Polly Toynbee makes a powerful argument on tax this morning. It's worth reading in full, but since since she quotes me, let me quote in return:
Would a government serious about tax collection reduce HMRC staff by 10,000, when the EU puts UK tax evasion at £70bn? Tireless campaigner Richard Murphy's report on Companies House shows a shocking dereliction by this government and the last. A third of firms fail to file returns and £16bn in tax goes missing, with little inquiry and low risk of penalty. And now its staff are cut too. Forcing shell companies to register owners might not work without the risk of penalties.
Britain can do plenty alone: we could adopt US tax laws that make every UK passport holder, wherever they are in the world, pay UK tax. We could make non-dom residents pay after, say, four years' stay. Why let private equity strip the public purse? Boots, bought up by private equity, was loaded with debt and moved to low-tax Zug. Overnight, its tax bill fell from £606m to £74m. Why did Labour and this government permit such drainage of national resources?
In power Labour was timid on tax. Ed Miliband's recent good speech on Google came late, after Cameron made the running. Tax cheating should be Labour's chance to tell honest political truths: you get what you pay for, you can't have Swedish services on US tax ideology. Tax is the price we pay for civilisation. At elections, all parties promise the impossible, more with less and cuts in "bureaucracy" to pay for everything. Treating the public like children on tax does nothing for trust in politics. The door has opened for that conversation.
I am speaking at a Labour event in Parliament tomorrow (6pm). I will not mince my words. Labour has been way behind the curve on this issue, it's latest policy statement being vague and lacking any real commitment. It's time it moved to the front of the debate.
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Breath. Holding. Not.
“I will not mince my words. Labour has been way behind the curve on this issue, it’s latest policy statement being vague and lacking any real commitment. It’s time it moved to the front of the debate.”
I couldn’t agree more. Labour have been asleep at the wheel again….
Shouldn’t Ed Balls be taking the lead on this?
I must admit I find the present Labour theme that they can be “trusted” with the countries finances NOW to be admitting” that they got it wrong when last in “power”.
However:
http://mainlymacro.blogspot.co.uk/2013/06/must-we-live-with-post-truth-media.html
Sorry that I can’t make the meeting tomorrow evening, Richard.
I have no doubt that one of the main reasons why One Nation Labour’s pronouncements on tax and HMRC have been vague and lacking in commitment is that they are being advised by people from the big four, as are Tories.
The second is that if they speak out in a manner that you and Polly Toynbee advocate they will almost certainly lose any funding they might otherwise receive from big business and the ultra-wealthy. And with an election coming up that’s not a road they wish to tread, particularly as it becomes more apparent by the week that even organisations we might have considered relatively virtuous (such as Sainsbury’s) are into tax havens.
All in all not many options open to Ed and co, are there, unless they were courageous politicians, of course.
And I don’t think you think they are….
Another time
We shouldn’t really care if private equity loads up a company with debt, provided the debt originates in the UK, so that the interest tax deduction is offset by the interest income in the hands of the lenders. It is allowing the interest deduction from foreign funding that is the issue.
Agreed
Presumably the quid pro quo would be that interest received in the UK from investments abroad would not be taxable?
If there was no CT deduction for intrest paid here
Given that this would be a very different situation from most of the rest of the world, are you not concerned that it would give rise to a lot of anomalies and opportunities to avoid tax?
For example, a UK business funds French operations by way of a loan: the interest is deductible under French tax rules, but is not taxed in the UK. The French authorities have nothing to complain about, as this is clearly a UK tax issue; HMRC are unable to complain as the exemption is clearly intended by you.
Or would you recommmend that all jurisdictions adopt the same approach simultaneously?
Heard of the CCCTB?
Of course I have.
I hadn’t heard that it would apply globally, though.
And I hadn’t heard that interest was going to be non-taxable, either. It gets consolidated out within a CCCTB group, but that’s not at all the same thing.
What about taxing foreign interest income in the UK, I assume you are equally consistent and will exempt such income from taxation in the UK?
If there is no CT deduction
Richard – don’t know why you waste your valuable time with Labour. They’ve gave up the ghost years ago.
I will talk to all reasonable political parties
“I am speaking at a Labour event in Parliament tomorrow (6pm)”
Hi Richard, is this the postponed Labour meeting on tax? If so I’m extremely cross that I was not informed, since I was promised… I am a Labour Party member, after all, and one with a lot to say about tax.
Yes it is committee room 8 I think 6pm
“For far too long we’ve built the careers of Labour politicians, only to be let down when we needed them most. I don’t want to hear Labour apologising for their past mistakes.”
http://money.aol.co.uk/2013/06/19/union-challenges-tribunal-charge/
I think he’s wasting his breath. Corporate capture has got the labour leaders.