I have to wonder how long it will be before David Cameron's tax\u00a0policy\u00a0falls\u00a0apart\u00a0all around him.<\/p>\n
This is the man who has declared of large companies avoiding tax:<\/a><\/p>\n It\u2019s simply not fair and not right what some of them are doing by saying, I\u2019ve got lots of sales here in the UK but I\u2019m going to pay a sort of royalty fee to another company that I own in another country that has some special tax dispensation.<\/p><\/blockquote>\n Spot on David. It's not right. And the \"it's legal so it's OK\" defence does not work: you're also right on that.<\/p>\n The trouble is that over then time you've been in office you've:<\/p>\n 1) \u00a0Cut the large company corproation tax rate from 28% to 21%, although without any apparent gain for the UK.<\/p>\n 2) \u00a0Introduced a new law that gives companies a 5.25% tax rate on their treasury function profits but only if they will move them out of the UK and to a tax haven;<\/p>\n 3) \u00a0Encouraged the new patent box rules that might cost the UK \u00a31 billion in lost tax revenue.<\/p>\n 4) \u00a0Changed controlled foreign company rules that mean that 95% of all tax haven subsidiaries of UK companies will now be beyond scrutiny, so encouraging UK companies to shift their profits out of the UK.<\/p>\n 5) \u00a0Introduced a territorail tax base for the UK that means all profits earned out of the UK are now beyond the reach of the UK tax authorities - encouraging offshoring and the shifting of assets out of the UK.<\/p>\n To put it another way - all the things Cameron criticises companies for doing are being\u00a0explicitly\u00a0encouraged by this\u00a0government. And the government's new\u00a0General Anti-Abuse Rule (and yes, I do sit on the committee reviewing its rules) will not addess any of these issues, deliberately.<\/p>\n I could undertsand Cameron making a big issue on tax if his own\u00a0government\u00a0had a great record in tackling tax abuse. But it hasn't. It has a great record in encouraging it.<\/p>\n So there are two questions. Does he think he can simply get away with the bluster on tax\u00a0avoidance\u00a0in the hope that he can blame nothing happening on other countries whilst using the hype to give cover to ongoing UK abuse in the\u00a0meantime? Or is he simply unaware that his two strategies are utterly\u00a0incompatible, one with the other?<\/p>\n Let's assume he's not\u00a0completely\u00a0stupid and dismiss the second\u00a0option. In that case we're forced to\u00a0believe\u00a0that he wants to promote tax competition on the one hand whilst offering empty bluster about tackling it simultaneously, and he somehow thinks he can ride both those horses at once. He can't of course; it's totally naive of him to think he can, but it's also kind of him to provide such an easy target to expose his hypocrisy.<\/p>\n","protected":false},"excerpt":{"rendered":" I have to wonder how long it will be before David Cameron’s tax\u00a0policy\u00a0falls\u00a0apart\u00a0all around him. This is the man who has declared of large companies
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