Ending Barclays' Tax Avoidance
Banks often cite moving abroad as a possible result of tightening up against them, but surely full corporation tax on the domestic business would amount to more than what they are paying?
Words fail me, im flabbergasted that the system can be this skewed
Yes - and large corporations too. The other night a spokesperson for the Institution of Directors debated with a member of Uncut, and tried to make out that if corporations were expected to pay their taxes, they will end up recovering about half the money from employees and customers....
Hang on a minute....corporation tax is paid on profits. This is the surplus after labour has been remunerated, and after consumers have paid all their costs. All their costs have already been covered. What is more, contributors of labour have already paid their taxes. Consumers have already paid their taxes. If corporations are in a frame of mind to think they can recover their corporation tax contributions through further reductions in labour and further price rises, it amounts to a private system of taxation in which employees and consumers have to pay twice (once to the state to support a political elite, then again to private enterprise to maintain a business elite). We have to make the argument in a way that makes comments like this politically, morally and legally indefensible.
Yes - the loss of limited liability would be a big disincentive. However, there would have to be a transition period where the legal entity would exist (without legal person status) so that claims can be brought against it to recover the unpaid tax. The loss of 'legal person' status would stop the company in its tracks if it lost a case brought against it so - in my view - it would be effective precisely for the reasons that you mention above.
After the claims are paid, by all means allow it to convert to a partnership and make shareholders directly liable. I really don't care what system is used so long as it has the teeth to end tax avoidance and return the monies denied to the public back to the public.
And yes, this system would have to apply to CICs and other social enterprises registered as CLGs and CLSs. Personally, I would not advocate the 1% turnover fee because this would severely (and unreasonably) punish non-profits.
As for Barclays, it is possible to find out the earnings of their UK registered companies (albeit retrospectively). I can retrieve financial information on all their UK registered companies using the Fame company database at my university (albeit only up to their most recently filed accounts). The issue, however, is described reasonably well in the following press article:
The article uses the phrase 'effective tax rate' - a useful concept, perhaps.
Sheffield Business School