Friday, 15 August 2014

Guardian letter on tax receipts

With "tax receipts 3.5% lower" in the first three months of the financial year compared with 2013-14, Larry Elliott concludes that "Britain is becoming a Del Boy nation".(Del Boynomics -when work and tax doesn`t add up,11/08/14) The option for the government to employ more tax inspectors is not supported as "low-level tax evasion is large", but what the government is actually doing is reducing the number of inspectors at a time when it declares that all tax avoiders must "smell the coffee". Could the "efficiency savings" of £235m at HMRC last year have something to do with the reduced sums arriving in the Treasury`s coffers? The number of HMRC staff in enforcement and compliance fell by 1529  in the years 2010-12, and the trend still continues, with another 2000 jobs currently under threat.
           All the "morally repugnant" rhetoric and such like is clearly all a pretence, deliberately achieving little so that friends in the City and in the corporation boardrooms, can continue to fleece the rest of us. It has done next to nothing about tax havens where trillions are squirrelled away, rather than paid to the Treasury; the British Overseas Territories, according to War on Want, together "rank as the most significant tax haven in the world, ahead of even Switzerland. The reality is that there is no income tax, corporation tax, sales tax, wealth tax or any other direct tax in the Cayman Islands, the British Virgin Islands account for 40% of the world`s offshore companies, and Bermuda remains Google`s favourite tax haven".
         The focus now is on Greene King, whose "purely artificial" tax avoidance schemes are now to be "considered by the court of appeal".(Brewer`s appeal court hearing,11/08/14) The scheme in question was bought from Ernst and Young for 10% of the tax saved, The fact that Ernst and Young, one of the "Big Four" audit firms, along with Deloitte, Price Waterhouse and KPMG, is allowed to "market" such devices and be paid according to the amount of tax avoided, is deplorable, and in any decent society would be criminalised by the government. The success of the scam depended, according to the QC representing HMRC, on "certain accounting treatments", (Guardian,02/12/13) and Greene King`s accounts were signed off by auditors from Ernst and Young!

          Not only is it time to end the practice whereby representatives from this so-called "Big Four" sit on Treasury committees advising on tax structures, it`s time to punish them, alongside their clients, in the courts. It`s not just banking that needs a culture change! 

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