After the solemnity of last week, I am delighted to be able to return to one of my favourite punch bags . . . . . that of tax and corporate tax in particular. The stories just keep on rollin’ along and on and on and on . . . . .
So let’s agree that putting up tax whether personal or corporate results in no stimulation and no growth and is stupid because it kills incentive and we all know that individuals and companies spend money far more effectively than governments (no really it is a pleasure to put up Abu Qatada courtesy of you and me particularly as he patently shows such gratitude towards his hosts – and you wonder why we think politicians are inter-galactic-ally stupid!).
BUT BUT BUT surely we should ensure that “potentially” large tax payers who use our infrastructure and population to make significant profits should pay something sensible, particularly as the UK will now have the cheapest corporation tax rate in Europe. So here we have 2 contrasting stories that serve as vignettes of our time:
Firstly we have HMRC telling Ebay in no uncertain terms that they must report all the little cash traders to ensure that they (the little cash traders) pay their way or be clapped in irons and at the other end of the corporate spectrum (and on top of the Barclays, Starbucks et al tax revelations), we have Google who only paid 6m quid in tax last year. Come on Rico (Eric Smidt their exec. chairman) pull the other one with your “I think the most important thing to say about our taxes is that we fully comply with the law and we’ll obviously, should the law change, comply with that as well.” Well good news citizens, Google will “comply with the law and pay not a penny more” even if the law allows it to move profits around the world into tax free zones at will and of course they will say that they create jobs and wealth which is true but then so do the little cash traders on Ebay. Sounds familiar doesn’t it. One rule for the powerful corporate robber barons and their political lackeys, and one rule for the UK’s normal hardworking citizens some of whom may dare to make an undeclared £10.50 on Ebay.
Corporate tax avoidance is actually the most amoral tax avoidance of them all. I mean how would these companies fare in Somalia or Afghanistan or other areas where no tax = no infrastructure . . . . they wouldn’t be able to make their fat profits then would they, or bleat on about moral responsibility? I fully respect that companies have obligations to their shareholders to pay as little tax as possible and I have no problem with sensible structures that help achieve this goal (I myself help to design them for SMEs) but they also have a moral obligation (particularly large multinationals) to their “host” countries to contribute their fair share of tax to UK plc which allows them to trade so successfully. So come on HM Government, make a real difference to the exchequer by reading the riot act to some of these corporate mickey takers. Have the (Ed) balls to tell these companies to work to the spirit of the law, not just the letter of it. Tell them to make a sensible contribution and if they don’t then hit them with a 5% sales surcharge which they cannot wriggle out of. Do this and do it now!
And if there are any SMEs out there which would like a little help with some “sensible” tax structuring you know who to call!
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