Increasing company tax contributions
Large companies in the UK do not contribute their fair share of tax to the exchequer. This leaves individual taxpayers to pick up the tab, means that vital public services are underfunded, and gives large companies an unfair advantage over small businesses that create jobs and growth.
1.Large companies are not asked to pay enough tax and receive unnecessary reliefs.
Like many countries, the UK is pursuing a misguided policy of ‘competitiveness’ in an attempt to stimulate economic growth. But lower corporate tax rates cost over £16bn every year, while corporate tax breaks cost many billions more.
Tax cuts and subsidies attract the wrong kind of business to the UK (predatory, dependent capital, and unproductive sectors like real estate). They do not increase tax revenues by stimulating economic activity; instead, they reduce tax revenues. Higher company taxes and lower subsidies do not hurt workers and consumers; they reduce large companies’ unproductive cash reserves. Low corporate taxes and high subsidies undermine public trust in the willingness of politicians to run the economy in the interests of its people, and pose a threat to democracy itself. This extreme tax-cutting is ideologically driven, and privileges the interests of the wealthiest in society over everyone else. |
2.Large companies can often avoid paying some of the tax that they are asked to pay.
Tax avoidance by large companies costs the UK at least £11bn every year. The UK has consistently failed to take the necessary steps at the domestic and global levels to curb corporate tax avoidance, despite its rhetoric on the issue.
Tax avoidance can only be fixed in the long term by reforming the global financial system (at the centre of which are many of the UK’s institutions). The UK can also bring in key reforms unilaterally, and increase funding for HMRC enforcement (yielding £97 for every £1 spent, for large companies). At the same time, many companies undermine the current system, exploiting loopholes to reduce their (or their clients’) tax bills in the UK. These include big technology companies, helped by the major accountancy firms, banks and legal firms. Tax avoidance is not inevitable. Public pressure on the government and on the key instigators can consign it to history. |
The FAIRSHARE campaign
Tax Justice UK is launching the FAIRSHARE campaign to increase company tax contributions. The campaign has four objectives, covering these two key issues:
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Businesses should be asked to pay more tax
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Businesses should pay the tax that they owe
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A.A public review and cost-benefit analysis of all corporate reliefs and subsidies
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B.Abandoning the ideology of ‘tax competition’ and increasing the rate of corporation tax
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C.Unilateral and multilateral efforts to reform tax rules in order to reduce avoidance
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D.Better enforcement of large companies to ensure that they pay the full amount of tax due
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ACT NOW
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