The Conservative donors who own the JCB digger company may be hit with a £500 million tax bill according to the Guardian.
HMRC has been investigating brothers Anthony and Mark Bamford’s extensive offshore business empire for over three years.
The Bamfords are alleged to have aggressively minimised the payment of UK taxes. HMRC may seek to recoup large sums of lost tax if the allegations are proven correct.
In September a Labour MP asked the Conservative Party if they would return £10 million donated to them by JCB.
JCB were also recently spotted at the Labour Party conference, exhibiting along with many other businesses on the conference floor.
£42 billion in missing tax
JCB is just one multinational company operating in the UK. The obvious question is: to what extent might other big companies be aggressively minimising their taxes?
The responsibility for answering this question lies with the UK’s tax authority, HMRC.
Yet the Revenue is woefully under-resourced for the job at hand. Earlier this year MPs slammed the government for underfunding the tax authority.
Members of Parliament’s Public Accounts Committee said HMRC did not have enough staff to properly investigate underpaid tax. And estimated that up to £42 billion could be missing in unpaid tax.
Parliament also said that for every £1 invested in HMRC investigations, £18 was recovered in additional tax.
Global tax avoiders
Aggressive tax avoidance extends beyond the UK, of course – and may help explain how just 2,756 individuals have amassed over £13 trillion of wealth between them.
These are the billionaires. And they are paying on average between 0 and 0.6% tax on their wealth, a stark new report showed this week.
Using tax loopholes, shell companies and profit shifting, the world’s three thousand richest individuals have been operating on “the borders of legality”, the report from the EU Tax Observatory argues.
The Tax Observatory – which was set up to steer EU tax policy – argues a 2% annual tax should be introduced on billionaires’ wealth. They say it could raise £250 billion annually.
It’s encouraging to see a major tax body back wealth taxes on the super rich. Our own research shows up to £50 billion a year could be raised in the UK alone through higher taxes on wealth.
Beyond wealth taxes, loopholes for billionaires and multinational companies must be closed – and our tax authorities properly resourced to scrutinise them properly.
Rebuilding our broken society
This is not simply a question of fairness and transparency, but one of an unequal and broken society.
3.8 million people in the UK are living in destitution. They can’t afford to meet their most basic needs for shelter, food or energy. That’s the shocking finding of an investigation by our friends at the Joseph Rowntree Foundation this week.
This is a disgrace. Our politicians should hang their heads in shame. The safety net we all rely on if we fall on hard times is totally failing nearly 1 in 10 people in the UK.
But something can be done. There is money available to fix these problems, as our executive director Robert Palmer told Times Radio this week.
We can renew our broken society, taking more from the very very rich and repairing our NHS and public services.
HMRC may have missed out on up to £2 billion in tax from just seven big tech firms shifting their profits out of the UK.
This week our friends over at TaxWatch investigated the potential lost tax revenue in the UK in 2021 from seven major United States tech companies.
TaxWatch poured over the accounts of a number of companies including Amazon, Microsoft, and Apple. TaxWatch estimated how much tax these companies may have been liable to pay to HMRC had they declared profits at the same level they do globally.
The findings amount to £2 billion in potentially missed tax. Only a fraction of this figure, just £758 million, was actually paid to HMRC. This is on estimated UK profits of £14.8 billion. The companies say that they comply with the relevant tax laws.
Put into context, £2 billion could pay for more than 50,000 nurses, or over 40,000 classroom teachers for a year.
Smoke and mirrors
Complicated corporate structures, offshore schemes and favourable tax systems allow companies like Amazon and Apple to boost their bottom line while our schools scratch around for funding.
Given the lack of transparency about where companies make their money, and where they pay their taxes, it’s very difficult to get an accurate picture of what’s going on.
When our NHS is on its knees, schools are crumbling and public services are cut to the bone, it is inexcusable not to clamp down on multinationals that shift their profits elsewhere.
By Robert Palmer, Executive Director Tax Justice UK
I’ve just got back from the Labour Party conference in Liverpool, where I was making the case for a fair tax system.
I was joined by my colleague Rachael Henry, our Head of Policy and Advocacy. She was also at Conservative and Lib Dem conferences talking to politicians of all stripes.
In Liverpool we met countless MPs, policymakers and journalists and pushed our message: that raising taxes on the super rich could fund a transformation in our NHS, public services and society.
I was struck by how often wealth taxes came up. Almost every session we went to had someone asking about taxing wealth. The pressure on Labour is growing. This is a real sign of progress. Our campaign to change the public and political debate on tax is working.
Keir Starmer, the Labour leader, used the conference to set out his vision for the country. He talked about the power of government to make people’s lives better. The Labour leader also doubled down on his commitment to tackle the climate crisis.
Promising investment in the NHS, schools and green energy, alongside a massive programme of housebuilding, Starmer tried to draw a clear dividing line between Labour and Conservatives.
Our schools are crumbling, NHS waiting lists surging, councils are going bankrupt all over the country. People are fed up and desperate for change.
But while there were nods towards Labour’s past achievements, and a promise to rebuild Britain, there wasn’t much detail from Starmer on how this would happen. Some of this is to be expected a year out from the general election. But it did leave me wanting more.
Where could Labour raise new revenue?
The public realm is heading towards ruin. We need a plan to save it. We need major investment of public money over several years in our services to keep them running, and make them fit for a modern, future Britain.
The question is does Starmer have a plan to save our NHS and public services?
Labour has some excellent individual policies – like clawing back £7 billion lost in Covid fraud, ending non-dom status and applying VAT on private schools.
But the tax rises that Labour has promised so far add up to just £5 billion a year. Given that the NHS budget alone is £180 billion a year, this won’t touch the sides.
At Tax Justice UK, we’ve set out six wealth tax policies that could raise up to £50 billion a year. This would go a long way to rebuilding Britain.
Labour could go further on their plan to tackle fraud as well. About 5% of the tax owed each year isn’t being paid. That adds up to at least £42 billion in missing tax. It could be recouped if HMRC were properly resourced.
On the train home I was left feeling that Labour is too afraid to talk about raising and investing the huge amounts of additional money necessary to make good on their transformational vision.
Yesterday Rishi Sunak delivered an hour-long speech at the Conservative conference setting out his agenda. I was struck by the prime minister’s lack of vision. He failed to properly address the huge challenges facing the UK.
NHS waiting lists are growing and growing, while our schools literally fall apart. The cost of living crisis is throwing millions into poverty and turbocharging inequality; while climate breakdown becomes ever more obvious to all.
Where were the solutions, the vision for the future? I couldn’t see it.
To be fair, this lack of serious vision isn’t a failure only of the Conservatives. Labour’s leadership are also, putting it as politely as possible, tight-lipped on how they would solve the serious challenges facing the UK.
Fairer taxes can help build a brighter future
In this vacuum of political leadership, it’s never been more important for us to shout as loud as we can that there are solutions to these problems – that things can be done. That there is money to invest in our futures.
We know the government has options. The UK could raise up to £50 billion extra a year by closing tax loopholes used by the super rich – and by taxing wealth more.
Redirecting the massive private wealth of the super rich into our grassroots public services would reduce wealth inequality: taking from the rich and giving to ordinary workers.
Taxing the super rich could also reduce gender inequality. A fascinating new report by the Women’s Budget Group (WBG), which we fed into, shows how men have on average 35% more wealth than women – it argues that taxing wealth more could help redistribute this and level the gender playing field. You can read more about our work on tax and gender with the WBG here.
Politicians could also introduce new taxes on the biggest polluters – oil companies and polluting corporations – raising billions of pounds every year.
This money could help fund a fair green transition: new renewable projects and better public transport, creating high quality jobs in the process.
People want action now
These options – to raise more revenue from the super rich and the super polluting – are all open to the government, and the public support them.
A new report from our friends at the IPPR last week shows exactly this: people support higher taxes if that money is spent on public services.
Our executive director Robert was on Sky News last week arguing that the public do not want to see more austerity.
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