Tax avoidance does not work unless you’re a big business, when it’s just fine

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Greg Wise's Dispatches on Channel 4 last night showed that the tax avoidance industry is alive and well and exploiting tax loopholes.

Afterwards HMRC issued a tweet saying:

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This, though, is not true. Google is living testimony to that.

And last night the Independent carried this story:

Health service rules that prevent tax-avoiding private companies from securing NHS contracts are being scrapped - for fear they “discriminate” against firms with Google-style arrangements.

 

In recent years many Clinical Commissioning Groups (CCGs) – the bodies which issue contracts for local NHS services – have tried to block companies from bidding for work if they use convoluted tax structures.

But Bristol CCG is now in the process of striking out the rule, after it was questioned during the recent tender to supply children’s community services. Lawyers feared that the rule discriminates against healthcare companies who are legally avoiding tax - allowing them to sue the NHS if they do not win the contract.

This is despite the fact that only last year the Government issued what is called Procurement policy note 03/14: promoting tax compliance that says:

A new policy was announced in the March 2013 Budget on the use of the procurement process to promote tax compliance. This applies with effect from 1 April 2013 to all central government contracts of more than £5 million. Suppliers bidding for these government contracts must self-certify their tax compliance.

Quite explicitly it permitted tax avoidance to be taken into account.

So, we end up in the situation that the government says tax avoidance does not work, when it clearly does for those with clout.

And that it will stop tax avoiders getting contracts. Except that does not work for those with the ability to threaten legal action.

Or to put it another way, tax compliance is just for little people.

And that it not good enough.

Especially when HMRC are party to not just saying it, but actually buys from Google.