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Mar 22nd, 2011

Will the Artful Dodger strike again?

By charlotte

It’s budget day tomorrow. So, the question we’re all asking ourselves is will the Artful Dodger strike again?

George Osborne

Photograph by altogetherfool (Flickr)

Together we voted to make tackling tax dodging a campaign priority so tomorrow we’re asking George Osborne to introduce measures in today’s budget that will prove he’s as serious as us about putting a stop to tax dodging.

In January we branded George Osborne the Artful Dodger because of his record on tax dodging. Instead of tackling tax dodging, he keeps dodging the issue. If George Osborne was serious about tax dodging, these are the practical things he could announce in the budget:

Make it harder for companies to dodge tax in secret: make them publish accounts for every country they work in
If companies were made to publish their accounts stating clearly and transparently the profits made and tax paid in every country where they operate, it would be much harder for companies to move money into tax havens to dodge tax. At the moment, companies can shift profits into tax havens specifically to dodge paying tax in the UK. Enforcing transparency would be one way to tackle this.

For more information:
Action Aid: http://www.actionaid.org.uk/102673/five_solutions_for_tax_justice.html
Richard Murphy, Tax Research:  http://www.taxresearch.org.uk/Blog/2007/01/09/tax-justice-positive-1-transparency
Tax Justice Network: http://www.taxjustice.net/cms/front_content.php?idcat=2#4

Require all companies and individuals to act within the spirit of the law: introduce a “General Anti-Avoidance Principle”
“A General Anti-Avoidance Principle” is about making individuals and companies act within the spirit of tax law and not just within the letter of it. This would mean that tax dodging strategies put into place specifically for the purpose of avoiding tax would be not in the spirit of the law, therefore not allowed. Examples of activities which wouldn’t be allowed if they were for the purpose of reducing tax are things like, moving money between husband and wife or recategorising income as capital gains.

For more information:
Tax Justice Network: http://taxjustice.blogspot.com/2010/11/why-do-we-need-general-anti-avoidance.html
TUC: http://www.tuc.org.uk/economy/tuc-18825-f0.cfm

Drop plans to make it easier for UK companies to run their businesses through tax havens, as currently proposed in the Finance Bill 2011
The government is planning to allow large UK companies to run their treasury functions from tax havens abroad, letting them dodge significant amounts of UK tax as a result. And they’re also planning to relax rules on all tax haven subsidiaries – or controlled foreign companies – of UK multinationals. This means that large companies will get to pay less tax. Dropping this proposal would stop money flowing out of the UK into tax havens.

For more information:
Daily Mail: http://www.dailymail.co.uk/money/article-1368525/CITY-FOCUS-SIMON-DUKE-Taxing-times-overseas-exodus.html#ixzz1HJZJeoLH
Richard Murphy, Tax Research: http://www.taxresearch.org.uk/Blog/2011/03/22/business-passing-its-tax-bill-to-ordinary-people-with-the-help-of-george-osborne and; http://www.taxresearch.org.uk/Blog/2010/11/30/whats-chiselling-away-at-poor-countries-tax-revenues-and-the-uks-too

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