31st January 2013

Should five per cent appear too small, be thankful I don't take it all

Jimmy Carr is now not alone; Starbucks Google, Amazon and a raft of other global mega-businesses have recently been accused by the Public Accounts Committee of “immorally” minimising their UK tax bills.

 Do note the word ‘minimising’, and the fact that tax is being paid somewhere, just not much here in ‘Blighty”!

David Cameron speaking at World Economic Forum in Switzerland told big tax avoiders to “wake up and smell the coffee”, no doubt nicely primed by Grant Shapps who had said “I don’t think we’ve ever singled out a single company but I think that companies in this country need to pay their way.”

A very concerned Starbucks boss, Kris Engskoz, met with officials at No10 on 25^th January and it was later reported, although denied, that Starbucks would put on hold plans to invest £100million in the UK.

This upping of the anti in the politically driven “Tax morality Wars” is not a healthy one and once again politicians have plumbed new depths in the application of “selective morality” and dual standards in UK society.

These are the same politicians who decided to raid millions from pension funds, enforce a delay to the retirement plans of millions, hit motorists with excessive tax on tax, take the taxpayer for an illegal expenses ride, send our troops into danger then not look after them as they should when maimed or injured. I am sure there is a lot more that can be added too.

Of course, all businesses should pay the tax due, but it is also the responsibility of businesses to their shareholders to ensure profits are maximised and as long as the vast and complicated rules have been adhered to and taxes have been legally minimised and not illegally evaded, politicians should not be conducting such high profile witch-hunt’s or indeed any witch-hunts at all.

Politicians conveniently overlook the fact that UK plc has seen many very rich foreign nationals land on our shores as the UK tax regime is seen by them as being far more attractive than their own country’s. With this in mind, is their legitimately seeking out of a more tax friendly country to live in, all to the benefit of the UK, not a detrimental tax loss to the country they have left?

And what about those illegally in the UK, currently estimated to be as high as 863,000- larger than the population of Leeds? Many will not be contributing to the tax system, the government cannot even find most of them and they certainly have never published even an estimate of illegal immigration in the UK, saying that it is almost impossible to count unrecorded entries into the country.

Cameron overlooks in his “aroma” search the fact that the very businesses they hold up for moral derision employ thousands in the UK, all of those pay tax and NI.

If UK plc wants more to collect more tax revenues they should simplify the system.

They should also stop wasting so much of taxpayers money on welfare, bureaucracy, wars and mission creep toward more wars, aborted rail franchise bids and excessive, expensive, poorly thought out regulation that hampers so many of the businesses who create the wealth and profits that results in revenue to UK plc.

Only this week we learn that Britain's top taxman –accused by MPs of lying – has been hired by HSBC to advise it on honesty. The bank appointed Dave Hartnett, the former head of HMRC, as an adviser to ‘enforce the highest standards’ at the firm.

The decision to recruit the 61-year-old, described as Britain’s most ‘wined and dined’ civil servant who also sparked controversy over a total of 107 meals he enjoyed with corporate giants over a three-year period, was so sensitive that the Prime Minister had to rubber-stamp the former civil servant’s new job.

No morality issues there then David?

Clearly the the late George Harrison’s Beatles’ song Taxman provided the tax mantra checklist and it is as relevant today as it was then:

“If you drive a car, I'll tax the street,

If you try to sit, I'll tax your seat.

If you get too cold I'll tax the heat,

Now my advice for those who die

Declare the pennies on your eyes”

Panacea Comment