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Caroline Lucas’ bill fights taxdodging - another alternative to harmful public spending cuts

(54 Posts)
ttosca Thu 09-Jun-11 23:47:03

Caroline’s new Tax and Financial Transparency Bill, which could help the UK recover billions of pounds of lost tax by forcing companies to be more transparent in their accounting, is on the agenda for debate in Parliament on Friday (10 June).

The Bill, launched by the Brighton Pavilion MP in March this year, is due for its second reading in the House of Commons – and will also feature on BBC Radio 4′s Decision Time programme tonight.

The Green MP launched her campaign after posing a number of Parliamentary Questions to the Chancellor, in which she exposed the fact that H M Revenue & Customs is failing to prevent serious tax evasion which could amount to as much as £16 billion in lost tax.

A report published by Tax Research UK in March revealed that around 500,000 companies “disappeared” from the UK’s Register of Companies in the year to March 2010 – with billions being lost to the Exchequer as a result.

Caroline believes that urgent measures are needed to stop companies that are formally dissolved from trading fraudulently, thereby undermining honest businesses who do pay their taxes.

She is also calling for a requirement on multinational companies to publish information on where they make their sales, record their profits and pay their taxes, in order to ensure that corporations make a fair and proper contribution to society.

Caroline said: “The first aim of this Bill is to tackle the scandalous reality that around 500,000 companies every year appear not to be paying tax in the UK.

“Tax Research UK estimate that regulatory failures by H M Revenue & Customs and Companies House mean that around 500,000 companies a year fail to pay their tax or file their accounts.

“A great many are simply struck off the Register of Companies as a result, never to be heard of again. It is thought that up to £16 billion of tax a year might be lost to the country as a result.

“This Bill would ensure that banks have to provide details on all accounts they maintain for companies operating in the UK so that H M Revenue & Customs and Companies House can chase those companies who do not file the returns they’re obliged to make for the missing information – and the tax they owe.”

She continued: “Secondly, the bill would force companies to ‘publish what tax they pay’, requiring all companies filing accounts in the UK to include a statement on the turnover, pre-tax profit, tax charge and actual tax paid for each country in which they operate, without exception.

“If they only trade in the UK, this has no impact on them. This information would, however, mean that the answers to the questions asked of Barclays Bank earlier this year about where it earned its profits, how much profit was recorded in tax havens, and where it paid its taxes could be answered for all companies trading internationally.”

The Brighton Pavilion MP added: “This information is vital if we are to ensure that multinational corporations make a fair and proper contribution to our society.

“Companies cannot opt out of corporate social responsibility – and paying tax to the country that provides them with their opportunities to trade is an essential part of it. You can’t be socially responsible and accountable unless you say where you are and what you do in each place that you trade.”

http://brightgreenscotland.org/index.php/2011/06/caroline-lucas-bill-fights-taxdodging/

ttosca Sat 11-Jun-11 02:10:16

So? No one's interested in this?

We have a deficit problem, right? So why aren't the usual suspects excited about a new method of reducing the deficit which will reduce the need to cut public spending?

Mellowfruitfulness Sat 11-Jun-11 10:15:20

Just seen this, ttosca - very interested!

I don't think this has been widely publicised (but I've been very busy, so maybe I missed it).

Do you know what happened on Friday? If I get a chance today I shall try to find out.

It's about time, isn't it? The thing that strikes me, again and again, is that we all know what needs to be done, but there is a brick wall of vested interests that nothing seems to be able to shake. Governments remain pathetically attached to the idea that - in spite of decades of evidence to the contrary - wealth eventually trickles down. It doesn't - certainly not if companies are left to their own devices. It stays at the top unless governments force big banks and global companies to be more socially responsible and share it.

We need people who are good at making money in society - as long as they acknowledge the fact that they owe it to the rest of us to share their wealth. After all they have benefitted from being part of a society that has been created by the rest of us obeying the law and paying our taxes. They have also benefitted from us voting in governments that have allowed them to feather their own nests at our expense.

The logical conclusion of the monumental greed and selfishness shown by the banks and most of the people at the top of huge companies, is indeed survival of the fittest. They will survive and we will go under, unless we vote for a government that will force them to share.

claig Sat 11-Jun-11 14:45:35

'So why aren't the usual suspects excited about a new method of reducing the deficit?'

Good question. I am also wondering where Newwave, HHLimbo and the rest of the usual suspects are.

jackstarb Sat 11-Jun-11 15:40:10

Lets see....the annual deficit is £150bn and Ms Lucas has some ideas for finding 'as much as £16bn'....

Nice to have of course - but pardon me for not jumping with excitement.

And a bit hmm about the reality of collecting tax from failed companies and multi-nationals.

Gastonladybird Sat 11-Jun-11 15:46:24

With any luck cinnabarred will be here soon as she is guru here. I applaud her aims but am not sure what she thinks she is going to achieve that isn't in part there anyway . Companies are already required to assess international trade split in full stat accounts and state (and record) international liabilities (incl sales and agreements between international bits of group) so what exactly does she want that isn't either there already or within remit of
Taxman to ask for.

Tbh I get a bit pissed off as there is a lot in law already that can be done to stop evasion . The issue is hmrc is in such a state that I dont think it has resources

Gastonladybird Sat 11-Jun-11 15:47:06

Also whilst on subjex.

Gastonladybird Sat 11-Jun-11 15:48:50

Also whilst on subject of poorly researched new tax collection ideas, there is a lot to there is law already on so called phoenix companies who go bust and reappear.

Gastonladybird Sat 11-Jun-11 15:51:01

Also ignores the massive amount of personal avoidance that goes on ( not all of which is at level of the much discussed rich or non doms).

Again whilst I can see that the aim is good it's massively simplistic and carries a Whiff of enterprise bashing for sake of it.

HHLimbo Sat 11-Jun-11 16:32:50

Hello! Here I am <waves> grin

"She is also calling for a requirement on multinational companies to publish information on where they make their sales, record their profits and pay their taxes, in order to ensure that corporations make a fair and proper contribution to society."

This is the best part of the bill for me. I would certainly be much happier to shop somewhere that does pay its proper taxes, rather than a store which avoids contributing to the society that supports it.

Having been through companies' annual reports to find how much profit they made and tax paid in this country, I found it was often well hidden.

And of course HRMC should be enabled to do their job properly. Its not much to ask for the banks to provide this information.

newwave Sun 12-Jun-11 17:39:48

claig, sorry, been very busy with work lately and this board is an easy distraction.

Anything which clamps down on the tax avoiding/evading filth has my total support although I suspect big business and the rich Tory "friends" in the government will block this on their behalf. The Tories as always would rather fuck the most needy.

ttosca Sun 12-Jun-11 17:51:21

> Lets see....the annual deficit is £150bn and Ms Lucas has some ideas for finding 'as much as £16bn'....

> Nice to have of course - but pardon me for not jumping with excitement.

No one is suggesting that cracking down on tax avoidance will balance the budget entirely. This will help reduce the deficit, not eliminate it.

And yes, you should be excited about an annual £16 put back in to the treasury!

According to the 2008 budget:

£4.7 Billion was spent on International development

£5.0 Billion on Culture, Media and Sport

£10 Billion on Transport

So recovering £16 Billion would pay for an entire year's transport budget plus one of those other things.

ttosca Sun 12-Jun-11 17:53:10

Glastonlady

Again whilst I can see that the aim is good it's massively simplistic and carries a Whiff of enterprise bashing for sake of it.

Cracking down on tax avoidance has a whiff of enterprise bashing? Is it 'bashing', now, to expect companies to obey the law and pay their fare share?

Gastonladybird Sun 12-Jun-11 18:04:01

What do you define as fair share? Is it everything to be taxed in the Uk no matter where that enterprise takes place ( ie if say something is made and sold in another country)? How much relief do you give for tax paid elsewhere and how do you account for the fact that maybe that tax is calculated in a different way.

By enterprise bashing I don't mean companies not paying tax . However I don't think a tax system that isn't unnecessarily complex and difficult to adhere to .

Gastonladybird Sun 12-Jun-11 18:07:27

Newwave then you would presumably want something that went further than this. At present avoidance is not illegal- evasion is. Presumably you would want to see law changed to stop this?

How would you do this (general rule or specific legislation?)? Also how would you balance this with eu legislation on freedom of establishment , movement of capital etc ( I ask as there has been issues on balancing anti avoidance and eu law).

newwave Sun 12-Jun-11 21:04:47

Gaston

I would want to see every loophole closed as soon as it is seen to be used to avoid tax. Loopholes that avoid inheritance tax, loopholes that allow offshoring. etc etc.

It seems to take an eternity to close some of them.

I would also close some loopholes and tax retrospectively using the "new rules"

Please dont give me the ISA rubbish either.

Gastonladybird Sun 12-Jun-11 21:23:39

Wasn't going to talk about ISAs ( as am asking as genuinely interested in views). I think reason it takes so long as there are so many of them and so many ways that can be caught out. I believe that there aren't actually many ( if any) specialist draftsmen to do tax law so that probably makes it take longer as well as the sheer volume of changes.

The retrospective changes are interesting as its comparatively new and tends to be used ad hoc.

How would you target things? Maybe better and more assertive action on ok Ning disclosed under the tax avoidance regime?

Gastonladybird Sun 12-Jun-11 21:24:12

Meant disclosure regime

meditrina Sun 12-Jun-11 21:27:28

Anyone know if CinnabarRed is around? Remembering the tax thread, I'd be really interested in her analysis of this.

Gastonladybird Sun 12-Jun-11 21:27:48

And assume your point on ISA is it's a stated relief - you have £7k or whatever save it and get relief If entitled. Avoidance is the area of choosing to do something that may be subject to say capital gains or corporation tax rather than income tax? Just trying to see if am getting your view right ?

newwave Sun 12-Jun-11 21:28:39

The Milliband family and Gideon Osbournes family set up trusts to avoid taxes, simple make those trusts retrospectively illegal and go after the tax based upon the new rules.

Gastonladybird Sun 12-Jun-11 21:28:53

Asked yesterday as she is good on policy and why they don't shut loopholes etc. Not seen her for a while

Gastonladybird Sun 12-Jun-11 21:31:01

Dunno what kind of trusts they are new wave - was it inheritance or income or gains avoidance? And when set up as a load of stuff chained in about 2008

newwave Sun 12-Jun-11 21:32:55

Gaston TBH I would target tax avoiding rich people and companies for a start.

There was a program on TV (Panorama I think) where the CEO of a medium size company was found to be paying a lower percentage of his income on tax than his receptionist was paying, all very legal but I challenge anyone to say this is acceptable.

Gastonladybird Sun 12-Jun-11 21:37:21

I think hmrc are trying to do that as shoving what they call high net worth individuals (and what you or call rich) into special units that have more scrutiny . And targeting certain sectors which is a start.

Didn't see that panorama but was he taking income as shares- in which case I can't understand why there aren't more cases .

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