on “Tax and British business – making the case”.
Indeed the main CBI report does contain pretty much the condemnation you seek re abusive tax arrangements being ‘repugnant’. And John Cridland pretty much said this during his speech too.
I quote from p9 of the main (20 page) summary:
“Rooting out abusive arrangements and evasion
– Tax evasion – not declaring taxable income that is due – is rightly illegal
– Abusive arrangements are those which are hughly artificial, with no commercial purpose
– These abusive arrangements are unaccceptable”
and
“In order to understand what tax management is and how it is a
positive part of the way that the government operates and uses the
tax system, it is vital to distinguish it from abusive arrangements
and evasion.
Quite simply, anyone who evades tax by not declaring
taxable income is involved in criminal behaviour. Similarly, where
companies and their advisers devise or implement abusive
arrangements that are legal, the CBI believes these should be
tested by HMRC to the full. But all of this is very different to
responsible tax management.
It is therefore wrong to brand all tax management as ‘abusive’. Tax
management is necessary and indeed often encouraged by the
government. The majority of businesses seek only to reach a clear
and certain outcome in the taxes they pay, while satisfying
stakeholders that they have been thorough in applying all reliefs
and allowances made available by law, so that they do not pay
more than they are legally obliged to. This is no different from the
attitude of most taxpayers — pay the tax due.”
In his speech (the text of which is available on the CBI site) he went further and said:
“We need to distinguish between legitimate, necessary tax management and abusive arrangements to avoid tax”
and
“I want to ensure you are left with the indelible impression that evasive or abusive arrangements are not – and will never be – tolerated by responsible business.”
I don’t expect for one moment that you will agree with all that the CBI report contains…….
Mark
I coped those straight from the CBI web site
They were their highlights
And Cridland has to justify the secrecy in almost all tax havens now – used by vast numbers of his members
He says it’s abusive
Richard
Many points were highlighted. You challenged him to criticise morally repugnant tax avoidance although he and the CBI clearly have done.
Going back to your first point above:
You said: “No one I knows peddles that myth. People well know the difference bewteen avoidance and evasion. No one suggests large companies are evading.”
To which I would respond that perhaps you don’t know everyone who is commenting on such issues. 😉
I certainly have heard and read such views expressed many times across the media, blogoshere and in the twitterverse. So NOT a myth, just something that perhaps you have not encountered. So again, on this point your criticism of John Cridland’s comments is inappropriate in my view.
Mark
You’rte now desc ending into the simple ranks of the gullible
The CBI says secrecy is unacceptable – and define its absence as being a TIEA. France recently explained that despite the enormous problems of raising TIEA requests – the impediments to asking are enormous – it has done so about 200 times and in 70% of cases tax havens don’t reply. It’s pruse sophistry – gross misinformation – or blatant dissembling to say that’s transaprency – and you should know it.
It’s the same on the GAAR. As ARC point out, this is a deliberate propsoal by a man well known for his involvement in the tax avoidance industry to produce a plan that would stop SHIPS 2 and nothing else. In other words – it is an excuse to say anyhtring but SHIPS 2 is legimtimate tax planning. Again, if you can’t see that – well, draw your own conclusion.
Youy once showed moral principles Mark.
You’re now just becoming a shrill for the tax abuse industry. It’s an odd direction of travel when the whole country bar you seem to have rumbled them. What’s the explanation?
Richard
I would be interested in your evidence that Graham Aaaronson is involved in the tax avoidance industry.
No doubt you will then agree that criminal law barristers who defend convicted criminals are involved in the criminal industry.
Finallly, please confirm whether or not the spokesman for the ARC is actually a practising revenue official or whether he is just a union rep paid for by HMRC
I refer you to ARC
All ARC officials are high level HMRC officials.
Richard
You have accused me of being gullible – and of becoming “a shrill for the tax avoidance industry”.
How dare you!
I thought long and hard before returning to your blog after some time away. We have previously debated issues here but I chose to step back for a number of reasons.
I only commented yesterday as I was at the event at which John Cridland spoke and felt that your first post above had the potential to mislead. I quoted directly from the CBI report to which you referred.
I then suggested that you had chosen to highlight points that support your contention but had missed those that ECHO the views YOU were demanding the CBI express.
Now you turn on me (the messenger) and imply I have expressed my own views about tax abuse above. I have not. Worse you accuse me of having changed my position re tax abuse – which I have not. Nor is there any evidence for suggesting that I have done so.
You know full well from all of our past engagements and from the many blog posts and articles I have written that I am no fan of such activity. Why you feel the need to disparage me I don’t know.
All I did above was to quote from the CBI report to show that they are saying exactly what you were calling for them to say. You may not like the facts. You may have other complaints re the CBI and you may have concerns about some big businesses. Fine. I may well agree with some of your points. But I implore you to stick to the facts and avoid the personal abuse.
I was going to say that it serves no valid purpose. But maybe it is a part of your strategy to scare away anyone from ever challenging or questioning what you say. And that the absence of critical comment then makes it look as if everyone agrees with you, even when you are wrong (which I think you are sometimes).
I am disappointed as I thought better of you. Sadly it seems I was wrong.
Read these:
http://www.taxresearch.org.uk/Blog/2012/04/21/cbi-tax-misinformation-they-support-a-general-anti-avoidance-rule/
http://www.taxresearch.org.uk/Blog/2012/04/21/cbi-tax-misinformation-60-of-small-businesses-dont-pay-corporation-tax/
http://www.taxresearch.org.uk/Blog/2012/04/21/cbi-tax-misinformation-employers-do-not-meet-the-cost-of-employers-national-insurance-contributiuons/
You were gullible all right.
You could not see the untruths in what was being said.
That was what my accusation was about.
Now stop the ad hominems and the ‘how dare you’s and start looking at the reality of what’s going on. Then you might be credible.
Right now the suggestion you’re being an unthinking conduit, or worse still an endorser of their misrepresentations, is justified.
As for your final comments – these have the ominous feel that you have sunk to the level of the right wing troll. The fact that I do engage here – endlessly – with such people – and you – proves just how stupid (I mean that) your comment is
Just to emphasise how soft the Government is being on corporate taxation it is worth looking by how much they are planning to increase the revenues from various taxes between the 2010/11 and 2016/17:
PAYE +52
Self Assessment Income Tax +8.1
NIC +35.3
Corporation Tax +6.4
CGT +3.9
Inheritance Tax +0.8
Bank Levy +2.8
(all figures in £bn)
And which segment of the economy is running surpluses/deficits at the present time and is therefore best placed to pay the additional taxes?
The figures really are the best illustration I have seen of the nature and priorities of this stinking and venal government, and that is even without looking at what they are doing on the expenditure side. All in it together, I’m afraid not.
The self pleading and the chutzpah of the CBI is quite something as well.
It would appear that Cameron’s Dad “managed” his taxes very well:
http://www.guardian.co.uk/politics/2012/apr/20/cameron-family-tax-havens.
[…] The CBI’s renamed tax avoidance. It’s tax management now. So that’s all right then […]
This one seems like a “stand-off”.
I like & admire Richard but he can be overly aggressive.
Mark needs to accept that much of what his members do is the sort of “tax mitigation” that, if all the facts were known, is fraud straight up & you’d go to nick for it !
In this area the world will not be xchanged by the meek
And all I did was say that what Mark was said was straightforwardly wrong – the CBI are not saying anything like what the form of words they’re using implies
But let me put it straight – Mark is not the sort of guy who goes anywhere near dodgy tax – and I’m happy to say it. All I challenged was the fact that he accepted at face valuye the CBI’s claims – and they’re nat capable of ebing accepted at that level as I and others have seen
He then got a bruised ego for being rumbled