George Monbiot: Yes, Britain's open for business – the sort of business that doesn't pay tax

[marmar]

from the Guardian UK:




Did Vodafone avoid £6bn of tax? As protesters gathered outside its shops last week, both the company and Her Majesty's Revenue and Customs dismissed the claim as an urban myth. That, for the media, was the end of the story. But in accepting this account journalists made an unsafe assumption: that Vodafone and Revenue & Customs are on opposing sides in the tax battle. Over the last few years the government tax office appears to have been mutating into a subsidiary of the corporate avoidance industry.

It's arguable that the UK government does not have a spending crisis; it has a tax avoidance crisis. Official accounts suggest that the tax gap amounts to £42bn. Richard Murphy of Tax Research has demonstrated that this figure cannot be correct, as it contradicts other government statistics. He estimates that avoidance now amounts to £25bn a year, evasion to £70bn, and outstanding debts to the tax service to £28bn: a total of more than £120bn.

That's roughly three-quarters of the budget deficit. It's equivalent to 80% of the UK's revenue from income tax. By comparison benefit fraud, which both the government and the rightwing press emphasised in order to justify the cuts, amounts to £1.1bn a year. No one would claim that all this missing money could be recovered. But even if only 20% were clawed back, the most damaging cuts could be reversed.

So the government is frantically seeking to close the tax gap? You're joking, of course. The comprehensive spending review will cut the revenue service by 15%. It had already been hacked to bits by New Labour. In 2005 Gordon Brown merged the Inland Revenue with Customs and Excise to create HMRC. Between them they had 99,000 staff. Since the merger this has fallen to 68,000. Some of the staff cuts were the result of sensible efficiencies. Others attacked the service's core functions. The money it spends on fighting tax avoidance, for instance, has fallen from £3.6bn in 2006 to £1.9bn today. ..........(more)

The complete piece is at: http://www.guardian.co.uk/commentisfree/2010/nov/08/businesses-that-dont-like-tax

[Blue_Tires]

1. kick

[LeftishBrit]

2. k&r&hooray for our lovely government