A Taxing Time!

Dodgy Dave Asked: "What do you think about British people and corporations  holding large amounts of money abroad in off shore accounts. Such as those, in Swiss Bank accounts in a bid to avoid paying tax."

What we pay in tax, is a personal gripe of just about everyone in the world. I have a belief, if you earn the money, you pay the tax. If the money is earned illegally then you get to pay a much larger rate of tax. The colourful ex colonial tea tax dodgers in north america have a saying. "There are only two things certain in life, paying your tax and death."

Wealth, is what everyone strives for. Wealth and obtaining the wherewithal of wealth is much more addictive than any other drug. Some of us go to work every day to create a short term period of wealth. Which we then redistribute on buying food, shelter and clothing for our families. The vast majority of us are grudgingly happy to do this for those we love. However, secretly we all have a yearning to have a little nest egg. A little pot of gold, all of our own, set aside for a rainy day.

So if we (the little man) get the occasional opportunity to do the odd cash transaction, and avoid paying a bit of VAT, it adds a little spice to life. So we save a few quid, we feel good about it. we know that whatever was saved will soon be spent on other things.  We get on doing our day to day lives where we pay what ever is due. There are others, (small to medium sized man) who have such a big pot of money, they can employ a team of people to look for ways of reducing the amount of tax paid. They don't avoid paying a few quid, they reduce paying and save a few thousands. Then there are the (Big Boys) the large corporations such as Amazon. They don't look at ways of reducing their rate of tax. They look at ways of avoiding payment of any tax at all. This can be in billions of pounds.

Collecting unpaid tax is quite a simple process.

If you the "little man" are caught on the fiddle. The tax man will come and slap your arse. He takes the money - in full and with interest. You either learn to be straight or to be more careful. 

The "small to medium sized man" gets his funds sequestrated and sometimes gets to spend some time in one of Madge's rest and recuperation establishments. Not in the bar, but behind the bars. 

The "Big Boys" such as Vodaphone would get to take out to lunch Dave Hartnett a British civil servant who served as the Permanent Secretary for Tax at HM Revenue and Customs until his retirement in July 2012. 

When it came to the little man. Hartnett was widely criticised for the HMRC "scandal" that saw millions of people being asked for back dated tax after it was alleged that his department had failed to collect PAYE correctly. But we all paid up, we after all had no choice in the matter.

The Big Boys at Vodafone and their Corporate tax avoidance was a different matter. Following allegations of tax evasion of up to £6 billion, illustrated in a series of articles in Private Eye. The articles alleged preferential treatment of Vodafone due to personal connections between Hartnett and John Connors, Vodafone's head of tax and a former colleague at HMRC.

The Big Boys at Goldman Sachs and their Corporate tax avoidance was also yet another different matter. In May 2011 Private Eye alleged Hartnett personally "shook hands" on a deal over a long-running tax avoidance dispute dating back to 2002. Letting the US bank off around £10m in interest.

In October 2011, The Guardian published leaked papers regarding complaints that Hartnett personally intervened in settlement cases and agreed to secret "sweetheart deals" without explanation have also been published. 

Hartnett was presented by activists from UK Uncut with a spoof "Golden Handshake Award" at a New College Oxford dinner honouring his retirement in September 2012. Several activists donned evening dress and name badges indicating they were from Vodafone and Goldman Sachs and effused over Hartnett's help in saving those companies billions of pounds in taxes. Chairman and head of chambers Robert Venables QC, close friend of Hartnett who was at the dinner, first told the intruders to "depart immediately, before we set the dogs on you", before finally ejecting them with the words "You are trespassing scum. Go".

When it came to corporate hospitality, Hartnett was named by City University London in July 2010 as the most "wined and dined" civil servant in Britain, having been treated to corporate hospitality 107 times over a period of three years. Harnett stated that his approach to tax disputes with large corporations was "handling disputes in a non-confrontational way and collaborating with customers wherever possible". Harnett claims that this approach secured larger settlements of tax collected faster and more cheaply than if HMRC had taken the taxpayers to court. This is disputed by Private Eye, who cite particular deals made by Harnett including the arrangement with Vodafone that lost the exchequer approximately £6 Billion.

Regards.

Uncle Mort.