As loyal readers know, whilst I am critical of HMRC I also regularly point out that much of the blame for HMRC's plight/performance and the shambles of a tax system that we have in this country lies with HMRC's political masters and their hypocrisy wrt tax avoidance etc.
The issue of politics and tax was brought up by John Cridland the Director General of the CBI last week, when he noted that the Government’s claimed pro-enterprise drive, including cutting the corporation tax rate from 28%c to 20% by 2015, is being muddied by its anti avoidance rhetoric directed against companies.
He was quoted by the Telegraph:
“Many UK CEOs of global businesses have had telephone calls from their global CEOs somewhere else on the planet saying, 'We are just a bit confused'.
On the one hand we see this drive to make the UK the most tax-competitive capital in the G20. On the other hand, politicians are increasingly critical of business in Britain as somehow not paying its fair share in tax.
That confusion of purpose – are we making the UK more tax competitive? Are we sending signals that somehow big business can’t be trusted? – needs reconciling.
But at the same time there’s a schizophrenia here.
Because when the Prime Minister said at Davos, 'Wake up and smell the coffee,’ he was talking to the wider international business community and particularly those operating in the UK.”
That being said, the CBI recognised that businesses need to do more to explain themselves; especially as many politicians have never done a days work in their lives in the real world, and are seemingly completely ignorant of the difference between turnover and profit.
“My message to business is … get on the front foot and make your case, because it’s not a bad case to make.Sadly I suspect the calls to the politicians will fall on deaf ears; the political pygmies that currently inhabit Westminster are dog whistle sound bite chasing individuals who do not lead from the front or by example, and who have no interest in simplifying the chronically complex tax system that we have in place in the his country.
My message to Government would be: constructively challenge us, but be clear what endgame you are looking for – which is [that] the UK is [seen as] a great place from which to do global business, and modern transparent tax arrangements that have no room for abuse are a critical part of that, and be clear on your signalling.”
Tax does have to be taxing.
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