I agree with your editorial, “Multinationals must be called to account” (19 December). It reads: “The suspicion is that no sooner have very bright civil servants finished writing a new addition to the corporate tax code, then they are recruited by top accountancy firms to promote ideas on how to get round it.”
Gamekeepers turning into poachers is not a recent phenomenon. The practice has been going on for the past 40 years.
In my early career I was reassured that “the previous group tax manager had been told that companies were never intended to pay the new corporation tax in the UK”.
International tax avoidance structures have developed over many years (long before the birth of Google, Amazon and Starbucks) in the knowledge that these practices were legal and acceptable.
At the same time the Inland Revenue lived up to the challenge with officers who were experts in tax fields, such as transfer pricing, and backed up by crack teams. The situation has steadily changed.
I agree with your comment: “HMRC needs to have resources”, as any meaningful pursuit of the multinationals is not viable otherwise.
What is surprising is that the House of Commons public accounts committee should be surprised at the current situation.
The white paper indicated that a future Scottish Government would seek simplification of the taxation system. Abandoning a complex code is a good beginning.
It is to be hoped, however, that if and when the division of the HMRC “assets” took place, an appropriate number of officers with the requisite expertise in anti-avoidance would be transferred to the new Revenue Scotland. If for no other reason, they might be required to respond to cross-Border queries.
Given the circumstances of the case, where there appeared to be what was in effect a family business afflicted by secrets and lies, with a subsequent lack of clear guidelines on financial issues, it’s hardly surprising that the Grillo sisters were found not guilty of defrauding Charles Saatchi and Nigella Lawson.
What is still startling, however, are the revelations of the lifestyles of the super-rich, who appear to live in a parallel universe from our own. The results are clearly as bad for them as they are for the rest of us.
Market capitalism may be the least of the evils in terms of economic theory, but it can at least be moderated by fair levels of taxation.
The Scottish Government’s Scotland’s Future document makes very little reference to fair taxation as a means of achieving greater equality, yet surely an independent Scotland should make serious efforts to challenge a celebrity culture in which public figures are able to spend obscene sums of money on luxury goods while increasing numbers of people are struggling to pay for basic items.
(Dr) Mary Brown
Neill Cooper (Letters, 20 December) is correct in saying that the Inland Revenue is hounding the taxpayer.
It currently ignores standard accounting principles and ignores parliamentary law.
I ran a small agricultural enterprise farming bare land, my only asset, growing barley, using a contractor.
I made small profits and paid my taxes. I sold 35 per cent of my business land complete with growing barley to another farmer who continued to use the same contractor.
I claimed entrepreneur’s relief, which was refused by the Revenue, which said that I had only sold an asset – like a tractor or a cow, I suppose – not part of my business.
My turnover and profit fell by 35 per cent in subsequent years.
At my appeal tribunal the judge said she would have granted the relief if I had stopped farming after the sale. This is not a requirement of parliamentary law. The Treasury said that the Revenue had designated my land – my only business asset – as just an asset.
The new owner pays no tax in this country. He lives in the Isle of Man.