UK Uncut: budget will encourage tax avoidance by big business – George Osborne is no Robin Hood


Media Advisory

UK Uncut will have spokespeople available to discuss the likely budget announcements on tax avoidance, tax rate changes and stamp duty, and will be protesting at and near Downing Street from 11am. For interviews in the studio or at the protest, please call 07591 992 825 or 07415 063 231.

A further reaction to the budget will be available at 1pm.

George Osborne is expected to announce in the budget today that the government is clamping down on tax avoidance through implementing a General Anti-Avoidance rule. However, anti-cuts direct action group UK Uncut say that this is ‘PR fluff’ and that the budget will announce new policies which make tax avoidance easier for multi-national companies and banks, such as Vodafone and Barclays. The Treasury has admitted that £1 billion each year will be lost to the public purse as a result.

Christina Samson, supporter of UK Uncut said:

“We know that this budget will actively encourage big businesses and banks to avoid tax by making it easier for them to stash profits in tax havens, like Switzerland, which will cost the UK at least £1 billion every year. This has happened because the budget was written by tax dodging big businesses and banks, like Vodafone and Barclays, for their benefit.

“The tax threshold for low earners might be raised but at the same time the tax rate for the rich will be cut, the anti-avoidance rules are so weak they are just PR fluff and the changes in stamp duty may be uneforceable, so let’s not be fooled into thinking that George Osborne is Robin Hood.

“The fact that the government is privatising the NHS, schools and roads and cutting benefits, pensions and public services, while giving corporations a helping hand to avoid paying their fair share, shows that this government is making a choice to reward big business and punish people, resulting in unemployment, poverty and ill health.”

ENDS.

Notes to editors

It has been reported in the Guardian that is expected that George Osborne will announce the budget will bring in new exemptions, so that the CFC rules only apply if the tax haven subsidiary can be shown to have most of its dealings with the UK. So under the new rules, if a company transfers ownership of its brands from Ghana to Switzerland, its profits on those brands won’t be subject to UK tax. It now has every incentive to shift its profits to the tax haven.

If a UK-based multinational sets up a treasury company in Switzerland and puts equity into it from the UK, which is then passed on in loans to its other subsidiaries to run its operations, with interest on the loans flowing back in profits to the tax haven. The tax rates on these profits will be a maximum of just one-quarter of the current UK rate.

The monetary assets working group advising government, for example, consisted of Vodafone, Shell, Diageo, Tesco, G4S, International Power and BHP Billiton. The intellectual property group included Kraft, GlaxoSmithKline, Associated British Foods, Cable & Wireless, and the insurance working group had Aviva, RSA, XL Group, Prudential, Lloyds and AIG. The banking group came from banks including Barclays, which is famous for sophisticated tax avoidance.

Felicity Lawrence, The Guardian, 20 March 2012.