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Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.
Wednesday, 4 November 2009
Don't Believe The Hype
As Dave Hartnett bestrides the net like a colossus, warning tax evaders that they may be banged up in jail, and HMRC gets "heavy" with tax avoidance schemes and offshore financial centres it may be worthwhile focusing on how much tax is actually lost as a result of offshore and onshore tax avoidance schemes (legal).
Last year the TUC conducted some research that they said proved that tax avoidance by the 50 largest companies in the FTSE 100 was depriving the Treasury of £11.8BN.
Deloittes decided to analyse the TUC's research, and concluded that it was bollocks. The amount of tax that the Treasury "loses" from companies using avoidance techniques and offshore tax havens is in fact less than £2BN.
In addition to Deloittes rubbishing the TUC claims, a recently published Treasury report into offshore tax havens (British Offshore Financial Centres) highlights the important role played by the Crown Dependencies in funding banks on the UK mainland.
Which is kind of ironic, given that HMRC and the Treasury have been vilifying these places for sometime now describing them as havens for "evil" tax avoiders and tax evaders.
The report notes that the Crown Dependencies make a "significant contribution to the liquidity of the UK market".
Given the parlous state of the Brown's Bankrupt Britain, and the fact that despite owning several banks the government appears to be powerless to increase bank lending (thus kickstarting a recovery), the liquidity provided by these offshore centres is even more vital to our embattled economy.
The report notes that in the second quarter of this year, they provided net funds to banks in the UK of £195BN.
Oh and what makes these offshore centres a magnate for inflows of money, that are then funnelled into the UK?
That would be their low tax rates!
The same low tax rates that our blinkered Treasury is telling them to raise.
Could it be that the Treasury and HMRC are trying to use tax avoidance and smear offshore financial centres, as diversionary tactic to take people's attention away from the Treasury's and HMRC's economic mismanagement and incompetence?
Tax does have to be taxing.
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