From the TUC

Tax havens and big business: What’s happened to the Chancellor’s Review?

02 Feb 2009, by Guest in Economics

If you haven’t already, take a look at The Guardian’s excellent piece on corporate tax avoidance today. It’s the first of a number of articles revealing the complexity and extent of big business tax scams.  Lots of references to the TUC’s own work I’m glad to say.  There is also a Panorama report on the BBC tonight on tax haven abuse.  As I’ve written elsewhere, the momentum for change in this area grows daily.

The Guardian mentions the tax haven review established by the Chancellor last year as part of the growing pressure.  But at the moment that review is pretty invisible.  A peek at the details of the review on the Treasury website suggests “interim conclusions” before the Budget (which will now probably be in early to mid April) but there has as yet been no call for evidence and I am not aware of any other progress.  The review chair, Michael Foot, may well have been talking to people in the tax industry and to the tax havens themselves but I know of no civil society group that has been consulted.  The Chancellor is apparently dead serious about addressing the problems posed by tax havens linked to the UK but there will be widespread annoyance if an interim report is indeed published without any consultation with the wider groups and individuals affected by tax haven activity.

The TUC is currently researching and writing a report on how tax havens operate and suggesting proposals to stop the abuse.  It would make a good submission to the review but we will publish it whether Michael Foot wants to read it or not.

5 Responses to Tax havens and big business: What’s happened to the Chancellor’s Review?

  1. Trotsky
    Feb 2nd 2009, 10:47 am

    Of course, it’s a different thing altogether when the Guardian Media Group uses legal methods to avoid tax isn’t it…

    GMG, publisher of The Guardian and The Observer, collected £335m last year from the sale of a half-share in the company that houses Auto Trader magazine and its website.

    According to its annual report, published yesterday, income from the sale, and interest payments to the company, helped turn an operating loss of £63m into a headline profit of £306.4m.

    However, because GMG was entitled to tax relief for accruing losses, reinvesting the Auto Trader money, and writing down the value of its investment in new printing presses, it signed off the year to March 2008 with a tax credit of £800,000.

    Grant Thornton senior tax partner Mike Warburton said: “Guardian Media Group has enjoyed a tax holiday courtesy of some very helpful rules introduced by their friend Gordon Brown. They are taking full advantage of the relief legally available to them, which all businesses should do. That’s fine, but don’t knock people who do exactly the same.”

    http://tinyurl.com/begerz

  2. Adam Lent

    Adam
    Feb 2nd 2009, 11:03 am

    I’m sure Guardian Media Group can speak for themselves but what you have described seems to me acceptable use of reliefs for the purposes of promoting investment. It doesn’t even come vaguely close to the deliberate and artifical use of tax havens purely for the purpose of avoiding tax described in The Guardian today. The TUC has always been very clear in its research that there is nothing wrong with tax reliefs and allowances as long as they serve a clear social or economic purpose and are not abused by the wealthiest individuals and organisations simply to avoid tax.

  3. Adam Lent

    Adam
    Feb 2nd 2009, 2:16 pm

    Richard Murphy has now addressed the detail of Guardian Media Group’s tax affairs here: http://www.taxresearch.org.uk/Blog/2009/02/02/the-guardians-tax-gap/

  4. Snowblog – Why is Britain a haven for tax havens?
    Feb 3rd 2009, 8:07 pm

    […] more tax havens than any other country in the world. Not only these islands (whose uncertain status Chancellor Alastair Darling has ordered an inquiry into) but places like Gibraltar, the Cayman Island, Turks and Caicos. And […]

  5. Tax Research UK / What is happening to the Tax Haven Review?
    Feb 4th 2009, 10:52 am

    […] announced a review of British Tax Havens in the Pre Budget Report. Nothing has been heard since. As Adam Lent says on the TUC […]