Green party leader Caroline Lucas will table a new Tax and Financial Transparency Bill in Parliament today, to tackle what she describes as "the UK's billion-pound tax evasion scandal", reports Shamik Das.
Green party leader Caroline Lucas will table a new Tax and Financial Transparency Bill in Parliament today to tackle what she describes as “the UK’s billion-pound tax evasion scandal”. The bill follows the publication earlier this week of a report by Tax Research UK revealing around 500,000 companies ‘disappeared’ from the UK’s Register of Companies in the year to March 2010 – resulting in at least £16 billion of tax lost to the Exchequer.
Urgent measures are needed to stop companies that are formally dissolved from trading fraudulently, she says, undermining honest businesses who pay their taxes.
“This Bill would ensure that banks have to provide details on all accounts they maintain for companies operating in the UK so that H M Revenue & Customs and Companies House can chase those companies who do not file the returns they’re obliged to make for the missing information – and the tax they owe.
“This simple law could recover billions of pounds of lost tax for the UK… Secondly, the bill would force companies to ‘publish what tax they pay’, requiring all companies filing accounts in the UK to include a statement on the turnover, pre-tax profit, tax charge and actual tax paid for each country in which they operate, without exception.
“If they only trade in the UK, this has no impact on them. This information would, however, mean that the answers to the questions asked of Barclays Bank earlier this year about where it earned its profits, how much profit was recorded in tax havens, and where it paid its taxes could be answered for all companies trading internationally…
“This information on where companies make their sales, record their profits and pay their taxes is vital if we are to ensure that multinational corporations make a fair and proper contribution to our society. Corporate social responsibility is not an option for companies – and paying tax to the country that provides them with their opportunities to trade is an essential part of it.
“You can’t be socially responsible and accountable unless you say where you are and what you do in each place that you trade.”
“…controlled by the world’s major powers, notably Britain and the United States…”
As Lydia Prieg, researcher at the new economics foundation, wrote on this blog:
“Britain has a large array of tax havens affiliated with it in the form of “Crown Dependencies”, which include Guernsey and Jersey, and “Overseas Territories”, such as the Cayman Islands… Moreover, a recent OECD report claims that one of Britain’s jurisdictions, Guernsey, has not yet fully complied with the very minimal international standards on tax transparency…
“The UK must no longer pretend it has nothing to do with this offshore network, and instead should shoulder its responsibility to guarantee the “good governance” of these jurisdictions. At the very least, the government should ensure that Guernsey meets the minimal international standards.”
The Liberal Democrat election manifesto pledged to tackle:
“…avoidance and evasion, with new powers for HM Revenue & Customs and a law to ensure properties can’t avoid stamp duty if they are put into an offshore trust.”
…yet the coalition agreement doesn’t once mention tax evasion.
Danny Alexander may have said:
“We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra. This will mean: A crackdown on those hiding money offshore. And that includes not only those who illegally evade tax but those who use entirely legal means to avoid paying their fair share to the taxman.”
And Nick Clegg:
“We will crack down on the super rich who hide money overseas.”
Now is the chance for them to prove it – by backing Lucas’s bill.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.