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6 reasons to clamp down on corporate tax avoidance

Britain loses up to £12 billion a year through corporate tax avoidance. Here's some things we could do with the money.

 

by Michelle McGagh on May 28, 2013 at 15:34

Repay our debts

Chancellor George Osborne probably isn't too keen to reverse spending cuts. Closer to his heart is his pledge to to eliminate the budget deficit, ie, balance the books so the government doesn't spend more than it earns, by 2017-18.

In fact, he and we could in theory go much further than this. If we invested that £12 billion in stocks and shares and got an average annual return of 6% (which is not unfeasible) it would take us 33 years to wipe out the UK's total – and staggering –  public sector net debt of £1.2 trillion.

So there's a good, long-term reason for taking corporate tax avoidance seriously. See you in 2046!

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7 comments so far. Why not have your say?

Clive B

May 28, 2013 at 16:08

"With the average salary of a nurse standing at £24,000 a year that £12 billion would buy an awful lot of care. Based on the £24,000 a year salary, 25,000 nurses could be paid this amount every year for 20 years"

I disagree with the logic here.

If the government raised £12bn more from corporation tax, I'd hope they would reduce other taxes by £12bn, hence no more money for nurses, education etc.

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Twister Spitzer

May 28, 2013 at 16:13

If ifs and ands were pots and pans, and all the sea were ink.

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Steven Heath

May 28, 2013 at 16:41

We need to do some think Radical to spark Business in the Uk ,

i have 3 suggestions ;

1: Scrap Corporation Tax altogether

2: Scrap £12.6Bn Foreign Aid Budget

3: Scrap Trident £140Bn unaffordable

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In the Dark

May 28, 2013 at 20:07

Paying tax is not charity giving. We have to pay our due, not a penny more nor a penny less than otherwise demanded. We have the right to minimise our tax burden but not to evade tax.

Considering the way government spends our earned income leaves an unpleasant taste. To say as in the article, it could be use to pay for more Nurses, Soldiers or even Politicians (my interpretation) misses the point.

Government should only cost that necessary to conduct inter state affairs not meddle in the lives of the populus. Spending money as it does in part is only to gain popularity at the expenses of those that pay taxes. There are numerous example of this from Family Allowance, Child care and Education Maintainance Allowance. The latest binge is the estimated £32b of tax payers money to revamp a train line. If this is the economic success that the Government aspires then where are the shares and bonds for this riviting investment.

The Chancellor is correctly cutting back on Government spending but slicing away 10% here and 10% there is not the correct way to achieve a respectable cut in public spending. In my opinion he should have conducted functional reviews of spending lines and those deemed out of date for example Child Benefit, could have been cut in total.

I suppose vested interest, UK Uncut and a few others, would have mounted a protest or some sorts but then would they protest if Trident was scrapped as part of the analysis.

To add to Steven Heath list are the following:

Welsh Assembly;

Scottish Parliment;

Some 50 UK MPs;

The Common Agriculture Policy;

Payments to Local Councillors especially pension provision;

Reduced payments to the EU;

Etc.,

The aim is Government spending is not to exceed 30% GDP, this is an initial target until the deficeit is reduced to a manageable level. The realise tax benefits are returned to the populus (you and me).

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Franco

Jun 01, 2013 at 15:28

These corporations cheat on their tax returns because the government made it legal for them dudes, it is not rocket science. It could close the loopholes tomorrow if it wanted.

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Tony Drew

Jun 02, 2013 at 10:22

Let`s face it, the Government is incompetent and couldn`t organise a beer-up in a brewery!.

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John Osborne

Jun 02, 2013 at 19:16

There is serious issue to this big company tax avoidance that is rarely mentioned.

All the multinational companies that legally avoid tax in this manner not only make UK plc poorer, but cause unfair competition and loss of jobs in UK high street and industry because of it. Why are Amazon etc.so cheap, undercutting everyone else?

However all this is in the hands of the government, our wonderful "professional politicians". I do not believe they cannot close this loophole. Similar incompetence to allowing most of our monopoly utilities to be wholly owned by foreign companies, I really object to paying my electricity and water bills for the profit of these people abroad rather than reducing bills. How can a sheik in arabia or french company really care about british consumers?

No wonder that despite recession, UK has such a massive balance of payment deficit.

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