One side effect of Brexit and post Brexit Britain is that tax evasion is
back to being out of sight and out of sight. Now it may be a matter
of semantics and legality when it comes to the differences between tax evasion
from tax avoidance, one is a criminal act and one is permitted under the
law.
It is a matter of public record that our former PM was
against aggressive tax avoidance schemes. He was once pretty forthright in
stating that tax evasion is illegal, and that people can be prosecuted for
that, and people can go to prison – so his relative silence and inaction on tax
avoidance may be telling
It is also a matter of public record that the former Con Dem
government’s ideologically driven public sector spending seriously cut staffing
levels in HM revenue and Customs. The PM interestingly enough was firm enough
when it came to rejecting calls for particular individuals to be stripped of
public honours for wrongdoing.
Obviously from the perspective of the Westminster elite, if you started
stripping individuals of titles and honours for wrong doings, who knows where
it might end - even the possibility of former Conservative and former Labour and Lib
Dem party donors ending up embarrassed. Previously various Westminster
governments of various political hues have been more than a little half-hearted
when it comes to clamping down on tax avoidance or fiscal consolidation.
It has certainly gone quiet since TM’s pronouncements back in June 2016
about tax evasion and social justice, mind she has a lot on her plate
politically. The previous PM may have
slagged off celebrities, for using a tax avoidance scheme in Jersey. Yet he was
very reluctant to deal the tax havens that happen to be UK Crown Dependent
territories.
Successive Labour and Tory governments have regularly turned a blind eye
to this problem allowing the UK's tax gap to grow to an eye-watering £34
billion each year. Total fiscal consolidation over the
course of the 2010 – 2015 Parliamentary
term amounts to some £120 billion pounds, which gives an indication of the
scale of the scandal.
The last Labour UK Government (back in 2005) managed to merge the Inland
Revenue and Customs and Excise and then proceeded to cut a nearly a third of
jobs in five years (99,000 to 68,000). The party formerly known as
New Labour also happily slashed the budget for tackling the tax gap by nearly
50% (£3.6 bn to £1.9 bn) between 2006-10.
Now most reasonable people accept that there is a real
need to deal on a global basis with the problem of off-shore companies and
those individuals who are actively engaged in tax avoidance, tax evasion and /
or money laundering. It is all a little embarrassing as the UK is at the heart
of the problem and consciously chosen not to regulate its own crown dependencies
let alone the iffy if not criminal goings on in the City.
The scale of the on-going off-shore tax avoidance
problem can leave you breathless. The Cayman Islands are home to some 12,000
corporations yet have a resident population of 50,000. They were home to around
70% of the planets hedge funds (as of June 2012). The British Virgin Islands
with a population of some 22,000 people just happens to be home to some 823,502
registered companies.
General Electric who paid no tax in 2010, made a $14.2
billion dollar profit. Barclay's had 181 subsidiaries (as of June 2012)
registered in the Cayman Islands and paid little UK tax on its worldwide
profits. News Corp managed to base 152 subsidiaries in tax havens across the
planet (according to the US Government) and yet managed to pay no UK
corporation tax between 1998 and 1999.
Former US President Obama was 100% right to
suggest that the governments of the world should jointly tackle the issue
of tax evasion and tax havens. By tackling the tax havens, the tax
avoidance and the questionable dealings of the derivative traders, hedge funds
and the off balance sheet trading then we might go so way towards dealing with
the consequences of the worldwide financial crash.
The UK Government is in up to its neck in it when it comes to tax
evasion; it’s heavily involved in aiding and abetting tax evasion worldwide. Yet that nice Mr Cameron and the
other 18 millionaires in the cabinet pretty
much stalled when it comes to closing the tax loopholes.
The old scandal of HSBC’s Swiss accounts was but
the tip of a large iceberg. The British Virgin island (BVI) has incorporated
more than a million such offshore entities since it began marketing itself
worldwide in the 1980s. Company owners' true identities are never revealed.
Even the island's official financial regulators normally have no idea who is
behind them.
The British Foreign Office depends on the BVI's company licensing
revenue to subsidise this residual outpost of empire, while lawyers and
accountants in the City of London benefit from a lucrative trade as
intermediaries, claiming that the tax-free offshore companies provide
legitimate privacy.
Back in November 2012 a National
Audit Office report noted that HM
Revenue and Customs (HMRC) was struggling to curb aggressive tax avoidance
schemes that were costing the UK billions of pounds in lost tax. No doubt much
to the embarrassment of the Con Dems, tax evasion and tax evaders and the hunt
for their concealed cash is still a big issue in the USA.
In the UK you get the impression that various Westminster
governments (and perhaps the Party formerly known as New Labour) hope that the
issue of unpaid tax, will quietly go away. The US government has actively
pursued tax evaders, both foreign and domestic, yet in the UK, Westminster Governments has reduced the number of staff in Revenue and
Customs from around 100,000 to 65,000 and aims to further reduce the numbers to
around 50,000 by 2015.
British Overseas territories, including the Cayman Islands, help to hide
around trillions from pounds from the different nation’s tax authorities. Deep
in the belly of the beast lies the City, which may explain Cameron’s reluctance
to do anything about the problem as some of the city banks are hand in
glove with drug dealers, dictators, rogue states and terrorists when it
comes to money laundering and
perhaps offers comfy lucrative seats on the board to former Westminster politicians.
Plaid Cymru will not compromise on its commitment to tackling tax
evasion. Tax evasion, tax avoidance or fiscal consolidation has resulted in
vast sums of money being squirrelled away. Plaid believes that taxes should be
collected properly and invested in vital public services such as health and
education. The Westminster based parties, perhaps seeking future post
Westminster employment, may wish to appease the City bankers and their wealthy
backers, but Plaid Cymru believes in putting Welsh communities first.
No comments:
Post a Comment