From the TUC

Tax avoidance: RBS confesses

13 Mar 2009, by Guest in Economics, Politics

This is very significant.  After endless denials by corporate Britain, one of the world’s biggest banks has finally admitted it deliberately avoided tax to the tune of £500 million.  It has confessed that it had a department within the bank dedicated to establishing the avoidance schemes.  That Department has now been closed down.

For those who have been campaigning hard on this issue and have had to listen to all the denials, dismissals and ridicule from big companies, this is massive proof that they were right.  No-one will believe that RBS was the only offender – the onus is now on other big companies to come clean.

But it is also an embarrassment for the Government.  It has always been claimed that the HMRC works very hard and successfully to prevent tax avoidance.  It is true that the HMRC does work very hard but they are hobbled by a weak legislative framework which means they are always playing cat and mouse with the avoidance industry.  As soon as one scheme is closed down, well-paid corporate accountants and lawyers are already setting up new schemes.  There can now be no argument against establishing a general anti-avoidance principle (GAAP) which would give the HMRC the power to charge tax on any scheme which has been set up purely for the purpose of avoiding tax rather than having to outlaw each new scheme as it is established.

The Chancellor could introduce a GAAP in the Budget in April and who would be brave enough now to deny its necessity? I wonder how George Osborne would respond to that?  For all the headlines and political debate about tax avoidance and tax havens in recent months, the Tories have been mighty quiet on the issue.  It couldn’t be anything to do with this, could it?

3 Responses to Tax avoidance: RBS confesses

  1. Richard Murphy
    Mar 13th 2009, 9:21 am

    When the TUC published my report ‘The Missing Billions’ Bill Dodwell of Deloittes said it was ‘just rubbish’.

    What is becoming increasingly clear is just how right we were, and that the only rubbish was the denial of the allegations made.

    Richard Murphy

  2. Admin
    Mar 13th 2009, 1:32 pm

    …and if you missed Richard’s “The Missing Billions” and aren’t too sensitive to a bit of “told you so”, you can find it in full here: http://www.tuc.org.uk/economy/tuc-14238-f0.cfm?theme=touchstone

  3. Adam Lent

    Adam
    Mar 13th 2009, 2:14 pm

    Richard Murphy is, of course, one of the hardiest campaigners on this issue who has had to listen to the corporate spinners dismissing him for years. You can read his response to the RBS news here: http://www.taxresearch.org.uk/Blog/2009/03/13/the-myth-is-shattered-we-were-right-all-along/