Big Business, Tax and the Tories

How much tax is paid by major US companies in the UK?
By John Warren

It has become a truism that there is a clear distinction between tax avoidance and tax evasion: the former is legal, the latter illegal. This, however is where the clarity ends; for it relies on a purely theoretical, narrow and misleadingly glib distinction. In the real world there is no clear distinction, because at the margin, the limit (the only place it matters) the issue can only be decided on a case-by-case basis: in the courts. Since all tax avoidance schemes have not been tested in the courts, nor is there any likelihood of all schemes being tested there, the esoteric matter of avoidance-evasion in Britain has been completely fudged. The responsibility for the fudge is entirely that of successive governments; ultimately of Parliament itself. The fudge is not an accident.

In consequence of the fudge, Westminster has connived at the creation of a vast City industry creating exclusive, designer opportunities for large corporations and the ultra-rich to avoid tax (couture tax avoidance); and we have now reached the inevitable outcome of such sophistication: the British tax system has been reduced to an incomprehensible argumentum ad absurdum; and through the endeavours of this well-oiled industry, the lobbying  and patronage of political parties by powerful vested interests to ensure it continues to thrive, Parliament itself has finally become its servile creature. 

 

It is difficult to see how this outcome could have been achieved so thoroughly without the complete deregulation of financial markets, together with ready access to a plethora of offshore Tax Havens; all enabled by a weak, compliant or even complicit Parliament. It is no accident that now Britain sits at the centre of a veritable financial spiders-web of its own making, spun out across the world. This web of typically secret financial activity has few public hallmarks; but is probably unsustainable without ready access to vast, unquantified sums of money in a constant 24/7 flow through the City of London, and the supporting technical machinery to serve it; along with efficient, easy transfers of funds to offshore jurisdictions that offer a veil of impenetrable secrecy, buttressed by complex and intimidatory legal structures designed to confuse or repel investigation. 

 

According to a European Parliament initiative of 2013,Tax Havens have serious and reprehensible effects on the economies of EU countries, whether the aim is avoidance or evasion:
“Users of tax havens and offshore financial centres [OFCs], whether for tax evasion (illegal), or transfer pricing or other tax avoidance strategies (legal), benefit from public services, facilities, and infrastructure in the countries where they operate/live, but make a disproportionately small contribution towards their maintenance, leaving other taxpayers to make a disproportionately large contribution. As highlighted by a 2012 United States Senate Investigation, financial institutions with operations in tax havens also facilitate and profit from the criminal activities of others, thereby contributing to social and security risks, and increasing the cost, to other tax payers, of combatting these problems” (‘European Initiatives on Eliminating Tax Havens’ [EIETH] Study, April 2013; p.9)
and later,
“Tax havens and offshore financial centres undermine democracy as the users of these structures (including corporations), which account for a fraction of society, use their significant financial resources to lobby governments to implement or maintain policies that are not necessarily in the interests of the majority of society.” (EIETH Study, April 2013; p.10)
fiddleThese conclusions are also confirmed by the EU Commission, which has estimated that the costs of tax evasion alone in the EU amounts to a staggering €1 Trillion per annum, and that, “tens of billions of euros are held offshore, unreported and untaxed” (EIETH Study, 2013; p.9): a view that was perhaps confirmed within the last few days by the broader implications of the BBC ‘Panorama’ investigation of tax avoidance and undeclared bank accounts in Switzerland (BBC One: 9th February, 2015).

 

Britain is a leading international facilitator of Tax Haven and OFC use. There are three UK Crown Dependencies; Guernsey, the Isle of Man and Jersey; all three are significant Tax Havens. In addition the UK has responsibilities of various kinds related to numerous Overseas Territories, including a significant number of Tax Havens: Bermuda; British Virgin Islands; Cayman Islands; Gibraltar; Montserrat and the Turks and Caicos Islands.

 

Five of the above list are included in the top-20 of the Tax Justice Network (TJN) bi-annual Financial Secrecy Index (ranking Tax Havens on scale of secrecy):
“The index shows that the biggest player in the world of offshore secrecy is Britain, if it is lumped together with its island dependencies in the English Channel, the Caribbean and elsewhere. Britain itself is only in 21st place, but two of its satellites—Jersey and the Cayman Islands—are in the top ten, with Bermuda and Guernsey not far behind. Together they account for between a third and a half of the global market in offshore financial and corporate services. Much of the money they collect is funnelled through the City of London.” (TJN Secrecy List reported in ‘The Economist’: 6th November, 2013)

 

Notably the Cayman Islands is estimated to be the fifth largest financial centre in the world. For some unaccountable reason, however Britain does not appear to have turned the British Antarctic Territory, Pitcairn Island or South Georgia into Tax Havens: which suggests only how barren and remote a jurisdiction has to be, to defeat the capacity of the British State to facilitate the opportunity of financial engineers to turn next to nothing into a lucrative and secretive tax wheeze.

 

Meanwhile, the vast majority of the largest London Stock Exchange Listed Companies were reported as using Tax Havens; with ActionAid in 2011 showing that 98 out of 100 of the Footsie-100 used tax-haven companies, with the ‘Big-4’ UK banks – HSBC, Lloyds, RBS and Barclays, registering no less than 1,649 tax-haven companies between them (LondonlovesBusiness, 11th October, 2011). 

 

taxevasion

 

It is worth noting the slippery nature of the relationship between Tax Havens and OFCs. In 2000 the IMF defined an OFC broadly as “any financial center where offshore activity takes place”, which as it points out, would include all the leading world financial centres as OFCs, such as London: which insight promptly and curiously led the IMF to redefine the giants like London and New York as International Finance Centres (IFCs), and to offer a more “practical” redefinition of an OFC in somewhat convoluted terms as “a center where the bulk of financial sector activity is offshore on both sides of the balance sheet, (that is the counterparties of the majority of financial institutions liabilities and assets are non-residents), where the transactions are initiated elsewhere, and where the majority of the institutions involved are controlled by non-residents”. This neatly defines OFCs in terms that excludes London. 

 

It is not entirely clear which “elsewheres” the IMF had in mind when it identified the source of these tax-haven activities as being “initiated elsewhere”. Which “elsewheres” seem most likely? Since we remain a little short of help on this matter from the IMF, we shall have to look elsewhere for an explanation.

 

How do we distinguish between Tax Havens and OFCs? In evidence submitted to the House of Commons Select Committee on Financial Stability and Transparency (2008), the TJN argued that OFCs and Tax Havens were quite separate, yet “intimately related phenomena”, in which:
“the power in this relationship lies with OFCs and the companies that work within them, not the tax havens, so the focus of regulation must shift onto limiting the powers and impact of OFC operators within the global economy” (TJN: Evidence, p.3)

 

The TJN is notably more direct and unambiguous than the IMF in producing its robust proposition that identifies London as both a Tax Haven and an OFC:
“It is no longer possible for any objective person to deny the obvious fact that the UK is a tax haven and that the City of London is an OFC seeking to exercise control over our state. The evidence also shows that the City of London is also intricately connected to a web of satellite tax havens spread across the globe, including Crown Dependencies, British Overseas Territories and various members of the Commonwealth, which have served as conduits for capital flows into London whilst also providing facilities for tax evasion on an industrial scale.” (TJN: Evidence, p.4)
The TJN listed no less than 18 separate recommendations that required to be addressed, to target the pernicious effects of Tax Havens that impact even the quality of our democracy in the UK; but although most recommendations required some international cooperation (which always moves at the pace of the slowest foot-dragger), TJN clearly identified areas where the UK could act independently, now on such fundamental issues as:
  1. Ending the role of the UK as a tax-haven; 
  2. Adopting a tax strategy that does not favour large companies over small ones;
  3. Updating the 1998 Edwards Report on UK-dependency Tax Havens (including the Edwards recommendations, which were not even implemented);
  4. Improving the regulation of Tax Havens; 
  5. Ending ‘light-touch’ regulation of offshore UK activity, and placing it on the same basis of transparency as UK corporate activity. 
Somewhat unsurprisingly these recommendations have not been adopted.
Neils Johannesen and Gabriel Zucman, ‘The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown’ (eprints.lse.ac.uk/56125/ : March. 2014) have examined the effects of the G20’s efforts to achieve progress through ‘international cooperation’ since the Financial Crash, through initiatives to end bank secrecy and to compel tax havens to sign bilateral treaties that ensure the exchange of bank information. An analysis that led them to this bleak conclusion:
“Conventional wisdom among policymakers is that the G20 tax haven crackdown is a success. The evidence presented in this paper challenges this view. It suggests that, so far, treaties have led to a relocation of bank deposits between tax havens but have not triggered significant repatriations of funds. The least compliant havens have attracted new clients, while the most compliant ones have lost some, leaving roughly unchanged the total amount of wealth managed offshore.” (VI, Concluding Remarks, p.27)

In an amendment to a Labour motion on tax evasion/avoidance made in Parliament last week (a motion that was a typical parliamentary, outraged-knee-jerk response to the Panorama report), the Government made the preposterous claim to have been doughty champions of Anti-Abuse, and listed its triumphant ‘endeavours’; in which it boasts a “commitment to implement the G20-OECD agreed model for country-by-country reporting“. It is unfortunate that the Government hadn’t noticed that the G20 model has been a failure.

The Government department with the greatest operational leverage in prosecuting Anti-Abuse initiatives is HMRC. In 2013 HMRC published ‘No Safe Haven’, which conveniently provides its  “offshore evasion strategy for 2013 and beyond”. This is purely an ‘anti-evasion’ not an ‘anti-avoidance’ strategy. It is notable that HMRC makes much of claiming that it is going to apply “tough sanctions” for tax evasion, with penalties up to 200% of the tax evaded, but in spite of quoting Case Studies that create an impression that HMRC is determinedly prosecuting criminal evasion, and will use the sanction of prison for the guilty, there is little evidence that prison rather than non-criminal financial penalties is the (so-called) tough, effective sanction on which it principally means to rely.

On 11th February, 2015 there was much acrimonious argument in a Parliamentary Hearing between Patricia Hodge MP, Chair of the Public Accounts Select Committee, and Lin Homer and Jennie Grainger (Respectively CEO and Dir. General of Enforcement of HMRC), regarding the poor prosecution performance of HMRC against offshore tax evasion, with particular reference to the Panorama case. The frustration of MPs was understandable: of almost 7,000 British names turned up by the Swiss case, HMRC has only delivered one (1) single prosecution.

Homer and Grainger argued that the evidence simply was not there to prosecute; but while this specific excuse may have some technical justice, it merely exposes to view the utter failure of UK anti-evasion and avoidance measures and powers; and at the same time better explains HMRC’s emphasis in ‘No Safe Haven’ on financial fines and 200% penalties as the key sanction offered; but only at the expense of undermining their excessive claims in the same paper that HMRC will vigorously prosecute criminal evasion. HMRC simply cannot have it every way.

No doubt HMRC has lacked mechanisms that could have been provided by a Parliament intent on retributive justice and deterrence, rather than burying its head in the sand; but meanwhile Homer and Grainger simply look like hapless provincial bureaucrats, some way out of their depth, attempting to subdue circling offshore sharks with a wet loofa.

The overwhelming sense of HMRC’s dismal inadequacy that emanated from the Select Committee performance, was compounded by the announcement that HMRC now intends to discuss the disputed issues with the police and Serious Fraud Office; followed by Grainger announcing a desire to “‘collaborate’ with other agencies” (BBC report, Kamal Ahmed). This late flurry of activity at the starting post, in a race already long run, scarcely inspires confidence; for we must consider this performance against a setting in which HMRC have had the Panorama evidence in the HSBC case since 2010; it also now appears that the FCA (the UK’s new, prime Financial Regulator) was not informed about the Swiss case, and it is now reported that in spite of the efforts of the original whistleblower (Hervé Falciani) who produced the Swiss evidence, nobody from HMRC has ever contacted him. Meanwhile the French tax authorities have recouped around €300m (circa £220m – source, Le Monde) from the French clients of the Swiss HSBC bank, against HMRC’s £135m recouped; but the comparison is worse, for the total number of French clients, and their capital sums involved were also significantly lower than the comparative British figures.

HMRC was keen in 2013 to trumpet an array of investment initiatives in anti-evasion, claiming proudly 2,500 “extra staff” and £1Bn Government investment to pursue evasion, which decisively closes off the last thin excuse for their poor performance; a lack of resource. Notably, however all this resource fails to deliver even a single quantified estimate of the financial loss to the UK Treasury through evasion; save only the memorably limp phrase that “there is no clear view of the cost of offshore evasion” (No Safe Haven; Exec. Summary, p.2). Or to put it more succinctly, £1Bn has been spent for virtually no perceived return. The best that can be said of HMRC’s futile endeavours (and wherever the balance of blame may rest between the Department of State, Government, or Parliament itself); as the UK’s policeman of first resort in offshore tax evasion, HMRC is a complete and expensive failure.

Most of HMRC’s planning has depended not on tough sanctions, but on bilateral arrangements and international treaties, most of which do not yet exist. It is reasonable to deduce from such slow and ineffective measures, or our appallingly lax history in the UK of failing to prosecute evasion vigorously, or closing avoidance loop-holes; that in Britain we are all suffering the inevitable consequences of casual British complacency, the glib mantra of ‘light-touch’ regulation being good for business, and over-indulgence toward ‘aggressive avoidance’ and even of indifference to systematic evasion over the last ten years or more. Indeed most of the issues identified in the HMRC ‘Action Plan’ (No Safe Haven, p.19) stretch out to 2017 or beyond before they expect them even to be fully implemented. By the time HMRC achieves anything, the evaders will no doubt have developed effective new secrets and new evasions, as perhaps may be deduced from Johannesen and Zucman’s paper on the G20 experience. On evasion, or on aggressive avoidance, glaciers move faster than HMRC, the British Government or our Parliament.

Why has the British Government and Parliament effectively treated ’Business’, especially ’Big Business’, as being above the law, or at least allowed it experimentally, stochastically and effectively to write its own law on tax avoidance? Why has evasion been treated almost as a minor peccadillo; not worthy of facing severe retributive justice, whatever the sums involved: the criminal sanctions that are generally held to deter more effectively than a fine or penalty, which merely increases the marginal cost of doing risky business, and reduces crime to a mere business calculation? It is time that the electorate began asking searching questions of their politicians: why have they totally failed the British people in devising a fair and equitable tax system, and why has this disreputable state of affairs been allowed to develop, and embarrass the good name of the British people?

On 11th February, 2015 at Prime Ministers’ Questions, as Parliament feigned indignant concern about the Panorama investigation, loudly if scarcely convincingly, and the web of recondite relationships between offshore financial activity, rich donors, political parties and lobbying resurfaced yet again; endlessly to circulate as a perpetual backdrop to the profound irrelevance of Westminster party ‘politics’ (which really should have allowed the penny to drop with the public by now), David Cameron resorted to making a statement that manages to plunge new depths of meaningless fatuity that even he rarely ventures: “no government has been tougher than this one in chasing down tax evasion and tax avoidance”. Really? Then we can all rest safe in the certain knowledge that the last vestiges of an equitable and fair tax system have finally been destroyed; what remains in force is tax-at-source, including PAYE, which is protected by the vice-like grip on income distribution exercised over ordinary people by HMRC, for Government. Here evasion is rare and the scope for avoidance much reduced and managed. It is the mechanism of payment that enforces this equity of treatment, not the equity of the underlying tax system.

What we have now discovered is that the underlying tax system itself is not fair or equitable; but rather just another exploitable business opportunity. For those outside PAYE, the tax they pay will ultimately depend at least in part on just how much disposable income they have, or how much they can afford to pay for advice; or even how far they are prepared to go in pursuit of unvarnished greed.



Categories: Economics

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32 replies

  1. Or more simply: The movers and shakers residing in Gotham City, are part of a vast criminal conspiracy intent on robbing UK society blind?

    The Mafia must wonder where they went wrong.

  2. I don’t think it’s that simple. If “tax avoidance” is defined as an individual or corporation taking advantage of legal arrangements to avoid paying tax, then want about the 50% of the British population who have taken out ISAs in order to avoid paying tax on the interest which would otherwise be due?

    At the moment, British citizens like you and me have already sheltered some £470 billion – yes, billion – from the taxman. I suspect that this level of tax avoidance is far beyond the amounts sheltered by “the ultra-rich” you mention.

    So when Tory donor Lord Fink said that “everyone does tax avoidance” he was of course pretty much correct.

    • Anton: The salient point as a matter of law is the use of the term ‘unintended’ (unfortunately absent from this article). Tax avoidance occurs when one exploits a loophole that Parliament did not intend to create, in order to avoid tax.
      ISA’s are actively encouraged by the State. Thus, taking out an ISA does not equal tax avoidance. Exploiting an arcane loophole with help from one of the Big Four (who, incidentally, help draft tax legislation) is tax avoidance, since (although ol’ Gideon seems to actively support tax avoidance personally) Parliament did not intend that those loopholes should be discovered, noticed or used when they created the legislation.

      • That’s rubbish.

        ISAs are a form of tax avoidance like any other. The ISA allows one to make the choice to save the money through a structure (as opposed to in a biscuit tin under the bed) where those savings are tax free i.e. you avoid paying tax.

        Whether ISAs are actively encouraged by the state, or whether loopholes are an unintended consequence of how legislation is drafted, is neither here nor there.

        ISAs are a form of tax avoidance

        And the ‘loopholes’ you refer to are tax avoidance.

        And that’s it.

      • Enquiring as a complete innocent in these matters, with neither existing ISAs, not the intention of acquiring any: in making them available tax-free, the Government presumably gains in some way? What happens to the money etc. lodged in an ISA? Money I deposit in a bank-account is available to the bank to use to make more money, give loans, etc. So is there any advantage to the Government/taxpayers in the existence of ISAs? Otherwise, what’s their purpose – other than to save account-holders tax?

  3. …Including, while I think of it, Margaret Hodge at the Public Accounts Committee and scourge of tax avoiders everywhere. Of course I’m not suggesting for a moment that she has done anything wrong or illegal, but her use of Family Trusts in connection with her family’s wealth would seem to suggest that she has an eye to tax liabilities. Normally. Family Trusts are used to avoid tax, but given her public pronouncements I’m sure that was not the reason in her case.

  4. Thank you for the comment. The difference is simple; ISAs are devised or approved by the Government (NS&I operate ISAs); they are deliberate, managed and clearly identified. The sums per individual are also relatively small. Premium Bonds fall into a similar category. Where did you find the idea this was “simple”? What is (over) “simple” is the glib proposition that there is an easy distinction to be made between avoidance and evasion that somehow solves the ‘problem’ with a neat piece of sophistry.

    Designer tax avoidance schemes are a quite different matter to the kind of simple, everyday schemes on offer to the general public. It offers a false analogy that is intended to draw the conclusion you have made; it is just everyday personal tax efficiency, nothing to see here. But it is not. With respect, I do not think you have grasped the scale of operation of tax havens or tax avoidance (such as international transfer pricing) in modern business, or their importance to the City of London. It is difficult to put figures on it for a simple reason; the information is usually secret and is not divulged. The EU’s estimate of €1 Trillion lost in tax evasion alone however is not to be easily dismissed.

    • No, I didn’t say it was simple. And yes, I do know about transfer pricing (which, incidentally, has nothing to do with tax havens, as you seem to suggest). And yes, the ISA sums per individual are relatively small. My point was that the total tax avoided is colossal, and that there is a great deal of hypocrisy involved in this debate – hence my (admittedly malicious) point about Margaret Hodge.

      But I cannot see how you can seem to claim that tax avoidance is OK in the case of individuals but not in the case of corporations, if I understand you correctly.

      You say that I may not have grasped the scale of international tax avoidance, while also admitting that this cannot be known. I can make no sense of this remark.

      Nor do I have any quarrel with the EU’s estimate of a trillion euros lost in tax evasion. But that’s not tax avoidance, so I can’t see the relevance of that statistic. ,

      • “I don’t think its that simple” appears to imply I was suggesting the matter was “simple”? My reference to transfer pricing was in the context of tax avoidance, not tax havens. Nor is my point to make a distinction between individuals or corporations either.

        There are levels of reasonable adjustments to be made for tax avoidance in any fair and equitable tax system; to encourage investment or savings, by offering tax-breaks. My objection is to tax avoidance schemes that have no investment purpose at all, but are merely designed to avoid tax altogether. They are there simply to defeat the tax system; hence it follows that the tax rates for everyone else require to be higher than necessary, depending on the effect of the scheme. Often such schemes are termed “aggressive tax avoidance”. Sometimes such schemes may be defeated by the courts, and what is presented as tax avoidance turns out to be evasion. More often schemes are not tested in court.

        It seems to me that the real ‘hypocrisy’ is the tendency of apologists for such schemes to claim that these schemes are no different from reasonable and equitable tax avoidance schemes, and hide behind the complexities. Parliament has failed even to address the issues and allowed the current ‘arrangements’ to run amok.

      • I should make it clear that the article covered tax havens, tax avoidance and tax evasion, and given the stress I place on the weakness of the distinction between avoidance and evasion, where the most intricate avoidance schemes are being devised, I cannot see the relevance of you desire simply to ignore evasion. I had thought my article was at least clear on the false distinction!

      • A. Because corporations can afford it (better than ordinary ISA holders can).
        B. Because ordinary ISA holders already pay their tax share through PAYE.
        C. Because corporations benefit from the security and utility of society that their businesses and their lives depend on, from medical care, police, through to toothpaste. So they ought to pay towards society.

        Or do you not believe there is such a thing as society?

    • “The sums per individual are relatively small”.

      So what? Those sums per individual added together make a very large amount.

      A very large amount of tax avoidance.

      ” a glib proposition that there is an easy distinction to be made between avoidance and evasion”

      It isn’t glib, it’s very simple.

      Tax avoidance = legal

      Tax evasion = illegal

      It’s not “sophistry”, it’s actually very simple.

      “Designer tax avoidance schemes are a quite different matter to the kind of simple, everyday schemes on offer to the general public”

      Fundamentally, no, they are the same.

      “They’re doing the same thing as everyone else is doing, except on a much bigger scale. Our evasion is absolutely fine, but their evasion is evil” or the classic “LOOK OVER THERE” logical fallacy.

      • I have not condoned any kind of tax evasion at any level anywhere in the article, or elsewhere in this thread. As for the rest of your ‘argument’; I am content to rest my case on what I have written, and allow readers to compare it with your case above.

  5. Interesting and informative, a bit of a slog for me, as I’m no tax expert. Nevertheless, I got the main thrust, which is, I think, big business and the super rich; aided and abetted by government, will still not pay their due. And the public will be screwed, again and again.

  6. I would recommend readingTreasure Islands by Nicholas Shaxson.

    • Would agree – an amazing and compleling insight into this scandal, and how its pivotal point is the City of London. That is why this crime exists and why those in power do not address it.

  7. offshore registered non tax paying private equity funds…..today own much of Scotland’s infrastructure and utilities – all thanks to Tory privatisation policies. Thank you Malcolm Riifkind. Nobody knows where their money comes from (maybe Colombia, Moscow, arms sales, drugs, Andy Murray, Ronaldo etc)…except the financial engineers fronting the funds. Lack of transparency its called. Fund investors are promised good returns for the borrowing of their cash, which means the consumer pays, via high charges. But don’t expect much in the way of investment in new infrastructure – that’s not what private equity funds are about. Anybody who wants more info should contact millionaire investment banker Lord Smith of Kelvin, ex MD of Deutsche Bank UK, chair of private equity SSE, chair of private equity Forth Ports, chair of……….etc…..etc.. (aka ‘Santa’s/Dave-boys little helper’). A guy surely worthy of a peerage……

  8. Big business and the super rich are not the only ones involved in tax evasion. The shadow economy is estimated at 10% of GDP in the UK. It’s probably happening in your own street. I’m associated with the building industry – self-builds and conversions. Many self-employed trades people still offer invoice or cash estimates and many clients take the cheaper option. Many self-employed who can do cash work are adept at keeping their taxable profits either below the 40% tax bracket or even below the threshold for class 4 NICs. Then there are the people who invoice including VAT when they are not even VAT registered. Then there are small business owners/directors who employ a family member to do nothing on a sub £10K part time salary, purely to take advantage of their tax free allowances. Then there are the same small business owners/directors who have their kitchens (or whatever) done up and put it though their business as repairs and renewals. The list can go on and on. Sorry, not taking a pop at building trades people .. just using this as an example.

  9. Anybody who has followed Private Eyes articles on the growth of the LLP industry will already have an insight into the tax avoidance/evasion business. There is one person who stands out in all of this, his fingerprints are all over it. Stand up and take a bow (vow) our Gordon soon to be Lord Brown of Fife.

  10. Saddenned to see the usual right wing unionist trolls doomsters condemning the minor ‘sins’ of the ordinary man whilst condoning the major sins of the mighty.

    Says all you need to know about this extreme right wing mindset that is enslaving the poor of Scotland. About their twisted values and priorities. The mighty are good, the poor evil.

    • Expressing evidenced views that are different to or even conflict with yours is not ‘trolling’.

      Honestly, this place is pathetic on this; anyone with the temerity to put forward an alternative view is a ‘troll’, ‘right wing unionist troll’ etc. etc.

      As far as I can see, no-one is ‘condemning’ anyone. Rather, they are pointing out obviously one-sided viewpoints, hyperbole, hypocrisy etc.

      Seriously, you need to grow up.

  11. John Warren: You argue that there is no real clarity between tax avoidance and tax evasion. Certainly there is an area of overlap which rests with the courts, but on a day to day basis I think we can all agree that tax avoidance (say, by way of an ISA) is completely different from tax evasion (say, by way of undeclared cash in hand income). Where’s the lack of clarity there?

    • There are well understood areas, for example Government approved schemes, where there is no issue; but the ‘grey area’ is more than an “overlap”; there is no clarity in the tax system; it is a byzantine mess, understood by few, open to exploitation by those who know that few avoidance schemes will ever be tested in court. This is not the trivial problem that you seem to think.

      it has been exploited by individuals and corporations on an industrial scale, and has been made easier in recent decades by the inertia and ideology of successive governments. It affects our economy, damages the capacity of government legitimately and equitably to raise tax revenues, distorts the intentions of parliament, undermines the credibility of the tax system, creates inequitable competitive advantages to large corporations over SMOs (through the capacity to shield profits in ways ‘de facto’ not open to all), and raises the tax burden on those who do not or cannot exploit the loopholes. It is a scandal, it is untenable and unsustainable, and it discredits parliament.

      • I’d agree with most of that.

        I think the main sticking point between us is that where you see “exploitation”, I see individuals and corporations responding in an entirely reasonable and rational way to legislation.

        Tax laws change behaviour, and are frequently put in place for specific social, political and economic reasons – raising taxes on tobacco, for example, in order discourage smoking, and lowering taxes on companies to encourage them to relocate and provide local employment.

        I realise you already know all this. But what sticks in my craw is the false naivety of those (not you) who claim that companies and individuals are at fault for reacting to legislation. I stand by my original point was that we all do that, and it’s no use blaming others for what we do ourselves.

    • Why, because you say I have to? I don’t think so.

      But that’s what you’d like, wouldn’t you, for any dissenting voice to be silenced.

      Isn’t that what you really want – fascist.

  12. An excellent and informative article. It’s just depressing that the law makers of this country, who have the power to change the system, are the very same people that are having their strings pulled by the mega-corporations that grease the wheels of Westminster. I would love to see and end to the lobbying culture in Westminster. Also, in my opinion, no political party should be allowed to accept donations from companies or individual donations of over £10000. I realise this is unrealistic – but surely a boy can dream.

    Lastly, I would like to say that the grammatical presentation of this latest article makes for much easier reading than your earlier contributions. I look forward to your next article.

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