The Missing Billions: The UK Tax Gap

GLOBALIST FIRMS SUCK UK PROFITS AND PAY LITTLE TAX

Cameron is starving the poor and vulnerable with bedroom tax and cutbacks in heating allowances for the elderly while turning a blind Tory eye to his Fat Cat Multinational mates who are literally getting away with economic murder!

 

Global firms such as Starbucks, Google and Amazon have come under fire for avoiding paying tax on their British sales. There seems to be a growing culture of naming and shaming companies. But what impact does it have?

Companies have long had complicated tax structures, but a recent spate of stories has highlighted a number of tax-avoiding firms that are not seen to be playing their part.

 

Starbucks, for example, had sales of £400m in the UK last year, but paid no corporation tax. It transferred some money to a Dutch sister company in royalty payments, bought coffee beans from Switzerland and paid high interest rates to borrow from other parts of the business.

Amazon, which had sales in the UK of £3.35bn in 2011, only reported a "tax expense" of £1.8m.

And Google's UK unit paid just £6m to the Treasury in 2011 on UK turnover of £395m.

 

A recent report showed :-

Tax avoidance is the process of getting round taxation law without actually breaking it. Tax planning is the use of the opportunities Parliament has provided to citizens to reduce their tax rate.

The result of the calculations set out in this report reveal that the amount of tax lost to avoidance and planning is a number bigger than most might ever imagine. It is estimated here that £25 billion annually is lost from tax avoidance. This is made up of £13 billion p.a. from tax avoidance by individuals and £12 billion p.a. from the 700 largest corporations.

Estimating these figures involved an original detailed analysis of several sets of Government data and further analysis of 344 sets of accounts published by the UK's fifty largest companies covering a seven-year period.

It is estimated that an additional £8 billion p.a. is lost to public funds from tax planning by the wealthiest members of the UK community, i.e. those earning over £100,000 p.a.

The result of this is that the UK tax system is not nearly as progressive as Parliament intended and as social justice requires. In addition, public funds are more scarce than they may otherwise be and certainly more scarce than Parliament would have intended when agreeing tax rates. It is notable that the Government is currently seeking to rein in the annual growth in public spending by 30 billion pounds through an 'efficiency programme'. Given this figure is not far in excess of the current income lost to tax avoidance and is actually less than that lost to avoidance and planning combined, this report raises serious questions about the price now being paid by public services as a result of this activity.

In the case of individuals, tax avoidance usually takes the following forms:

• shifting income from the person who should really pay tax to someone else;
• moving transactions out of the UK
• changing the nature of transactions, in particular so that income is subject to Capital Gains Tax rather than income tax
• abusing the law on limited companies.

Companies have more opportunity than individuals to avoid and plan for tax. This is, in particular, because they operate internationally, opening avenues for tax planning and avoidance between territories that no individual can exploit. This is why the rate of tax lost to corporate tax planning and avoidance is found to be greater as a proportion of tax actually paid than that for individuals. This report bases its findings on new and original research of the fifty largest companies in the UK and shows that:

• The fifty largest companies almost always pay 5% less tax on average than they declare in their accounts.
• The average tax rate paid by these companies fell by more than 0.5% a year over a seven-year period to 2006, even though the UK tax rate for these companies was constant throughout that time – as a result, the de facto corporation tax rate for UK companies in 2006 was 22.5% when the actual rate agreed by Parliament was 30%.
• This means that when the new higher corporation tax rate for smaller companies reaches 22% by 2011 (as announced in the 2007 Budget), small companies are likely to be paying a higher proportion of tax on their profits than the fifty largest companies on current trends.
• If this de facto tax rate was the official tax rate it would place the UK 16th in a table of corporation tax rates for the EU 25 with France the highest and Malta the lowest – it would also mean that the UK had the lowest corporation tax rate of the Western European economies with the exception of Ireland.
• By the end of 2006, the cumulative tax savings recorded in the accounts of the fifty largest companies was £47 billion; this actually exceeded the total tax paid by all companies in 2006 by some £2 billion.

These figures strongly suggest that the regular complaints from the business community about the burden of tax they endure in the UK should be treated with a high degree of scepticism.The facts relating to tax avoidance and tax planning make it clear that this deliberate behaviour is imposing a substantial cost on UK society, and on those taxpayers who seek to comply with the spirit and letter of UK tax law. Knowing this is not enough though.

 

 

 

A White Nationalist Government would crack down hard on this massive tax dodging, and would make every possible effort to encourage the growth of companies which are owned and managed in Great Britain and employ British people - with an end to the scandal of Overseas Call centres!
Break up the big multi-nationals, the economic arm of the Globalists. Encourage small business and the family local shop. Bust Big Capital and keep Britain's cash in Britain!