Taxpayers’ Alliance gives green light to corporate tax avoiders

February 3, 2009 1:39 pm

Tax avoidance

By Derek Draper

Yesterday we noted with interest the front page of the Guardian, which shone the light on the scale of corporate tax avoidance in the UK, and launched the Guardian’s new series on tax avoidance. Vince Cable followed up this piece today on Comment is Free.

The obvious implication of this practise is that the treasury loses out; which means that the bill is footed instead by the ordinary taxpayer.

Bearing this in mind, we decided to contact the Taxpayers’ Alliance to see what they thought about this. We received the following quote from Matthew Elliott, the Chief Executive:

“Far too many companies are being driven abroad by this country’s punitive and complex tax system. As a result, our economy and our public finances are losing out. The Government should be doing all it can to bring business back, and the best way to do this would be to lower tax rates and make the system much simpler. We can’t expect companies to bring investment and job opportunities to Britain if the only thing they get in return is excessive bureaucracy and high tax rates. Lower taxes would tempt business to Britain, and help ordinary families to pay the bills at the same time.”

We didn’t think that this answered the question adequately. What we put to them regarded the current corporate tax avoidance that the Guardian is covering this week. In other words, leaving aside their mantra of lower taxes and cuts in public services, what do they think about massive companies avoiding tax in the meantime?

We called them and asked them to actually answer the question. What we received was a repeat of the same statement above, over and over again. It seems to us that the TPA wants individual taxpayers to pick up the slack for the avoidance behavior of these huge enterprises. They repeatedly tried to take us off the subject of corporate tax avoidance, and back onto tax levels overall. This, of course, has absolutely nothing to do with whether companies avoid tax, and what the TPA’s view is of those.
They went on to back the practice of legal tax avoidance because they see tax as too high… a necessary implication of this is that someone else has to fit the bill.

When we said that we were going to post exposing this, they sent us the following e-mail:

“Derek,

As I made very clear in our phone conversation just now that is not my position, never has been and never will be. To say so is a lie and a total misrepresentation of my position and the position of the TaxPayers’ Alliance , as you well know….

Mark (Wallace)”

This was our reply:

“Mark,

You just have to explain where in this logical chain we have got it wrong:

If government spending stays the same and tax revenue stays the same (I understand you would prefer they don’t but they are going to, at least for now) and companies engage in the tax avoidance schemes outlined in the Guardian, corporate tax levels would decrease and so the burden on individuals would have to rise? So, do you condemn such avoidance schemes or not? My reading of what you said is that far from that, you make excuses for, and encourage them to do so. Therefore you have a stance which would lead to individual taxpayers paying more tax. What is mistaken about any of this? Finally, as I pointed out earlier, those individual taxpayers have a right to know: Do any of these corporate tax avoiders fund the Taxpayers’ Alliance? Yes or no and, if yes, which ones please?

Yours,

Derek Draper”

Tax avoiders' alliance

When they respond we will let you know. In the meantime, perhaps they should change their name to the “Corporate Tax Avoiders’ Alliance”?

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