Although any attempts to clamp down on tax avoidance schemes are welcome, I do not feel that the proposed
measures go far enough or that HMRC has the capacity to go after corporations that have in the past paid less tax than their cleaners.
By 2021, HMRC is projected to have lost 34% of its staff since 2010, including those in departments dealing with the very largest corporations. That is a huge number, and with the big accountancy firms willing to take on former HMRC employees for their knowledge and expertise, is it any wonder that the tax-avoiding corporations are one step ahead of the game?
The Bill makes no reference to dealing with offshore tax havens, which, as we all know, are a popular device for avoiding tax wherever the profits have been made. That scam has been estimated to be worth £13,000 billion worldwide in avoided tax. Some of those profits will have been made in the UK, and some in other countries, including many developing countries. Oxfam has estimated that the cost of tax avoidance to developing countries is £78 billion. That money could go a long way to providing schools, healthcare and clean water, and it could actually save lives.
What is required is greater transparency and a mandatory requirement for public, country-by-country reporting on where profits have been made, so that multinational companies pay their fair share of tax along with everybody else and make a contribution to society in the countries in which they operate. It is estimated that unpaid tax could be worth as much as 16% of Government revenue in some developing countries. It cannot be right that multinational companies should be able to choose where they pay tax or whether to pay it at all.
In the UK alone, tax avoidance was estimated to be approximately £11.4 billion for the last fiscal year. It is scandalous that some of the corporations using tax avoidance measures in the UK benefit from having been granted lucrative Government contracts. At a time when public sector workers have to go to food banks to survive, it is hard to imagine a more insulting parody of fairness than greedy corporations directly profiting from the public purse, using every trick in the book to avoid paying tax.
At a time when there is massive underfunding of the NHS and schools, as well as of local authorities for the services they provide, we cannot allow half-measures to prevail. More needs to be done to secure the money for our much-needed cash-strapped public services. Everyone knows that further investment in HMRC is needed to recover these large sums and that any additional staff who are brought in would, in effect, pay for themselves within weeks. More needs to be done, but action is needed right now, because these measures do not go far enough.
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