Daily Archives: December 20, 2011

Protest works! Reflections on the report on tax dodging

Today, a respected cross-party parliamentary committee released a damning report into dodgy tax deals struck between big business and bosses at HM Revenue and Customs (HMRC). It has made headlines, not just in the Guardian, but in the Daily Mail, the Sun, the Telegraph and as the leading story on the BBC Today Programme.

What conclusions can we draw from the report and the reaction to it?

1. There are systemic failures at HMRC

The Public Accounts Committee criticised the ‘cosy’ relationship between HMRC bosses and corporations, the way deals are decided and signed off without oversight, and the way large corporations get preferential treatment. We already knew that Dave Hartnett was dodgy. But the problem is systemic. It’s deeper than Dave.

2. The government has to correct these problems or lose credibility

So following the report of a respected cross-party committee, headlines in papers from the Guardian to the Daily Mail and quotes from thinktanks across the political spectrum, you’d think it was basically impossible for any reasonable person to maintain confidence in HMRC’s deals with large corporations that are costing the public purse £25billion annually.

How do the government react? David Gauke, exchequer secretary to the Treasury, affirms his “full confidence in HMRC and its current leadership.”

Unless the government takes meaningful action to change the culture at HMRC and shows it is serious about clamping down on corporate tax avoidance with new legislation, this case will eat away at its credibility – particularly the claim that ‘there is no alternative’ to savage public spending cuts that are making Britain a colder and harsher place for us all.

They certainly won’t regain credibility though their strategy to cut thousands of jobs at HMRC, making it even harder for the department to collect tax.

Of course, we can’t trust the government to do what is right. That’s part of the reason we’ve been taking direct action against tax dodgers. And the reason UK Uncut Legal Action is starting legal proceedings against HMRC to make them recover the £20million in tax dodged by Goldman Sachs. If the government won’t chase rich corporate tax cheats, we will.

3. Protest works

Amazing work has been done by Private Eye, trade unions, campaign groups, and NGOs to shed light onto the murky world of tax avoidance. But the catalyst for change has come from popular protest. The politics of the street has demanded the attention of politicians, the media and the corporations themselves.

Why is it Dave Hartnett’s reputation now lies in tatters with a startling coalition of organisations demanding change at HMRC? Because of ordinary people taking direct action. Because of the creativity and bravery of people up and down the country who have taken on the tax dodgers and demanded change from the government. Because of the actions organised from Aberystwyth to Edinburgh, Sheffield to Brighton, and Tunbridge Wells to Nottingham. Because of people coming together to stand up (or sit-in) for tax justice as an alternative to the governments’ cuts. Because protest works.

UK Uncut was born in the doorway of a Vodafone store in London just over a year ago. That day, 70 activists shut it down to protest against their £6 billion tax dodge. This started the process which has culminated in today’s damning parliamentary report into tax dodging, forced the retirement of Hartnett and, on Thursday, will see the start of legal proceedings against HMRC.

Today everyone who has played a part in UK Uncut should feel proud of themselves. It is important to remember the power of ordinary people taking action together. And it’s important to keep on going until the government is forced to accept there are alternatives to the cuts.

See you on the high streets, in the headlines, and if you are HMRC and Goldman Sachs, in court!

Parliament releases damning report on dodgy corporate tax deals

We can be one of the first to reveal the details of the Public Accounts Committee’s (PAC) damning report- released today. It describes systematic failures and fundamental concerns at the way HM Revenue and Customs (HMRC) operates regarding its handling of billions of pounds worth of tax disputes.

This report is an important reflection of fourteen months of UK Uncut campaigning by people up and down the country.

Here’s a summary of the key points from the PAC report:

HMRC is currently sitting on £25bn worth of tax disputes from 2,700 companies.

There is an unfair disparity between the way some large corporations and ordinary tax payers are treated by the tax office. Companies have millions wiped off their tax bills, or they are given ten years to pay their liabilities. Small business owners or individuals do not receive this favorable treatment.

HMRC is unaccountable and secretive. Neither parliament, nor the general public, have any oversight. The PAC finds it farcical that HMRC keeps details about high value corporate tax deals that involve billions of pounds secret. They argue that there is less justification for keeping tax information about big companies confidential than for information about individuals.

That when called into Parliament to answer important questions about controversial tax details that have lost the public billions of pounds, Dave Hartnett – the chief tax man – gave “imprecise, inconsistent, and potentially misleading” information. Senior officials are seriously failing to be open and accountable.

That HMRC routinely ignores its own governance procedures and that we have a ludicrous situation where those negotiating tax deals can also ‘sign off’ on these deals, sometimes even without third party legal oversight. This means that some of these tax deals could not only be outrageous, but also unlawful.

There is a complete failure by tax officials to take any responsibility for HMRC’s failings.