25 Mar 2011

500,000 companies fail to pay tax or file accounts!!

While I was away for a few days in Wales a press release re the tax haven videos I made was sent out - see below - meanwhile the Government are cutting Corporation Tax - agh! As Johann Hari says in the Indy following the budget  "I doubt there was a single person who woke up yesterday, looked out across Britain, and thought: "I know what's wrong with this country. Vodafone pays too much tax."

We are as David Cameron promised getting a light touch for corporations re tax. Green MP Caroline Lucas, has tabled a new Tax and Financial Transparency Bill in the House of Commons to try and tackle the UK's billion-pound tax evasion scandal.

The HMRC is failing to prevent serious tax evasion which could amount to as much as £16 billion of lost tax. Caroline Lucas writes about this  key, key issue -  'click read' more to see the rest of this blog:

"This Bill has two aims. The first is to tackle the scandalous reality that around 500,000 companies every year are not paying tax in the UK - an issue highlighted in the report published by Tax Research UK this week. It estimates 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. Tax Research UK estimate 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. This simple law could recover billions of pounds of lost tax for the UK."

"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. This information on where companies make their sales, record their profits and pay their taxes is vital if we are to ensure that multinational corporations make a fair and proper contribution to our society. Corporate social responsibility is not an option for companies - 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."

See the report from Tax Research UK is entitled '500,000 missing people: £16 billion of lost tax' and is available to download at: http://www.taxresearch.org.uk/Documents/500000Final.pdf

Here is the release that went to local press:


Edited film of presentation is uploaded to YouTube to enable wider audience

Summary: A Stroud District Councillor (1) has just put together 6 short videos of a presentation given by John Christensen (2) of the Tax Justice Network (3) in Stroud recently. 'The Rise and Rise of Britain's Tax Haven Empire' was an event held in Stroud’s Subscription Rooms attended by over 100 people, organised by Stroud Communiversity (4). During the presentation, John Christensen made clear that the Government’s plans to cut services were unnecessary and argued that the focus should instead by on tax collection. The videos are available at: http://bit.ly/iflD6I (5)

On January 20th, over 100 people attended a presentation by John Christensen, a former economist at the Treasury and for the Jersey government. Christensen, who now works for the Tax Justice Network, stated during his presentation that "An estimated £123 billion is lost in tax avoidance, tax evasion and uncollected taxes each year. Britain is the biggest player in terms of tax havens and it is time we put an end to them."

Philip Booth put the film of the event together. He commented: "Ordinary Britons are losing billions to tax havens through the legal and illegal dodges of wealthy individuals and corporations. Meanwhile corporations and the wealthy are getting poorer British people to pay their taxes for them.”

Mr Booth, who is District Councillor for Randwick, Whiteshill and Ruscombe and a member of Transition Stroud, added: "Britain is a tax haven in its own right and controls a network of tax havens around the world – from Jersey to the Caymans – which hoovers up money from around the world and funnels it into the City of London. But this offshore money flowing into Britain doesn't compensate for the outflows. This is part of creating too-big-to-fail banks, pushing out manufacturing, increasing inequality, creating wasteful property bubbles and enabling crimes to be covered up."

The film of the Stroud talk is divided into six short sections including a section covering some of the questions and comments that were asked on the night. There is also a section where Stroud Communiversity member James Beecher (6) conducts a ten minute interview with John Christensen.

Mr Beecher commented “We are being bombarded with the idea that there is no alternative to the cuts to public services that we face, but these videos make it clear that the cuts that are being made are a political choice that puts the burden onto ordinary people, rather than targeting large corporations and the rich. They are driven by ideology, not by necessity.” He added, “It is reckless short-sightedness to cut drastically when we should be investing in tackling not only the economic crisis but Peak Oil and Climate Change. Addressing tax havens is a win-win for all of us."

Martin Large (7), a member of Stroud Communiversity and Chair of the event noted that "Neil Carmichael MP has not yet acknowledged my letter conveying to him the burning questions from the 20th January Tax Havens Public meeting at the Sub Rooms - "What is the government doing to collect the £123bn per annum tax that currently goes uncollected, avoided or evaded? Why is there a need for drastic cuts at all, when efficient tax collection would cut most of the deficit?”

Mr Carmichael was not able to attend the event, but did provide a statement which claimed that the Government “will make £900 million available to combat non-compliance in the tax system” (8). John Christensen pointed out, however, that Her Majesty’s Revenue and Customs – the government department tasked with collecting tax – faces cuts much greater than this figure. The Coalition Government is cutting HMRC funding by £2 billion, which will result in 25,000 job cuts and the closure of over 200 offices (9).

Notes for Editors:

1.     Philip Booth is a Green Party Stroud District Councillor for Randwick, Whiteshill and Ruscombe. Last year he was re-elected with 68.5% of the vote. He has uploaded all the tax haven videos to his blog at: http://ruscombegreen.blogspot.com/2011/03/tax-haven-videos.html. In 2010 the blog was voted 11th in a national poll of Councillors blogs.
2.     The Tax Justice Network is an international network of organisations that “promotes transparency in international finance and opposes secrecy. We support a level playing field on tax and we oppose loopholes and distortions in tax and regulation, and the abuses that flow from them. We promote tax compliance and we oppose tax evasion, tax avoidance, and all the mechanisms that enable owners and controllers of wealth to escape their responsibilities to the societies on which they and their wealth depend.” For more information see: http://www.taxjustice.net
3.     Stroud Communiversity is a collaboration between the organisations Transition Stroud (www.transitionstroud.org/) and Stroud CommonWealth (www.stroudcommonwealth.org.uk). It aims to “build a community of practice for sustainable livelihoods and a local living economy”. For more information see: http://www.stroudcommonwealth.org.uk/index.php?Itemid=42&id=36&option=com_content&task=view .
4.     The long link is http://www.youtube.com/watch?v=zsjJR4Fmzwg.
5.     James Beecher is a member of Stroud Communiversity and Transition Stroud. He is studying for a PhD in Economics at the University of Wales Institute, Cardiff. He can be contacted at: jabeecher(at)uwic.ac.uk
6.     Martin Large is a member of Stroud Communiversity and Stroud CommonWealth. He is the author of ‘Common Wealth: For a free, equal, mutual and sustainable economy’ (http://www.hawthornpress.com/book.php?isbn=9781903458983).
7.     James Beecher has a copy of Neil Carmichael’s full statement if further quotations are required. Contact above.
8.     For more on HMRC cuts see: http://www.fda.org.uk/Media/MPs-join-ARC-in-condemning-HMRC-cuts.aspx
9.  The TUC is organising a big protest against the Coalition Government's cuts. The 'March for the Alternative' will be held in London on 26th March. Coach tickets from Stroud are available from John Marjoram on 01453 750962.

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