‘We’re all in this together’ (except for the multinationals)

by Ray_North on March 3, 2011

It takes the biscuit.

The government intends to introduce a whopping great tax-break to international companies. In plans to make amendments to the Tax Act 1988, it is proposed that companies will no longer pay Corporate Tax on profits they generate abroad. Let me explain, at present a company that generates profits abroad will pay to the UK Treasury the difference between the rates of tax in that country and here – this will change: under the new proposals they will no longer have to pay anything on profits made abroad. That means that massive multinational companies more often than not banks will no longer have to pay any tax on substantial parts of the profits that they make.

I had to read this three times to make sure I understood it – I must have got it wrong, I mean, aren’t we in the midst of the worst deficit in our finances ever? Aren’t we all having to accept that the UK is so skint that we can’t afford libraries or school repairs or police officers? So what is this all about? How can anyone justify giving away this amount of money?

Well according to the Government the reason is globalistion, because in this world of international capiltalism we need to make our taxation system as simple and as competitive as possible to encourage foreign companies to stay in the UK rather than take themselves abroad. They make it sound like we are in some way running a dangerously socialist and progressive tax system that must be done away with before everyone in their right mind goes abroad – the reality is somewhat different as the only other country to have introduced a change like this is Switzerland, everywhere else, multinationals pay tax on foreign profits.

Where will all this end – do we allow Multinational Companies to do what they want, allow them to be exempt from paying any taxes, or having to comply with any employment law or corporation law? Do we pander to their every need and allow them to ultimately establish themselves as stateless nationless entities – or do we say to them, you have to pay your tax fair and square in exactly the same way as everyone else – especially in the current climate, especially as a great number, indeed most of the companies benefiting from this tax break are banks who owe the state for bailing them out when their own corrupt and incompetent practices almost brought the world’s economy into meltdown in 2008.

I’ve had enough of the lie that ‘we’re all in it together’ we’re not- it is one rule for ordinary people and another for those involved in international business.

{ 1 comment… read it below or add one }

George_East March 3, 2011 at 4:18 pm

This is a huge issue and has been barely reported so far in the UK – a piece by George Monbiot in the Guardian and Peston’s piece that you link to. It has not been covered as a proper news story at all, so far as I can tell. I first heard about it through the brilliant American site http://www.nakedcapitalism.com. And it is far far worse that you make out – yes multi-nationals will be able to offshore their profits and avoid paying tax on them but they will also be able to keep the costs associated with making those profit on-shore and thereby set them off against any domestic corporation tax liability. So it is a lose-lose from the tax payers point of view. Once this is implemented large corporations including the banks will effectively only be paying UK tax if they want to for PR reasons.
This is about starving the state of revenue – pure and simple. It is US conservative style drown the state in the bath tub stuff.


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