Friday, 5 December 2014

Guardian letter on autumn statement

The autumn statement will have done nothing to change public opinion regarding the government`s commitment to reducing tax avoidance. With "just one in five believing political parties" have done enough to ensure companies and rich individuals pay their fair share, Osborne`s arrogant rhetoric on the subject will have changed very few opinions. (Osborne on the offensive over tax and deficit,03/12/14) Nothing was said which contained even the simplest of deterrents, like hugely increasing business rates for tax avoiding companies, or removing all honours from their CEOs. Instead, giving more freedom for Northern Ireland to set its own level of corporation tax, presumably at 12.5% to match that of the Republic, will cause more problems, especially when the finance ministers of Germany, France and Italy are stressing that the "lack of tax harmonisation is one of the main causes allowing aggressive tax planning",(Pressure on Juncker grows despite vow to fast-track EU tax legislation,03/12/14) Tax expert, Richard Murphy, has pointed out anyway, that under EU law, this could well be deemed illegal regional aid, whilst the "Google tax",only likely to raise at most £355m a year by 2019, is another example, as John Cridland admits,of the UK "going it alone".(Political capital, little revenue,04/12/14)

        The last time Osborne tried to create tax advantages for companies investing in Britain with the "patent box" scam, Germany forced him to back down. It seems he never learns! Are other countries in the EU expected to sit back and quietly watch businesses move their HQ to Belfast, thereby depriving their Treasuries of much needed revenue? Only when all EU members co-operate fully, agree tactics, and avoid "advice" from the Big 4 accountancy firms, will tax avoidance by the multi-nationals be reduced.

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