?”The scale of unpaid tax now outstrips the entire deficit. Forcing the elite to pay up is a matter of both justice and necessity”

from the grauniad

Proper link that doesnt go through Facebook

I stopped reading after

The richest 1,000 people in Britain have seen their wealth increase by £155bn since the crisis began – more than enough to pay off the whole government deficit of £119bn at a stroke

Dear Guardian pundit, repeat after me slowly:

Debt and deficit are not the same thing.

Is this the same Guardian that wanted to take money off some of the poorest and most vulnerable families in the UK in order to keep its own staff in luxury, or is it the Guardian that has been accused of tax avoidance Clicky with PriceWaterhouseCoopers ?

Oh, double win!

Guardian trying to stir up the lynch mob again by drawing a trying to create a link between two unrelated things.

The Guardian Group uses an offshore ownership structure to reduce it’s tax bill. I very strongly suspect the journalists at the Guardian use private companies to reduce their tax and national insurance payments. What the Guardian needs to do is put it’s own house in order.

Without doubt our tax system is too complex, too many things are too easy to exploit like the example I quote above. The government should be focused on a simplification.

As for the “Rich List” something created for the tabloid Times newspaper group it represents a guesstimate at the global wealth of individuals, it is not a factual record of income. A change in theoretical wealth is not the same as income. It makes a better headline for the Times if the numbers are large so best to exaggerate.

The tax status of the Guardian doesn’t decrease the validity of the argument, in fact it probably increases it. Yet another example of a big company avoiding tax through legal loopholes that should be closed. I’m also fairly sure that their journalists and editors don’t do the accounts as well, however I agree that it is very hypocritical for them to publish that kind of story with the current state of their own finances. I just hope that they start paying the tax, rather than stopping printing the stories.

While the bit about Rich List wealth increase and the deficit is clearly wrong, if you’d read a bit further this is more interesting:

The total tax gap between what’s owed and collected has been estimated by Richard Murphy of Tax Research UK at £120bn a year: £25bn in legal tax avoidance, £70bn in fraudulent tax evasion and £25bn in late payments.

If they collected that (admittedly estimated) £120bn a year, it would seem to cover the £119bn a year deficit?

jambalaya – Member
Guardian trying to stir up the lynch mob again by drawing a trying to create a link between two unrelated things.

So an increase in tax revenue would have no effect on the deficit?

Grauniad article with poor data:
Apple is estimated to have avoided over £550m in tax on more than £2bn worth of sales in Britain by channelling business through Ireland,
Wow, 26% of £2bn is £550m, we can all use our calculators for that. But don’t you pay corporation tax on profits not sales? Just think how much Apple product we would have bought for them to owe us that much! Such dumbness undermines any legitimate message.

I couldn’t help noticing they mentioned companies that funnel money through Ireland. Didn’t Ireland deliberately lower its taxes to encourage businesses to move there? Would seem that raising taxes and aggressively pursuing those who we feel owe them might not be the best option. Perhaps we should be working out why these businesses are moving money away from the uk and see if we can encourage them to come back and maybe bring some jobs.

If they collected that (admittedly estimated) £120bn a year, it would seem to cover the £119bn a year deficit?

Obviously the fraudulent tax evasion should be collected somehow, although I doubt you’d get £70bn. But “legal tax avoidance” isn’t “owed” (are they coming after my ISA?), and presumably the £25bn in late payments comes through eventually anyway, with interest.

Apple is estimated to have avoided over £550m in tax on more than £2bn worth of underlying profits in Britain by channelling business through Ireland, according to a Sunday Times analysis

Probably worth finding the original Sunday Times article before criticising the figures? “More than £2bn” is hardly definitive.

@Lifer

Of course an increase in tax receipts would help, I said so in my post.

What is irrelevant is to try and link the increase in paper wealth of a few people to the tax deficit in the UK.

People need to understand there is no free lunch here, there is not a mythical pot of gold somewhere waiting to be collected which will solve our problems at a stroke.

@pleaderwilliams

Agreed let’s focus on some of the things you mentioned. Fraudulent Tax Evasion is made up of many things but a big portion is cash in hand work/payments. Legal loopholes like those used by Starbucks, Guardian, eBay, Apple,the BBC and the Civil Service need to be closed off.

But “legal tax avoidance” isn’t “owed” (are they coming after my ISA?)

No, it’s not owed, (and I’m pretty sure that ISAs wouldn’t be counted in that figure), but closing some of the loopholes that allow it would help to increase tax revenue. Companies like Starbucks and Apple are paying very little in tax. Closing loopholes wont force them abroad, as they’re already headquartered abroad, they need to be in this country to sell to this country, and they take advantage of the market created by our society, so why shouldn’t they contribute to it?

@pleader – the article is subscription only, the headline is Apple avoids up to £570m in tax …

Sunday Times

Very ball park from me £2bn in sales, 50% margin => £1bn, less costs for retail space, marketing, staff etc call that £500m

So £500m profits taxed at 25% (approx corporation tax rate) is £100m tax avoided assuming they pay zero

As I said in my post the government needs to change the rules so loading the UK companies with licencing costs or eBay and Facebook channeling revenues to Ireland is not possible.

As an aside I am stunned Europe didn’t kick Ireland into touch when they were bankrupt but refused to raise their ridiculously low tax rates which are exploited by these companies in return for their bailout

Very ball park from me £2bn in sales, 50% margin => £1bn, less costs for retail space, marketing, staff etc call that £500m

So £500m profits taxed at 25% (approx corporation tax rate) is £100m tax avoided assuming they pay zero

Unfortunately I can’t see the article either. I would agree with your working based purely on a hypothetical £2bn sales, at least as far as corporation tax avoided. I don’t know what figures the article uses, or indeed whether it alleges avoidance of VAT, Employees NI, Capital Gains etc. All of which could theoretically be within your ‘other’ £1.5bn.

I just don’t know whether anyone (even a journalist!) would publish something as stupid as £2bn sales = up to £570mn tax avoidance, just because 100% of sale “could” be profit, and they “could” be avoiding 100% of tax.

Legal avoidance needs to be much harder to achieve, it’s not easy now in truth but it is only available to those who can afford to ‘speculate’ on the many possible schemes on the go. That’s life but hardly ideal.
I do wonder about the OP basic fact as to the rich getting richer whilst the working classes get poorer. It may always have been thus but we ought to be able to do something to help level things a bit more rather than the picking around the edges of child benefit with an unfair half arsed scheme that’ll cost a fair chunk to administer. I’d have abolished it and transferred the child benefit element to tax credits. Win win and no additional admin.

As an aside I am stunned Europe didn’t kick Ireland into touch when they were bankrupt but refused to raise their ridiculously low tax rates which are exploited by these companies in return for their bailout

I think they tried but Ireland could have done an Iceland and allowed their banks to go to the wall which would have brought down the German banking system.

The article now says ‘£2bn of underlying profits’. So skip the maths, £500m (ie 25% of 2bn) is the right rough figure.

EDIT: Too late! But:

Looks like the use of the word “sales” was the bit that was wrong. £2.2bn was in fact estimated profit, so the £570m/£550m makes a lot more sense.

Analysis of data filed by the company in the US suggests that the UK would normally account for one-tenth of Apple’s global revenue. On that basis the company’s UK turnover last year was about £6.7bn, implying an estimated profit of £2.2bn which should generate £570m in corporation tax at 26%. However, Apple’s latest accounts show UK turnover at slightly over £1bn and a profit of just £81m, i.e. only £14.4m was paid in tax – a mere 2.5% of its true tax liabilities.

http://www.michaelmeacher.info/weblog/2012/10/apple-google-facebook-amazon-starbucks-owe-1bn-tax-but-pay-only-33m/

I just don’t know whether anyone (even a journalist!) would publish something as stupid as £2bn sales = up to £570mn tax avoidance

He’s now “corrected” the article to say £2bn in profits, not sales. I use “” because I’ve no idea whether the figure is right, and judging by the state of the rest of the article everything needs to be double-checked. Edit – beaten to it!

It seems that figure for £70bn in tax avoidance is very controversial – HMRC say £26bn.

It seems that figure for £70bn in tax avoidance is very controversial – HMRC say £26bn.

Actually they say £32bn for 2010-2011, http://www.hmrc.gov.uk/stats/mtg-2012.pdf

So both you and the original article (which does state HMRC estimate as well, albeit as £35bn) are wrong. I would agree that its an estimate, and I (and the original article), stated it as such. Still, whether its £70bn or £32bn, its still a lot of money, and we probably ought to try and get hold of as much of it as possible.

We could split hairs endlessly but my figure was for tax evasion (as per the £70bn figure in the article), for which HMRC give £26bn whereas yours is for the total “tax gap”. Principle remains the same though.

Edit: wrote “avoidance” where I should have written “evasion”! 😳

Thanks for clarifications.

One issue worth noting is that those at the center of the EU wish to see greater tax harmonisation in order to prevent these sort of abuses.

The richest 1,000 people in Britain have seen their wealth increase by £155bn since the crisis began – more than enough to pay off the whole government deficit of £119bn at a stroke

Dear Guardian pundit, repeat after me slowly:

Debt and deficit are not the same thing.

Why does your link not mention debt let alone show confusion between debt and deficit?

You seem so busy to score a point you actually failed to realise your link did not include the error you corrected

One issue worth noting is that those at the center of the EU wish to see greater tax harmonisation in order to prevent these sort of abuses.

This can only be a good thing.

You seem so busy to score a point you actually failed to realise your link did not include the error you corrected

Hmmm, don’t recall trying to score a point. Just to explain, the deficit is a recurring difference between what the government pays every year and what it collects. Unlike the debt you can’t pay it off at a stroke with a £155bn wealth increase because it comes back every year. But then you knew that, didn’t you?

This can only be a good thing.

I would disagree, if the troubled countries lose control of their fiscal as well as their monetary affairs then will have limited ability to claw their way back to prosperity.

Why does your link not mention debt let alone show confusion between debt and deficit?

To me the use of pay-off implies debt and therefore it is either sloppy use of language or conflation.

We could split hairs endlessly but my figure was for tax evasion (as per the £70bn figure in the article), for which HMRC give £26bn whereas yours is for the total “tax gap”.

My apologies, you are correct.

A figure of £6bn does sound low for tax avoidance though. If you believe the Sunday Times and the HMRC then Apple alone could be responsible for nearly 10% of the UKs tax avoidance. Vodafone allegedly avoided nearly £5bn of tax on their own in recent court case. Either way, we could be collecting a lot more tax without raising rates at all, simply by closing loopholes and catching cheats.

One issue worth noting is that those at the center of the EU wish to see greater tax harmonisation in order to prevent these sort of abuses.

I guess with the globalisation of business, global tax rules could be an important tool in preventing a race to the bottom in tax terms. Obviously there are a huge number of barriers, chief of which is getting enough countries to agree to them.

Hmmm, don’t recall trying to score a point.

Chinny reckon

I stopped reading after

The richest 1,000 people in Britain have seen their wealth increase by £155bn since the crisis began – more than enough to pay off the whole government deficit of £119bn at a stroke

Dear Guardian pundit, repeat after me slowly:

Debt and deficit are not the same thing.

You really want to maintain that you were not poiint scoring in saying they confused the defecit and debt? The I stopped reading the saying it slowly was not point scoring ..Oh behave

Just to explain, the deficit is a recurring difference between what the government pays every year and what it collects. Unlike the debt you can’t pay it off at a stroke with a £155bn wealth increase because it comes back every year. But then you knew that, didn’t you?

Is giving a patronising answer to me meant to make me totally forget that they quote does not confuse defecit and debt not least because it does not even mention debt in your link. You do not address this but rather do this “witty” retort which has saved you a lot of face – no really it has 🙄

A cursory review of the Sunday Times Rich List from 2007 and comparison with 2012 figures shows that although the Super Rich have “gained” in recent years, the majority of them are still sitting on massive losses in capital.

The Guardian conveniently overlooks this, as well as the more obvious fact that the “rich” don’t tend keep their wealth as bars of gold hidden under a mattress – much if it us used as working capital to build and expand businesses that employ people and in turn generate taxes.

Junkyard, your definition of point-scoring is obviously different to mine. If I was making a point it is merely that I do not like sloppy journalism like the article linked by the OP. There are some real issues that need to be addressed around the tax behaviour of large companies and the behaviour of governments that allow it, but articles like this are IMHO as bad as Daily Mail journalism and I will deride them as I see fit.

If I was making a point it is merely that I do not like sloppy journalism like the article linked by the OP

and i dontlike epole making points about someoens comprehsnion of debt abd deficit and poisting upa link that doe snot mention defecit as I find that very sloppy and not even journalism 😉

Stopping now
FWIW I have confused defecit and debt once in a post [ 20 year old A level in economics fwiw] – the humbling handing of my arse on a plate meant it was never repeated- I do agree it does happen but I dont think that quote shows it happening

It’s a Seumas Milne article. Don’t waste you’re time, he’s a Marxist.