More #ukuncut tax balls
Posted by Christie Malry on January 6, 2012 at 9:59 am
From a particularly idiotic online petition:
Our tax chief had secret lunches with Vodafone and Goldman Sachs and then handed them billions in tax breaks – while keeping Parliament in the dark!
No. HMRC hasn't handed out tax breaks. It has taken a view on how the tax law should be applied and, in both cases, decided that it the benefit of settling now outweighed the cost of enforcement, taking into account the likelihood of success and potential impact on future cases.
The tax under dispute in the Goldman Sachs case is measured in the tens of millions, not billions. It's by no means a trivial sum, but it's a country mile from UKuncut's hyperbole.
The idea that HMRC kept Parliament in the dark is particularly lunatic. Parliament is an oversight body, not a managerial function. All sorts of activity takes place in government departments of which Parliament is unaware. That's why we put each department under the watchful eye of ministers. Ministers are then accountable to Parliament for what happens in their departments on their watch.
MPs are outraged, claiming we are owed over 25 billion pounds in back taxes from these and similar dodgy deals. But the tax agency has blocked an inquiry into the scandal and refuses to release documents to shed light on why these tax breaks were ordered in the first place.
MPs didn't claim we are owed over 25 billion pounds of back taxes. The PAC report noted that there is some £25 billion currently under dispute. But that's not the same thing at all. HMRC thinks it is owed £25 billion but the taxpayer disagrees. Therefore there will need to be some form of dispute resolution, potentially involving the courts, to decide who is right. Do UKuncut really believe that the tax due is the amount HMRC asks for first time? Do they really believe HMRC never gets it wrong?
Tim Worstall covers this issue in more depth here.
By acting together now we can ensure full transparency on the Goldman Sachs and Vodafone deals, and get them to pay the tax they owe. Let’s turn up the heat -- sign the petition to David Cameron for tax justice -- we’ll deliver it with a splash next week.
I think you'll find that the Vodafone case is settled and that due process will make it impossible to reopen.
And let's all be thankful that we do actually have a process for determining the tax due in this country instead of the stupid Humpty Dumpty process that UKuncut seem to think they want.
From what I understand, the Vodafone issue puts a lot of weight on whether their Luxembourg operation was used purely for the purposes with tax reduction.
Purely out of interest, and bearing in mind my entirely limited knowledge of this sort of thing, would Vodafone have had any dispute with HMRC if they had routed the Mannesman purchase through another, more active business, but one that still pays a significantly lower tax rate than the UK? (I'm sure they must have such a business) Just curious as to how important the Luxembourg issue was over the dispute with HMRC
Thanks in advance