Consider the [Scotish] question ...

... found at para 483, page 535 of Scotland's White Paper on Independence.

Question.

Will we have the power to reduce VAT on repair and maintenance work to dwellings in an independent Scotland?

Independence will enable the Scottish Parliament to explore a reduction in VAT on repairs and maintenance work to homes as part of wider taxation priorities.
Powers over VAT, currently exercised by the Westminster Government, will transfer to the Scottish Parliament as a result of independence. The tax system in place immediately before independence will be inherited at that time. Thereafter decisions on the tax system and all specific taxes – including tax rates, allowances and credits for VAT and other taxes – will be made by the parliament and government of an independent Scotland.

The answer from Salmon and chums is Yes-No, we can but we cannot, we might but might not ...

The White Paper is a gift to the "Better Together" campaign, do they realise it ?

... taxes, what taxes ?

It's all to play for in Wales with devolved taxes.

... or is it a dastardly plan to derail political Wales ?

Hillary Clinton is right and wrong ...

... when she said "... make the rich pay more tax".  Although such a strident call will appeal to the radical political left.

It comes across better when she expanded her thoughts with "... there are rich people everywhere and yet they do not contribute to the growth of their own countries".  This type of rhetoric will stir the blood of societies poor.

She further elaborated during a glittering New York conference by saying "... one of the issues that I have been preaching about around the world is collecting taxes in an equitable manner, especially from the elites in every country".  People are becoming a little more comfortable with the notion.

With three sentences she appealed to probably 70% (my guess based on anecdotal evidence) of the population, but the most important offering is the third when she used the term "equitable manner", it is an expression that seems to be underpinned with fairness.

This is not socialism, that political concept is dead and buried, it is "Stakeholder Politics" where everyone contributes to everything, not equally .... but not disproportionately, where rewards are proportional in a country where people are able to do more than just survive, and a country where everyone has the opportunity to achieve their full potential.

Is she telling the electorate they are "stakeholders", interesting times for the peoples of the USA, interesting times for the Republican Party, can they ever win where the vast majority realize they will never have a stake in the USA when the Republican  Party is in the White House.


We have issues in the UK, a senior tax lawyer might tell you to "leave before we set the dogs on you", referring to a well-spoken band of undercover protesters known as "The Intruders" as "trespassing scum", all because you might not approve of people such as ...


... the former HMRC boss Dave Hartnett,   The Intruders presented Mr Hartnett with a spoof "Golden Handshake" gong, the group were ejected by a dinner guest who called them "trespassing scum". A video of their exploits went viral yesterday on YouTube. Under Mr Hartnett's watch, HMRC was accused of agreeing "sweetheart deals" with major corporations such as Goldman Sachs and Vodafone. A Public Accounts Committee report criticised Mr Hartnett for being "too cosy" with big business. He was accused of signing off on a deal that saved Goldman Sachs £20m in tax payments and another which cut Vodafone's tax bill from £8bn to £1.25bn.


What chance the little people of the UK when our taxman was Dave Hartnett, we need a Hillary in Downing Street, but more than Hillary we need UK businesses to pay their unavoidable taxes, is that wishful thinking ?

... two views, two ...

... quite different perspectives !

The UK government through its Chancellor of the Exchequer George Osborne said the rich of the UK pay sufficient into the tax pool, check out the figures ...

... almost 90% of tax take is paid by the top 50% of the income groups.

This particular coin has a very different other side, the wealth of the top 50% ...

... dwarfs the wealth of the bottom 50%.

You might say that the wealth has been earned therefore such comparisons should not be made, as George Osborne said ...

... beware of "driving away" the UK's "wealth creators"

I have this feeling that our politicians are not being particularly honest with the electorate.

Is it the politics of envy to ask the top 50% of taxpayers to contribute a little more to pay for the poverty that underpins their wealth, Is it true that if taxes increased for the wealthiest 50% they would depart our small island leaving an unfilled vacuum ...

Or could it be true that the top 50% of taxpayers exist because of the production of the little people at the bottom of the pile, could it be true that an economic vacuum cannot exist except in the empty minds of politicians.

It's not necessary to invoke the politics of envy to right an obvious wrong, it is important to maintain a culture where aspiration is a motivating factor ...

... but it's equally important that we do not have a social underclass as a foundation of society.

Economic Justice is as important as Criminal Justice.

Apple or Scott McKenzie ...

... are both in the news, innovative Apple and the harmonies of Scott McKenzie who died a few days ago.

Scott is remembered here ....


... whilst Apple is reported in today's news as :

... the most valuable company ever !

... as reported in the Telegraph.

There is no dispute that Apple is an icon of the age, there is little dispute that its success will probably outlive the fan-base of Scott McKenzie ...

... but when will Apple pay its taxes to the peoples of the USA, that's the big question that neither Washington nor the little people of the States seem to be asking in a voice loud enough to be heard, strange ....

... in Wales politics seems to have become a dry husk ........... no change there !

Sunday 2 - Apple dilemma, a cash crisis !

Not the usual cash crisis that the little people face when they are unable to feed their families, not the cash crisis of a company competing on an uneven playing field, this is the cash crisis of a company that has not paid its tax due to the US treasury ...

... currently a potential (estimated) $25 billion in back taxes.

For those not able to read the Sunday Times report by Simon Duke .......

APPLE’S CASH CRISIS*
The tech giant must find a way to spend its $117bn pile and deal with threats to its dominance.
With his dark jeans, open-neck navy blue shirt and matching sports jacket, Tim Cook had assumed the mantle of Silicon Valley kingpin with ease.



At a meeting of technology executives in late May, the chief executive of Apple made it plain he expects other West Coast traditions to be upheld.
Under Cook’s command, the culture of mystery that helped transform Apple from a basket case into the world’s richest company was to be strengthened. The iPhone maker would “double down” the air of secrecy created by his predecessor, the late Steve Jobs. And all the more so where takeovers were involved.
“We buy companies. We don’t like to make it public,” Cook told his high- powered audience. “If I don’t have to, I won’t.”   The 51-year-old has lived up to his word. Just two months after this bold declaration, Cook didn’t bother to release a press release when he splashed out $356m (£228m) on a company that produces fingerprint recognition technology.
For the typical chief executive, a deal of this size would be a serious gamble, garlanded with corporate spin to win over investors. Not for Cook. With Apple banking almost $1 billion a week, the takeover of Authentic ate up less than two working days’ profit.
Like a latter-day Croesus, he has almost limitless resources at his disposal; he could buy almost any company on the planet before hitting the bottom of Apple’s war chest. With $ 117 billion ( and counting) in the bank, the cash hoard is larger than the market value of Glaxo Smith Kline, one of Britain’s largest businesses and the 33rd most valuable company in the world.
Cook, it would seem, is sitting pretty a year after succeeding Jobs. However, he is facing a critical test next month with the launch of a new iPhone.
For the first time, Apple will be leaping ahead without the creative imprimatur of Jobs, who lost his battle with pancreatic cancer in October.
Cook cannot afford any slip-ups if Apple is to maintain its supremacy. Rivals are already making inroads — Samsung, the South Korean electronics giant, sold twice as many high- end phones as Apple in the second quarter. The two companies are now slugging it out in a Californian courtroom over a multi-billion dollar patent infringement case.
Cook has not been afraid to show an independent streak. Breaking ranks with Jobs, who was set against returning money to shareholders, he has launched a $10 billion share buy-back plan and sanctioned Apple’s first dividend since 1995. He is also showing a thirst for takeovers. Apart from the Authentic deal, Apple has held talks with Twitter about a significant investment in the short-messaging service.
Although Cook’s $117 billion piggy bank is the envy of the industry, a cash crisis has begun to afflict Apple. The bulk of its money is trapped overseas — out of reach of the tax-man but also the company’s shareholders. The shining star of America’s tech industry isn’t prepared to hand over some £ 25 billion in back taxes to bring its riches home. In a courtroom in down-town San Jose, the self-styled capital of Silicon Valley, a middle-aged man with long hair and an untidy, grey- flecked beard launched a tirade against a perceived enemy.
“We’ve been ripped off, it’s plain to see. It’s offensive,” he protested.
It may sound like a domestic dispute or a street robbery, but the furious attack in fact came from one of the most respected figures in the tech industry.
Christopher Stringer, a long-time Apple designer who worked on the original iPhone, gave his explosive testimony during the opening skirmishes of the lawsuit that Apple has brought against Samsung.
It has accused the Korean rival of copying iPhone and iPad designs and is seeking damages of $2.5 billion.
Apple’s design team is a group of 16 “maniacal individuals” whose job is to “imagine products that don’t exist and guide them to life”, Stringer said. When Samsung started to “rip off” his pioneering ideas soon after the 2007 launch of the iPhone, it was hard not to quell the anger, he told the court.
Samsung rejects the charges. “This is not some copyist, some Johnny- come- lately doing knock-offs,” its lawyer said.
The case is just one flank in a worldwide legal battle between Apple and handset makers that use Google’s Android operating system to win control of the booming smartphone market. In addition to damages, Apple is seeking to have copycat products removed from the shelves around the world.
The stakes are enormously high. According to documents filed with the court, Apple earns a profit of as much as 58% on each and every iPhone shipped. At an average wholesale price of $650, that means the company has generated earnings of nearly $100 billion from the ground- breaking smart-phone since 2007.
In the current year alone, the iPhone is forecast to bring in earnings of $ 30 billion — equivalent to two- thirds of Apple’s expected profits. By contrast, the iPad contributes a modest 15% to the bottom line.
With Apple’s fortunes so tightly tethered to the iPhone, investors were unnerved by the second-quarter results.
Operating profits may have jumped 23% to $ 11.6 billion between April and June, but that fell short of the vertiginous growth rates Wall Street has come to expect.
Worrying soft patches have emerged. Sales in China, for instance, tumbled 28% compared with the previous quarter. Though an estimated 270m people in China can now afford to own an iPhone or iPad, sales of cheaper Android handsets are becoming the staple in the world’s second largest economy.
Europe’s economic woes also took a toll. Sales in France, Greece and Italy were “particularly poor”, Cook admitted, while the historically resilient German market registered growth of mere “single-digits”.
Much of the disappointment can be attributed to Apple’s savvy customers. The company may officially keep its own counsel on the timing of its next big launch, but it ticks like a metronome. The iPhone is reinvented every autumn, so Apple fans hold back in the spring and summer before upgrading.
There are reasons to fear that this pattern may be disrupted. For one thing, rivals are finally catching up. By fair means or foul, the third version of Samsung’s latest Galaxy handset has become a formidable competitor to the iPhone. Although badly wounded by Apple’s domination, Nokia and BlackBerry are fighting back.
Whether the Californian behemoth can continue spewing out profits will become clearer on September 12, when Cook is set to unveil the company’s latest iPhone.
As well as a better camera, a higher-resolution screen and a more powerful processor, it is expected to work on new super-fast mobile phone networks that offer lightning- quick downloads on the move. Although these fourth-generation services won’t be launched in Britain until next year, they are being rolled out rapidly in American, Scandinavia, Germany and developed Asian economies such as South Korea and Japan.
Other factors are likely to work in Apple’s favour. The new iPhone will be widely available for the Christmas gift-buying season in the West and for the Chinese new year. More importantly, the combination of the iTunes and Apps stores is locking customers into Apple’s devices.
“The great majority of iPhone users intend their next phone to be another iPhone. No other brand has the same loyalty,” said Benedict Evans of Enders Analysis, the research service. STEVE JOBS offers an object lesson in how fast and fickle the technology industry can be. Apple, founded by him and Steve Wozniak in 1976, was floundering by the mid-1990s. Close to bankruptcy, the once pioneering firm re-hired Jobs as chief executive in 1997, 12 years after he had quit.
Within 12 months, he had overseen the launch of the iMac personal computer. The sleek desktop was a hit with consumers but greater successes were soon to come. The iPod and then the iPhone not only turned the music and mobile phone markets upside down but transformed Apple into the most powerful and richest company in the world.
Cook and Stringer, the design guru who has spent nearly two decades at Apple, know all too well that the tech industry is brutal and the lifespan of world-beating companies can be pitifully short. As the decline of Yahoo and AOL has shown, the apparently impregnable are in reality never more than one false step from falling into irrelevance or worse.
Apple at least has the comfort of a thick cash blanket to keep ahead of its rivals. After Facebook’s calamitous float, Cook’s interest in investing in Twitter has waned. His company has the means to buy a Hollywood studio, such as Disney, to bolster the television set it is rumoured to be launching next year.
Great riches, though, are rarely the panacea they seem.
About $80 billion of Apple’s wealth is held in a gnarly web of foreign subsidiaries, where it is shielded from the US tax-man. To bring it home, the company would have to pay an estimated $25 billion in back taxes.
Because of this enormous potential bill, the treasure is effectively trapped abroad, with Apple unable to return the cash to investors or use it to fund American takeover deals.
Unless Cook solves this conundrum, he could be crushed by the burden of inherited wealth.

That $25 billion represents the stake that the US taxpayers have in Apple, this money rightfully belongs to the people, the little people who are the unregistered stakeholders ............

behind every ...

... great fortune lies a great crime, Honoré de Balzac.


And what a crime, $21 trillion (£13tn) crime, a crime as big as the combined economies of the USA and Japan.  Fortunes created on the backs of populations pushed beyond the reach of taxation, beyond the reach of the societies that created these buckets of coin hoarded by such a very few people.

In the USA there is the Apple Corporation that holds its wealth offshore, it avoids paying the taxes that could pay for healthcare for the poorest in its society, in the UK we have similar crimes where companies and individuals establish off-shore vehicles to avoid passing back to society a share of the wealth created by the little people in the form of taxes.

The misconception is the owners of capital are wholly entitled to every penny of the surplus (profit) a business makes, this conveniently avoids any responsibility for poverty level wages that require redistributed government expenditure (taxes and borrowings) to pay for subsidised housing, healthcare, education ....... the list is endless.

All profits, as with income, should be taxed at source where it was made .... that way every fortune will have avoided the stigma that ...

... "behind every great fortune lies a great crime".

... and the taxes will help the little people that they might live without the poverty that seems to accompany great fortunes !

These crimes are not restricted to the USA and the UK, the people of Germany, Canada, France, Australia, Japan, China, India ............ are all losers in this great crime of "cheat the people of their dues".

The BBC staff who cheat ...

... the little people of the taxes they refuse to pay, and the HM Revenue & Customs (HMRC) who have turned a blind eye to this new class of cheats, when decades ago they prevented the carpenter or mason of Manchester or Glasgow from doing exactly the same.

The story of the week is from The Sunday Times written by Dipesh Gadher

TWO BBC managers earning six-figure sums could have avoided paying thousands of pounds in income tax by being kept off the corporation’s books for up to three years.

The managers, who are involved in training other BBC staff, were left off the payroll and instead received more than £100,000 a year through personal service companies (PSCs). 

They were added to the Paye system only this month — days before the BBC’s finance chief was questioned by an influential committee of MPs. 

Workers who are paid through a service company can legally minimise their contributions to the exchequer. Instead of paying income tax at a rate of 40-50p, they can be liable for corporation tax at 20% on profits of up to £300,000. 

The arrangement also means that the BBC does not have to pay National Insurance contributions for the worker. 

Last week the BBC admitted that 467 of its broadcasters — including 148 news presenters — were paid through PSCs. Many are kept off the payroll even though the corporation is their main employer and they are regarded as the “face” of the BBC.  Presenters who have set up companies through which they are believed to channel their earnings include Jeremy Paxman, the host of Newsnight, and Fiona Bruce, the newsreader. Joanna Gosling, a newscaster who is married to Craig Oliver, the prime minister’s head of communications, is paid through a PSC. There is no suggestion that any of the stars have avoided tax. Among the 25,000 freelance contracts the BBC signs each year, 3,000 involve behind-thescenes workers being paid through companies. Margaret Hodge, the Labour chairwoman of the Commons public accounts committee, which examined the practice last week, said the tax arrangements used by the BBC did not seem “morally right”.

The BBC says that, like all other workers paid through PSCs, details of their fees and companies would have been passed to HMRC.

Those people who make their money from outing the tax avoiders are no better than those other wealthy people who decide not to pay their legal share of taxes.

Pot calling the kettle black, scum every one of them, time for a British Tax Spring ...........

........... or time to turn away from the programmes they host !


If it is not allowed for Mr Jones the carpenter of Cardiff or Belfast it shouldn't be allowed for anyone else !

The borrowers ...

... of Wales, no film script, its the real thing, WAG wants to borrow £ billions.

The big question is how do the politicians propose to fund their political "retail" therapy, by repaying from the £15 billion block grant, or by joining the Big Society with a local income tax.

Financially there is little to choose between payment from the block grant and payment from a local income tax, both are the means to an end, but democratically the difference is between night and day, chalk and cheese, it puts final approval of spending where it should be, at the ballot box.

So David Cameron, give them borrowing powers coupled to tax raising powers, let them be accountable via the ballot box.

Nothing tears a society apart faster ...

... than the perception of a tax burden unshared,

... for the aficionados of social revolution remember the American and French revolutions.

... as Ben Macintyre writes today

When tax loopholes were in-wall, not offshore ...

... Georgian window-blockers were the Jimmy Carrs of their day — only more visible

When you use the term “daylight robbery” you are invoking a 17th-century British tax and a tax avoidance scheme still visible in many parts of Britain. In 1697 Parliament introduced a tax on windows to defray the expense of the new mint. Householders would henceforth pay a tax proportional to the number of windows they owned. 

The window tax was intended to be progressive. Individuals with large houses would logically pay most and, as windows were visible from the outside, calculating the return should have been easy. It proved to be very difficult. Middle-class and wealthy homeowners simply boarded up some, and in a few cases all, of their windows, permanently or temporarily, to avoid paying what they owed. 

Today one still sees elegant Georgian houses with bricked-up windows, visible testimony to the temptations of tax avoidance; these buildings belonged to the Jimmy Carrs of their day, employing a ruse that was perfectly legal but contrary to the social contract that underpins all taxation. 

Owners of large properties could easily reduce their tax burden by bricking up a few windows, but those with smaller houses could only do so by forfeiting air and natural light. As a result, houses were built with fewer windows and health experts predicted epidemics caused by lack of fresh air. The most annoying aspect was the brazen and visible way richer avoiders went about skirting the tax: windows became tax loopholes and everyone could see who was dodging tax. The levy was finally repealed, denounced as a “tax on light” and nothing less than “daylight robbery”. 

This week Graham Aaronson, the lawyer brought in by David Cameron to explore ways to combat tax avoidance, warned of “riots on the streets” if tax-dodgers get away with it. That may sound like hyperbole, but from a historical perspective he is entirely correct: an abused tax system, in which the poor dutifully cough up but the rich get away without paying their share, is the fuel of revolution. 

Down the centuries the authorities have come up with elaborate ways to extract money from society, with taxes on individual wealth, numbers of female servants, hearths, watches, dogs and salt. Peter the Great taxed beards, beehives, basements, hats, birth, marriage and death. The Roman emperor Vespasian imposed a tax on urine ( vectigal urinae), which was used to dye togas, in public urinals: this was the first and last Pee As You Earn system, raising the possibility of bladder control as a tax avoidance scheme. 

Tax is a test of character, and always has been. As Plato wrote: “When there is an income tax, the just man will pay more and the unjust less on the same amount of income.” 

Taxes are never popular, but become socially destructive when it is perceived that the broad mass of people have to pay, while a privileged few avoid their dues. Leona Helmsley, the American hotelier and convicted tax evader, was heard to observe: “We don’t pay taxes. Only the little people pay taxes . . .” 

That remark crystallised the deep and dangerous social dislocation in 1980s New York because, in addition to being stupid and unpleasant, it happened to be true. 

George Osborne says he regards “tax evasion and indeed aggressive tax avoidance as morally repugnant”. But beyond the ethical argument lies the social and political cost: nothing tears a society apart faster than the perception of a tax burden unshared. 

It is no coincidence that those European countries facing the most serious economic problems and social unrest also have the highest rates of tax evasion. Silvio Berlusconi once said that because of high tax rates in Italy, evasion was seen as a “natural right”. The Federation of Greek Industries estimates that the Greek Government is losing as much as $30 billion a year through tax evasion. 

The Greek system is shot through with loopholes: singers, athletes and various professionals all receive favourable rates, and shipping tycoons pay no income tax at all. Some Athens doctors report unfeasibly low incomes while enjoying a life of swimming pools and yachts, evidence as blatant as a bricked-up Georgian window. 

If a tax system is corrupt and biased, it inevitably erodes the vital “social compliance” that comes not from fear of getting caught, but from a sense of communal obligation; governments must increase taxes to make up the difference, increasing the burden on those who pay and their righteous fury at those who don’t. The social bonds that hold society together begin to fray. 

Britain has a long history of rebelling against taxes seen as unfair. Boadicea was said to have led the Iceni in revolt partly in opposition to punitive Roman taxes. Lady Godiva’s naked equestrianism, according to legend, was a protest against oppressive taxes levied by her husband on the people of Coventry. When taxes are perceived as unjust, Britons tend to protest violently or vanish from the tax rolls. Three years after introducing the poll tax of 1377, the authorities attempted to levy another and found the population had miraculously dropped by half a million. 

The 1990 poll tax riots demonstrated what the “little people” will do when faced with a deeply regressive tax that suddenly left many poor families with greatly increased bills. With up to 30 per cent of the population refusing to pay in some areas, the civil unrest and street protests played a big part in the fall of Margaret Thatcher. 

We “little people” will not take to the streets today just because a handful of comedians and pop stars have worked out a legal way to cling on to more of their vast fortunes. Yet Mr Aaronson is right that such practices have a toxic effect on society, gradually eroding faith in fairness. 

Whenever a rich man boards up his windows or slips his money offshore, the rumble of anger over “daylight robbery” intensifies and society grows a little darker.  

The single important ...

..quality the non-dom should expect to pay for, and it's not our NHS or social security safety ...

Alice Thomson writes in today's Times ...

The Chancellor must scrap their bizarre hereditary status, then make them pay fair taxes ...

...They are our guests. We should be flattered that they have chosen to live here rather than anywhere else in the world. They tend to use private schools and private GPs. They employ nannies, chauffeurs and endless builders as they convert their basements into swimming pools. They buy £500 Laboutin shoes — think of the VAT on those — and they give employment to our bright graduates as tutors to their children. Britain’s 200,000 non-doms are an asset to our country.

.............................

These aren’t people who will flounder if the Government toughens up the rules. The Treasury should look to America, where above the entrance to the US Internal Revenue Service in Washington are Oliver Wendell Holmes’s words: “Taxes are what we pay for civilised society.” The wealthy come to Britain because it is civilised. They need to pay to keep it that way. 

... it's not the swimming pools or preference for Laboutin shoes that interests me, it is those that claim the non-dom status fail to pay the piper in full, the £30,000 a year (rising to £50,000) entrance fee to the UK fails to account for the sacrifices that the peoples of the UK have made, made so that it is possible for this relatively small group of people can enjoy democracy without the Mafia, either Italian or Russian, democracy needs paying for ....

... by all, including the Non-dom.

... in full.

Is it secrecy ...

... that makes our tax system unfair, as Margaret Hodge Labour MP wrote in today's Times ...

She believes ... "If the tax-man was made accountable, we could crack down on avoidance with more vigour."

The MP who is Chair of the Public Accounts Committee continued ...

We in Britain pride ourselves on playing by the rules. Yet on paying tax we appear to have a blind spot. Tax demands are seen as an aggravating irritant, not a positive contribution to be valued. We all too easily choose to forget the link between every citizen paying his or her fair share, and the vital infrastructure and services on which we all depend.

Of course there are legitimate concerns about whether the State provides value for our money but these cannot justify individuals or companies seeking out wheezes designed simply to avoid paying their rightful contribution. Some of the practices highlighted by The Times wouldn’t look out of place in a banana republic.

Securing every penny of tax due is especially important when cutting the deficit is the policy imperative. In 2009/2010 Her Majesty’s Revenue and Customs calculated the tax gap as £35 billion — ie, nearly 8 per cent of all tax due is not being collected. In the same year HMRC wrote off £10.9 billion in tax as uncollectable.

The problem of avoidance is not confined to the private sector. Earlier this year we learnt that the head of the Student Loans Company was having his £182,000 salary package paid through a personal company, thus avoiding PAYE and national insurance contributions. Thousands of other public sector employees were doing the same. While the Government responded promptly to close these loopholes for civil servants, there are still people funded by the taxpayer, working in local authorities and for the BBC, who avoid paying tax in this way. This is not on. The Public Accounts Committee (PAC) will report on this issue in the next few weeks. And we will also want to look at the loopholes uncovered by The Times.

This week the vexed issue of how HMRC deals with disputes with major corporations such as Goldman Sachs and Vodafone will return. Large companies owe up to £25 billion and the National Audit Office (NAO) will report on five cases examined by a retired judge with experience of tax litigation. Some of these disputes have been mouldering unresolved for 20 years. While the NAO found the settlements in these cases to be not unreasonable, it remains the case that big companies are let off millions of pounds in interest payments while small businesses are fiercely pursued for every penny.

Everybody has been quick to condemn the tax avoidance scams revealed by The Times as morally repugnant. But actions speak louder than words. We should rip off the shroud of secrecy. There is a strong case for the tax affairs of publicly quoted companies to be opened to public account so that we know about their negotiations with HMRC and don’t just see the final settlement in the company’s accounts. We could then know how Vodafone or Amazon choose to arrange their tax affairs, and that may influence how we spend our money when we buy a phone or book.

We also have to strengthen the accountability of HMRC. Hiding behind taxpayer confidentiality is no excuse for it failing to account for itself to Parliament or the public for the work it does. It was only because of evidence from a whistleblower that the PAC uncovered the Goldman Sachs scandal, in which £10 million was lost to the taxpayer because of an error. The public still doesn’t know why there were only three challenges by tax officials to the K2 arrangements in eight years.

If HMRC was made more accountable, there would be stronger pressure on it to pursue disputes or deal with loopholes robustly and not be swayed by pressure from companies or individuals. Because of the HMRC’s secrecy, a small cohort of tax advisers know much more about its compromises than outsiders do and use their inside knowledge to help other businesses to avoid tax.

We can do more to prevent abuses by companies who benefit from public contracts. For instance, the PAC has identified PFI contractors that are providing hospitals and schools that have taken their companies offshore to avoid tax. A simple rewrite of future contracts or a threat to stop companies that deliberately avoid tax from getting new public contracts could bring this practice quickly to a halt.

Clearly, we should simplify our tax system. Tax avoidance and evasion is less of a problem in Australia and New Zealand, where governments have simplified. And surely we should all be able to understand our tax returns so that we can take proper responsibility for what we do? It’s ridiculous that the present, inaccessible system can only be navigated by tax experts.

HMRC must be properly resourced. The previous Government cut HMRC staff working on avoidance and evasion by more than 3,000, although every pound invested in people secures £10 in tax revenue. It is outrageous that so often rich individuals and corporations are able to outwit the tax authorities because they have well-paid advisers who are better equipped than the HMRC.

When the PAC looked at the Goldman Sachs settlement, we were surprised that the Head of Tax was the only senior person with “deep knowledge” of tax to authorise that deal. The Civil Service tradition of employing generalists means that we have too few specialists who can take on the private sector’s accountants.

A country’s tax system ought to reflect the values and priorities of that society. If the wealthiest pay as little as 1 per cent tax, and corporations even less, that is an offence against the values and sense of fairness of ordinary people. Our tax system encourages morally repugnant behaviour. It must change.

So, according to parliament it is none of their doing, I've met people such as these during my life, this is the "its always someone else's fault" brigade.



Unfortunately for Westminster the taxpayers, the public, the voters, we all know otherwise.  Each and every tax avoidance scheme has the tacit approval of our parliamentary representatives because they have chosen not to fix them.

There is no justice where the poor of Anglesey (these are the poorest in Great Britain) pay a greater percentage of their income as tax than the wealthiest in the land.

Something smells very bad, and it wafts across the Thames ....

It's a scandal ...

... he said, the fact that housing benefit in the United Kingdom costs the taxpayers £2 Billion every year.

For the many thousands of people from across the world who visit my blog each week, housing benefit in the UK is described here .... and here.

It was David Cameron that believes the £2 Billion annual cost to be a scandal, I agree with him, but for very different reasons ...

To qualify for this benefit you will be either without work, or have a job with such low pay (full or part-time) that you will not survive without the taxpayers transferring part of their earnings through taxation.

No doubt there are those in society that abuse the system, but on reflection, industry has a need to answer the allegation that they abuse their employees by paying wages that require benefits to exist.

Who commits the crime, the individual without the job needing a home for his or frequently her family, or those who created this world that imposes the need for taxpayers subsidy ?

When you see an elephant ...

... on your doorstep, you know it's there .............

............. this elephant is bigger than Magna Carta, my guess is it will not go away until taxation is completely reformed so that all earnings made in the UK are taxed for the benefit of all those stakeholders in the UK ............. Mr. Cameron.

A small point, society is quite tired of a new aristocracy sitting on the shoulders of hard working people.


The 38-year tax backlog reported in today's (£) Times :

Alex Spence, Alice Thomson and Rachel Sylvester June 23 2012

 

Billions of pounds of potential revenue is tied up in more than 20,000 tax tribunal cases because the Government lacks the resources to deal with them promptly, tax experts have told The Times.

An internal estimate by Revenue and Customs claims that the backlog would take 38 years to clear at the present rate. Interviews with current and former Revenue staff, and lawyers and accountants who advise wealthy taxpayers, have portrayed a department that is struggling to cope with mounting pressure to stop big companies and the rich from avoiding their tax bills. The claims come after it was revealed this week that a host of wealthy people, including footballers, financiers and celebrities, continue to use avoidance schemes to reduce their income tax, despite HMRC increasingly challenging such arrangements.

One of Britain’s most successful businessmen is increasing the pressure today on the Government to produce a tax law that is fair for all. In an interview with The Times, the former chief executive of Tesco Sir Terry Leahy says that if there is unhappiness with the law “then the answer is to change the law”.

He also attacks the status of non-domiciles, who avoid paying full tax in this country by being registered abroad.

“There’s an insulated international group of people,” he says. “I’m slightly puzzled by the UK’s generous treatment of foreign residents. I’m for lower tax but I’d start with British citizens. Why should a non-British person have a better tax treatment from the British authorities than a British person?”

Among the concerns highlighted by the tax experts were:

• Some wealthy taxpayers whose arrangements have been challenged by HMRC are playing “hardball” in negotiations, in the expectation that the taxman will have to start making deals to clear unresolved cases;

• HMRC has a disproportionate number of senior staff close to retirement and not enough capable junior employees to replace them;

• Work by HMRC’s elite specialist investigations unit, which handles the toughest avoidance cases, has deteriorated in recent years, according to some sources;

• Staff cuts and defections have left HMRC with not enough fully-trained tax inspectors. Overall staff numbers are likely to fall to 55,000 by 2015, down from about 100,000 in 2005;

• Morale at HMRC is at rock-bottom, with staff frustrated about the lack of resources, pay freezes, cuts to their pensions and a lack of promotion opportunities. The Association of Revenue & Customs, which represents senior staff, claims that this is a “ticking timebomb” that could lead to a wave of defections to the private sector.

Industry and HMRC insiders said that the strain on resources was undermining progress in recent years on cutting evasion. Ian Hyde, a partner at the law firm Pinsent Masons, said: “HMRC is beset by poor morale, high staff turnover, budget cuts, and a lack of quality when it comes to training and knowledge.”

However, a senior source at HMRC blamed the tribunal system, rather than cuts, for undermining the fight against tax dodgers. “We can’t control the tribunal,” the official said. “It’s still finding its way. Two years ago they couldn’t find enough cases. Now apparently they’ve got a backlog.”

The Government committed an additional £917 million in funding during the 2010 spending review to tackle avoidance, evasion and criminal attacks on the tax system. But the Association of Revenue and Customs believes that this is not enough when the department overall is facing a 15 per cent budget cut.

The union has called for the Government to put aside another £260 million to create 250 new senior tax positions to tackle avoidance by large businesses; 400 to ensure compliance by employers; and 200 lawyers and legal support staff to help clear the backlog of legal disputes.

Gareth Hills, a spokesman for the union, said: “ARC members continue to deliver against a backdrop of HMRC resource cuts over many years and insufficient re-investment. We have been consistently arguing that without adequate investment HMRC will be forced to make compromises.”

Last month, the Public Accounts Committee said that said that the loss of 3,300 jobs in the compliance and enforcement functions of HMRC had resulted in £1.1 billion in potential tax revenue not being collected.

A spokesman for HMRC said: “We do believe that we are winning the war against avoidance. The £917 million made available to us as part of our 2010 spending settlement for tackling avoidance, evasion and fraud, is being used against the avoidance “industry’.” 

Observation .............

Britain’s tax system is straining under the weight of thousands of unresolved disputes between companies, rich individuals and Revenue & Customs. 

More than 20,000 cases are piled up in the tribunals and will take at least 38 years to clear at the current rate, resulting in billions of pounds in potential revenue sitting uncollected. The backlog is one of the starkest examples of how the Government’s crackdown on tax avoidance is being threatened by a lack of resources. 

Cynical  .............

One tax expert compares it to the chaotic passport queues at Heathrow. “Sooner or later they’re going to give in and just let people through,” he says.

Solution .............

Simplify the tax system so that no-one needs an accountant to pay taxes ............. and don't let anyone off paying their taxes, even if it does take 38 years.

Unexpected benefit ............. if David Cameron pushed such a system through parliament, he could take his place in history alongside the signatories of the Magna Carta.

Have you noticed ...

... the furore concerning the tax avoidance by those who we might call friend, those we might call neighbour, those that do not pay their taxes in full .....

.... ah but we pay too much some write to The Times, "... there is no moral case for a resident of this country to be forced to pay wildly more than his neighbour for identical state services", so says Mr. Wilkins of East Sussex.

Not quite true Mr Wilkins, your assertion assumes that the majority of people when they work become company resources rather than stakeholders, your assertion rests on the foundation that many people can be paid below the minimum needed to survive who are then given a subsidy by other people throgh tax credits.

The reality is closer to The Times leader ...

A Serious Matter

Jimmy Carr has realised that tax is no joke. The comedian’s apology and his decision to abandon the tax avoidance scheme exposed by this newspaper are welcome. In deciding to invest in the K2 scheme, Carr did indeed make what he has called “a terrible error of judgment”. For while this scheme may be legal, it is a blatant example of aggressive tax avoidance that most reasonable people would have felt was neither in the spirit of the law nor fair to the taxpaying fans from whom he earns his living.

The Times champions success and wealth creation. We believe that income tax rates are too high and that they stifle enterprise, especially when combined with national insurance contributions. It is understandable that people take an interest in legal ways to reduce the burden. But there is a world of difference between protecting savings from tax in an ISA, for example, as millions of people do, and investing in tortuous schemes involving offshore trusts in order to reduce tax payments to minuscule levels.

The day before he repented, Carr told a gig: “I pay what I have to, and not a penny more.” This was not something to be proud of, given that this meant reducing his tax rate to considerably below that of his audience.

All the schemes that The Times has exposed so far are legal. Yet some go far beyond the intent of the reliefs or allowances that they seek to exploit. This is the kind of “aggressive” tax avoidance that the Chancellor has called morally repugnant. There is no absolute definition of what constitutes “aggressive”, but Graham Aaronson, QC, a tax expert, has suggested a test of double-reasonableness. An aggressive scheme is one that a reasonable person would not consider reasonable.

Synthetic schemes that involve no real assets, but funnel money on and offshore, such as K2 and some employee benefit trusts, are unacceptable under this definition. But many tax avoidance schemes are asset-based, such as the Icebreaker partnerships investigated by The Times. These are ostensibly designed to funnel money into the creative industries; and the Icebreaker partnerships claim that they do spend about 10 per cent of the total investment on musicians and other artists.

While that seems low — and our investigations expose partnerships that HM Revenue & Customs believe have become tax avoidance vehicles with a commercial veneer, instead of genuine creative investments that can also earn tax relief — they pose a bigger challenge in separating worthwhile investment and egregious abuse.

Today The Times investigates a tax shelter that is based on a statutory scheme set up to give tax relief for pharmaceutical royalties. But it has been ramped up to the point where it is now worth more than double what an investor puts in.

Many tax avoidance schemes stretch credibility. They are also remarkably widespread. Our continuing investigations demonstrate that tax avoidance is not just confined to the very rich, to celebrities or to the South. It involves bakers and dentists as well as singers and comedians.

A culture has grown up that is in part a revolt against high taxes, and in part pure opportunism by greedy people who do not want to miss out. The more people who stand up against this culture, against the attitude that says that it is grown-up and clever to “get away with it”, the better. But government must also radically simplify the system. The most egregious ruses are built on deferrals, relief's and allowances created in good faith by ministers.

The issue is not just about Carr. He has climbed down, and quickly, from K2. That is to his credit. But he was one of more than 1,000 people in that scheme, and there are thousands more in other schemes designed to ensure that people pay less than their fair share.

The answer to the whole issue is quite simple, If you make your money in the UK then you should pay your taxes here, if your assets are located here then they should be taxed here ........... simple.

If you live elsewhere in the world that's entirely up to you, if you wish to hold your bank accounts elsewhere that's up to you, but if you wish to do business here in the UK then pay your taxes in full to our treasury ........... simple, anything less is theft.

.......... unfortunately for the peoples of Britain we have no politician with the requisite strength to put in place the very simple laws needed.


..........  our Government should be afraid that another Kentish John Ball might be about to lead a 21st century Peasants’ Revolt ....

Apple, not a friend of the peoples of ...

... the USA !

This behemoth of technology, which unveiled its first shareholder dividend in 17 years last week, has amassed a $100 billion treasure chest from a string of hit products.  Some $64 billion of this amazing pile of gold is kept from the IRS of the USA using overseas subsidiaries, including one in the British Virgin Islands, a tax haven.

Apple has generated more than $40 billion in profits outside America over the past three years. It has paid only £1.1 billion in corporation tax overseas — equivalent to 2.5% of the earnings. Were it to repatriate the cash pile, Apple would have to pay the difference between the headline US corporation tax rate of 35% and the rate on overseas profits — about $20,000,000,000, tax bill.  How much benefit would this bring to the peoples of the USA I wonder.

Apple has declined to comment on the ubiquitous situation.

Similar things happen in the UK, its time the tax havens of the world were abolished, it should be "pay your taxes in full where the income is earned", only then can a degree of justice be experienced by the peoples of this world.

I guess Vodafone is amongst the robber ...

... baron companies of the world that steal taxes from countries in which they operate.

Nicholas Shaxson in his "Treasure Islands" (£8.99 from Amazon), subtitled "Tax Havens and the Men Who Stole the World", explains what is wrong with global finance  ...

... he write, while many might dismiss tax havens as offshore homes for spivs, money-launderers and the odd celebrity, in fact they help big companies and the super-rich to avoid paying tax, tax that totals "$1000 billion" each year.

... that's a trillion dollars, a trillion dollars unspent in the countries that the wealth is created, a trillion dollars that should be underpinning the health and welfare of the little people who have no voice in this unjust world.

Update on my entry for yesterday ...

The dispute has severely dented India’s reputation as a safe place for foreign companies to do business. Many are facing similar tax cases that could be affected by the judgment, including Cadbury, GE, Vedanta, AT&T, Sanofi-Aventis and SABMiller. The companies declined to comment on the decision, although one representative said: "Clearly, it does provide some encouragement."

... recognise the household names that are siphoning off the taxes from India through the use of offshore tax havens or countries that give advantage to business.

Time to create a level playing field that includes "justice" in the rules of the game.

Was it written in Welsh, because for certain, something was ...

... lost in translation.

The auditor general for Wales said there had been varying degrees of success with projects provided under the assembly's Merlin contract with Siemens, which started in 2004.

... the budget for the 10-year contract was a minimum of £220m, but the auditor general found the Welsh Government had spent £270m over the first seven years.

That's £50 million over budget with 3 years to go, the report card might read "should try harder".

Darren Millar AM Public Accounts Committee chair is reported to have said ...

I am concerned... that the Welsh Government is unable to demonstrate that the contract as a whole represents value for money.  The Welsh Government also had "not monitored effectively the costs and value for money of services delivered under the contract".

Darren Millar should write on the report card "are we trying".

A Welsh Government spokesman said ...

"We welcome the report by the auditor general for Wales which states that the Merlin contract is delivering core ICT services effectively, but added "It would be inappropriate to make any further comments at this stage as the report is likely to be considered at a future Public Accounts Committee evidence session and we will comment more fully after that meeting".

... this is translated as ...

We prefer not to comment, with a little time most people will forget how inept we have been.

... and the report card reads "obviously the government isn't raising the money itself, tax-raising powers might sharpen the political minds in Cardiff Bay and save the poor taxpaying public a bucket full of cash".

I don't pay enough taxes he said ...

... in today's "Times".

The world’s third-richest man is unhappy about the amount of tax he has to pay: he says it is not nearly enough.

That’s not all. Warren Buffett says that his wealthy friends do not pay enough either. Indeed, he says that his tax rate is barely half that of his secretary. Mr Buffett calculates that his effective rate last year was 17.4 per cent compared with 33 to 41 per cent for colleagues in his office. 

Well that will make us very happy Mr Buffett, unfortunately yours is a lone voice, and when he says ...

... that his own tax rate comes about because most of his income comes in the form “earned interest” — probably from capital gains and share dividends — which is taxed at a rate of 15 per cent, instead of the top marginal rate of federal income tax of 35 per cent that applies to Americans who earn $373,650 or more.

... he skips past the problem, the complexity of taxation, the complexity brought about by the powerful influences who have negotiated unfair advantages, lower tax rates and allowable expenses.  Unfortunately the retired local authority worker of Anglesey has not been able to negotiate such advantages whilst supporting the more affluent members of society in his or her daily toil..

There should only be a single rate of tax coupled with a single tax allowance, and a business should be compelled, at inception, to be created as a Limited Company or later morph into a Public Limited Company, that way our businesses become "people", the company will pay tax on its income at the rate that each member of the taxpaying public will.

It's true that income from business to the individual will have been paid twice, once by the company and then recipients of dividends, but that's not a problem as I consider a single tax rate of 20% across the board would work, and when you consider a tax rate of 40% has been the norm for the wealthier members of society there is little to shout about.

What about company investments, that's an expense if the investment is made in our country, whatever country you reside in, if it is an investment elsewhere, raise the money elsewhere and let the local population enjoy the benefits.

What about tax-havens, pointless as income is taxed at source, if you want a foreign bank account, then move on to that country.

What about those that cheat the system, we have prisons.

What about the businesses and financiers who play hard-ball with government, you know the tack ...

... if you don't do it our way, if you don't give us an advantage we will leave.

... there is always someone else to take up the strain, that's "Capitalism".

Why am I so convinced that taxation is so unfair, it is because an industry has grown up to gain advantages for the few, and to minimise a persons contribution to the tax pot, the proof of the pudding is in the eating.  It's very difficult to cheat when the game is simple ...