Tuesday, 11 June 2013

Failure to act on corporate tax avoidance is a disgrace.

There is a direct political link between the tax avoidance of major companies operating in the UK and cuts in welfare spending. That link is the budget deficit, a major cause of which is falling tax revenue. Long gone are the days when Cameron and Clegg declared we were all in this together. The truth is that it is the poorest in our society who are being hurt the most. Whilst falling tax revenue is the major problem, Osborne sets his sights on indiscriminately cutting welfare spending. Unfortunately Labour have now adopted the same approach.

Yet whilst the poorest are being made to pay the biggest cost of 'cutting the deficit', major corporations with billions of turnover in the UK are avoiding tax. Apple, for example, avoided over £550m in tax on more than £2bn worth of underlying profits in Britain by channelling business through Ireland.

Of course there is the ethical issue involved here; big companies avoid paying tax, yet the government attacks 'welfare scroungers'. But the truth is the strategy of dealing with the deficit through cuts in welfare spending clearly isn't working. The budget deficit is set to rise not fall. The Osborne strategy isn't working. This is why it is alarming that Miliband and Balls appear to be falling into the same mindset, that you can cut the deficit through cuts in spending. You can't if the major cause of the rising deficit is falling tax revenue. And here we return to the problem of tax avoidance. 

It is estimated that £120bn a year is lost through corporate tax avoidance, evasion and downright skulduggery. The poor pay the price.

We really do have to ask why the government continues to allow this appalling state of affairs to continue. Major corporations are failing to pay taxes in the UK and the wealthiest have got richer whilst the poor have suffered the most. Asda, Google, Apple, eBay, Ikea, Starbucks, Vodafone: all pay minimal tax on massive UK revenues, yet benefits cuts drive families from their homes.

Cuts cripple the NHS, whist companies such as Thames Water and Vodafone pay no corporation tax in the UK. For Thames Water they have 'deferred' payment. Meanwhile the NHS is expected to find some £20 billion of cuts. Front line services are suffering. Waiting lists are again becoming a problem and top down reorganisation has created uncertainty and chaos, threatening joined up care.

For richest 1,000 in Britain their wealth has increased by £155bn since crisis began. Heads they win, tails we lose.

The major cause of the budget deficit is falling tax revenue and yet the government fails to address this issue. It is a disgrace and it is time the government was forced to act.

Trading and investment profits made in the UK should be taxed in the UK. Corporations should not be allowed to squirrel them away.

2 comments:

  1. Nice read with a strong argument being presented. Corporations with no tax obligations do not contribute anything to society - something which they most definitely should do. Corporate Social Responsibility can easily be manipulated to invest in their own personal projects which benefit themselves. Some problems which the UK faces can be reduced considerably if tax avoidance/evasion is stopped.

    Peace and Love
    HS-91

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    1. Thank you for your kind comment. It is much appreciated.

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