I note the FT has said this morning that:
The Labour leader set out plans to raise £1.1bn by cutting down on tax avoidance — a figure tax advisers said was “optimistic”.
Those advisers, are to be blunt, getting desperate if they think that is the case. If they really think the entire OECD BEPS (and related) initiatives cannot deliver the UK £1.1 billion they're seriously misreading the runes.
Let's just look at what is on the way, in no small part because NGOs have put issues on this international agenda:
- Country-by-country reporting for banks, on public record, which is going to increase the pressure on them to improve their reporting and the places where they record their profits
- Country-by-country reporting, to tax authorities alone (regrettably), which will however make it considerably easier for all tax authorities and so HMRC to select targets for transfer pricing investigation
- Automatic information exchange of data on holdings in many tax havens - including those hidden by companies and trusts, which will beat the effectiveness of any whistleblower list to date and the absurd Swiss arrangements
- Beneficial ownership of companies on public record, which will not go nearly far enough but will make tracing some tax debt so much easier
- Action on hybrid mismatches (albeit, not as strong as I would wish)
- And action to come, we think, on permanent establishment rules tackling some very big tax abuse.
And all that will not bring in £1.1 billion a year? Who do they think they are kidding with such comments? Only the clients they're still trying to sell to from tax havens, I suspect.
No, what is really wrong with this estimate is just how unambitious it is. I am aware, of course, that HMRC say that tax avoidance is, at most £9 billion a year whereas I think it at least double that, but suggesting just tax avoidance will be targeted to pay for the NHS is the mistake. The much bigger issue in terms of value is tax evasion.
According to HMRC tax evasion costs the UK £22 billion and year and I believe it is in excess of £80 billion. Let's ignore the difference for a minute (the HMRC estimate is hopelessly wrong however viewed) and agree on the issue of scale. Tax evasion is a much bigger issue than tax avoidance. In that case why isn't it being tackled? What is the problem in saying tax evaders are cheats? And that they undermine the NHS? And education? And pensions?
And perhaps, most significantly, they underline the competitiveness and effectiveness of small business in the UK because in an ineffectively regulated system - which is what we have - it is the cheats that prosper in the short term. As a result small business is not investing. And it is not creating jobs. And it is not delivering apprenticeships. And so it is not delivering growth, sustainable or otherwise. And as perception of that regulatory failure grows the problem becomes endemic, ad so deeply corrosive.
That's the biggest tax issue in the UK economy right now.
And it's time politicians said so instead of living in fear of white van man, and woman. By failing to do so they're cheating us all of tax that is owed. But worse, they're cheating honest businesses of their livelihoods, and I cannot see why they would want to do that.
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Articles have been written about tax avoidance and evasion asking the same correct questions that have only one answer. The system stays corrupt and could in no way operate at such a dollar level if those actors claiming salaries by dealing with the dirty system actually did the real deeds. The last target is now on the line, global taxpayers (nation state by nation state). There really is no more time, we failed the test, if no banksters etc, were criminally convicted and were left untouched after the recession, the next defrauding game began; this time via trade agreements that aim to privatize all pubic institutions, services, pensions, banking data. In other words, wholesale theft of public assets to be turned around and resold back to their designated public at ever higher costs (TISA for one).
To talk as though there really is a mutual conversation going on is quite simply an exercise in playing the same record in the same grove. Bottom line, this is only about money and taxpayers are to sole source in any and every role. If the policies at the federal level for each nation state are this corrupt then pull the plug. After all, the Madoff ponzie scheme ended with only the ‘rich’ defrauded clients getting 100% of their stolen money paid back, the rest of the victims, got nothing but a mike to complain into. Just like these very tax avoidance/evaders with billions of dollars in profits are still receiving billions in subsidies. Ironic, or are taxpayers asking for it, being this stupid for this long (myself included)?
What are you actually suggesting?
It simple really, if multi billion dollar transnationals can for decades, demand without reason just one nation state to pay out 690 billion dollars in free taxpayer subsidies without audits, or measures to ensure repayment of these subsidies, then why should taxpayers of said country just initiate a staggered non payment of federal taxes. The level of federal accountability has since the hyper-state of secrecy become so low as to defy measurement. Not even auditor-generals have the range of access necessary to know all legislative impacts. Federal governments in particular have had to admit to billions lost in governmental use, somewhere, most wait for time to lessen the need to find these funds.
Efficacy of wars and claims made are different since the public lost their right to know and technology with the aid of privatized contracting out have virtually stopped the flow of any significant info on federal activities, even after the fact. Add to that our corporate media that care only to censor properly and the new, invention of ‘false flag reporting’ is here to stay. Worse it is indistinguishable, people can no longer tell false from exaggerated, whole countries can become good or bad by decree. Its as muddled as any secret service operating today. The problem can become so layered that even spies are confused. Imagine the confusion in Iraq, who is fighting who and for what? Many feel the whole crisis is about oil corporations getting control first from the targeted state that is being destroyed but the public is left with 24/7 of looped accusations and counter allegations. We have little bearing, even when wrong is admitted, it now doesn’t matter because we have no means to assert any demands to the contrary.
Well, the targets will be ambitious if HM Revenue & Customs is not reformed and funded properly.
So reforming and funding HMRC is the first aim
This is only my prospective but its as if the US is fighting for its very dominate role as the number one economy and political power of the world. So far, it has and is playing bully with China in the China Sea (with Japan, Vietnam, Korea assisting for various motives). Its second theater of operations is in the Ukraine seen to be somewhat of a fiasco. Here, events are being media managed or silent depending on the need. But the info is not varied and thus its hard to layer the confusion. This may be due to an expected historical hatred of Russia/Putin. But the facts or motivation came from the formation of the BRICS and the agreement to use other currencies than the US dollar. The particular use of the Chinese currency for long term trade agreements has become the catalyst. Russia and China recently signed a 25 year contractual oil agreement all in the Chinese and Russian currencies.
Its one thing to have China competing economically in Africa, there at least the US has AFRICOM, their widely spread military set of bases, etc strategically set up to ‘deal’ with and support in-favor governments against ‘any’ usurper or outside competitor. In South America the US is revisiting the ‘old’ but tested counter-interventions, where a country’s entire political and elected support is undermined by similar 1970’s chaos scenarios, as well as the ever reliable loading of debt through manipulation and interest rate increases. But competing with nation powers such as Russia and China who are not only strategic neighbors but share the diplomatic dubiousness of being economic arch enemies of the US for decades narrows the planning to military bullying via proxy wars in the Middle East and a not as boldly supported EU/NATO Ukrainian plan which is turning into a rather botched/overplayed zero-game taken too far (more out of short term NATO needs that led to limited scope and thinking). Rather like a multi-level chess game with each level having oil and gas pipelines as landscape parts with the country’s various military and government pawns all being moved through subterfuge and enemy labels. Of course the only truly sufferers, the civilians are not even represented as their costs is limited to body counts or donations as refugees. So far, there are estimated to be well over 130 such conflicts worldwide and still, more may be in the planning. To say this is all crazy, defies the earlier answer to current outstanding global debts and derivatives hovering over our precious public assets. Seems their next.
I think this fairly off subject
I may think hard about future similar comments
Sorry, its just how interconnected being global makes all things economic and political. I apologize as a sociologist, seeing the growing pictures of so many inter-related issues and finding how difficult the average citizen feels they can cope enough to understand and act just pushing the rest forward. To most, diverted corporate revenue is one thing but it becomes blurred by every new crisis or hidden by every other distraction till is simply is out of mind or left written on hopefully well intentioned studies or policies that turn to piles with every new inquiry on the same subject as yet dealt with, in the many past times. Take care and I do appreciate your newsletter and since you remarked, shall not do the same a second time.
Thanks
That comment gives it a context
With that the issue makes sense
Best
Richard