Government speaking with forked tongue: looking both ways on tax, junk food and so much more

Did the reader who emailed the following comment really believe that “Theresa May is outdoing Jeremy Corbyn”? I guess he was beholly baxtering provocative, but simpler souls are being successfully hoodwinked.

Those who remember resisting the poll tax distrust the rhetoric, belied as they look at past and present actions – a distrust shared by Prem Sikka and Holly Baxter who ironically opens:

“But it’s great news that Theresa May is our new Prime Minister, isn’t it? I for one felt really warm and fuzzy inside when she made her speech all about being the servant of working people, the protector of struggling young people, the defender of the employee against asset-stripping companies and big business meanies, and the champion of social mobility”.

Holly says that she completely forgot that, on 4 September 2013, Ms May voted against calling on the government to get more people into work, against introducing a compulsory jobs guarantee, against standing up for families in the private rental sector, against curbing payday lenders, and against banking reforms.

Evidence of the crippling unfairness of the post-recession world was wiped completely from her memory and of how Ms May has consistently voted to raise VAT since 2010 and voted against acting on soaring energy bills in 2013.

Tongue in cheek she adds that it must have been a mistake when this woman who expressed deep concern for young people’s housing plight voted:

  • against building 100,000 affordable homes in 2013,
  • and on 13 May 2014, not to allow estate agents to continue charging their fees to tenants instead of the person renting out the property.

And said, “You know what Theresa really believes in, though? “Doing something radical” about big business.

prem sikka 3Cue Prem Sikka, Professor of Accounting at Essex Business School’s Centre for Global Accountability, who points out that earlier this month, a report by the All Party Parliament Group on Tax accused the UK government of looking both ways on tax avoidance. However the action stops there and government takes little ‘effective taxation’. Read his article here.

Sikka points out that the resource-starved HMRC has the capacity to investigate only about 35 wealthy tax evaders a year. In February 2016, HMRC had 81 specialists for investigating transfer pricing arrangements, a key technique for shifting profits to offshore havens and avoiding UK taxes. An investigation into just one major company used up between 10 and 30 specialists, leaving little time for others.

Of course, some tax cases by HMRC and taxpayers are brought to the courts, but the UK lacks institutional structures for a swift conclusion. A complex tax case with possibility of appeals to the Supreme Court can drag on for a decade or more. By 2015, nearly 30,000 cases were awaiting to be heard. The lack of judicial capacity is unlikely to lead to any timely fines on peddlers of tax dodging schemes.

On occasions, courts have declared avoidance schemes marketed by big accounting firms to be unlawful. Despite these and other judgements no accountancy firm has ever been fined or disciplined by any professional body or government agency for providing unlawful schemes.

Professor Sikka ends by saying that the UK lacks political will and effective institutional structures; the world of tax enforcement is too close to big business; HMRC’s effectiveness is also compromised by its closeness to corporate interests its board is populated with individuals with links to big corporations, law and accountancy firms.

 

 

 

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Posted on August 19, 2016, in uncategorized. Bookmark the permalink. Leave a comment.

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