Friday, 13 February 2015

Tax Avoidance

It is positive that tax avoidance has been getting a lot of coverage recently. Comments from Conservative donor and peer Lord Fink were surprising and massively out of step with public opinion. He said that tax avoidance is widespread indicating that he thinks that everybody does it. 
Everyone does not avoid tax, because tax is not a choice for the majority of society: Small business owners fill in tax returns and pay their tax on time and in full. Most workers have tax deducted from their wages every month through the standard ‘pay as you earn’ (PAYE) system. I do not see why it should be any different for large corporations or very wealthy individuals. Tax is an issue of fairness, for example how can a small independent coffee shop compete on a level playing field with a multination corporation with sophisticated mechanisms to avoid paying tax in the country in which it operates?
This week we have seen that the Conservative party is incapable of tackling tax avoidance, maybe because many of their donors avoid tax. UKIP don’t seem interested in the issue either. Yesterday their MEPs were the only ones who voted against setting up a committee to look at the tax affairs of EU member nations.
Labour’s measures to tackle tax avoidance will include:
• Forcing the UK’s Overseas Territories and Crown Dependencies to produce publicly available registries of beneficial ownership.
• Ensuring stronger independent scrutiny of the tax system and of the government’s efforts to tackle tax avoidance.
• Making country-by-country reporting information publicly available.
In our first finance bill we will:
• Introduce penalties for those who are caught abusing tax rules.
• Close loopholes used by hedge funds to avoid stamp duty and the Eurobonds loophole which allows some large companies to move profits out of the UK and avoid Corporation Tax.
• Scrap the “Shares for Rights” scheme, which could enable avoidance and cost £1bn to administer, ensuring that HMRC can better focus on tackling tax avoidance.
Senior Conservative may claim that they only do the 'vanilla' sort of tax avoidance . I did not know that dishonesty came in different flavours but comments like this comments really do leave a bad taste in the mouth.

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