Debunking UK Uncut

Sue Collini

I don't think the kind of person who would attend a UK Uncut event is likely to be open to any kind of reasoned or informed debate. (See the Grauns preposterous CiF thread.)

Collini out.

Andrew Zalotocky

UK Uncut are looters. But there's going to be a lot more of this nonsense over the next few years as the left begin to realise that we really don't have the means to keep funding the deficit, the welfare state and a vast government bureaucracy. They will become increasingly desperate to find ways of increasing tax revenue by any means possible. That means increasingly hysterical and irrational attacks on anybody who seems to have a bit of money to spare.

David Booth

"UK Uncut" are not interested I suspect in driving economic recovery in the UK, but more towards a general anti-capitalist sympathy.

Andy Leeds

One notes these paragons of virtue and high principle have not been picketing the offices of The Guardian who use all manner of 'tax avoidance' schemes. Guido wrote and asked !

Baron

not unlike the Plane Stupid crowd, these uncut nutters, too, should be hospitalized in a mental institution, their self-harm is painful to watch.

KRodgers

I would say this article should have been titled 'Twisting the Truth about UK Uncut'. Let us first tackle the nonsense about these firms collecting VAT for the government and the nonsense about PAYE, these firms are not doing this out of their own good nature, they are doing it as it is an unavoidable part of British law.

With regard to Vodafone's tax avoidance; they used a foreign holding company as the go between in a deal to buy another phone company, this was done to avoid paying UK tax. It may well be legal but it is akin to money laundering.
Additionally:
1. Why did Vodafone put aside over £2.2bln to pay the UK tax bill if it was so clear that it would only amount to a little over £1.2bln?
2. Why had the dispute been going on with HMCR (aka the Tax Man) for so long - since 2000 when Vodafone purchased Mannesmann?
3. Was the reduced amount of tax that Vodafone paid in any way connected to them hiring an ex HMCR official who had been in charge of tax on big business in 2007?

On to Boots, it cannot be claimed that Boots is anything but a UK company, it may well be using a Swiss PO Box as its registered address but that is nothing more than a fiddle so that they pay less tax.

To try and suggest that UK Uncut cant have it both ways (demanding Vodafone and Boots pay their tax) is ludicrous - Vodafone is a UK based company and Boots is a UK based company that uses a Swiss address just to avoid tax.

As for Corporation tax being too high, this too is wrong. By allowing big corporations big tax breaks it makes it harder for small businesses to gain a foothold as they find they cant compete. If we are interested in having good communities (and we all should be) then we need good local business supporting those communities, both with employment and services.

Noa.

The problem for the Right is that its supporters, unlike those of the leftist rentacrowd, are to busy supporting their own families and the workshy like Uncut, to be activists and demonstrators themselves.

Verity

I don't read anything that has cutesy-poo faux nursery school letters. I already know everything I want to know about people who address adults in infantile iconography. For example, I know they have nothing to say worthy of adult attention.

Michael

Dead right Noa. And the same applies to local councillors: so much easier to find leftists than small business men/women with time to spare.

Victor Southern

Polly Toynbee's Rent-a-mob. They seem to be involved in specifically illegal activities.

Jonathan Burke

The Right's capacity to caricature the Left in a desperate bid to absolve itself of its responsibility for the kind of conventional wisdom that has dictatated our economic policy for the past 30 years knows no bounds!

Was it the UKuncut "nutters" who continually pressed for the deregulation, low headline tax rates, and obscene pay culture that led to the largest financial services meltdown and subsequent recession in history?

The fact is, tax avoidance and evasion cost the exchequer over £100 billion per year - leaving us with the largest tax gap in history. If we were to introduce broad anti-avoidance legislation and punish evasion with significant fines and custodial sentences we could net the vast majority of this overnight. This would not only eradicate the structural deficit but also leave us with a surplus - all without raising or introducing a single new tax - and negate cuts in public service investment.

The only taxes that are too high in this country are the regressive ones; funny that I don't see many Spectator readers railing against those, though.

Oh, and if you're thinking of patronising me with some deliberately alarmist 'highly mobile capital' nonsense, I challenge you to provide me with a single significant example of capital flight - and don't bother with WPP because they barely paid any tax before they jumped ship to the booming low tax economy that is the Republic of Ireland.

Policies advocated by the Spectator-reading, sado-monetarists have immiserated millions of decent people - who've lost houses, jobs, and life savings to line the pockets of a shrinking number of high net-worth individuals. If you're only answer to the legitimate concerns of those = like UKuncut - who're challenging your flawed paradigms is to hurl juvenile insults at them, then you really are in trouble.

Verity

Why does the left always use nursery school lettering? I think it would make an interesting PhD dissertation.

Obviously, they think the faux naif aspect will safeguard delicate people from feeling threatened by literacy.

KRodgers

It is no surprise to see that the author of this mish-mash of corporate excuses is the Communications Officer (read PR man) for the IEA www.iea.org.uk this is a 'charity' which wants to promote lower levels of regulation for business, I think we all remember what happened when the banks had fewer regulations imposed on them.

In short this article is nothing more than a hatchet job against those who are demanding more fairness in a very unfair system.

Dimoto

Like death and taxes, the Socialist workers, Neo-anarchists, Animal Rights Groups, Friends of the Earth, Greenpeace ... and Uncut, are always with us.
Mostly, the same people, living their delusions.
Yawn.

Mucker

Ha ha JB, so your solution is to “tax more and regulate” more and then we will get the b**st"ds. Nice...as Borat would say (you related?). The private sector pays for the public sector => geddit? Not saying the public sector is at all bad, just how it is financed. I think you will end up as an apologist for the actions of the last labour government...

Major Plonquer 1

Jonathan Burke - your lack of knowledge of even basic legal precepts is staggering. How can you punish 'evasion'? That's bonkers!

Does that mean you fine every driver who drives under the speed limit for 'evading' speeding fines? You charge every pensioner who buys a cheap loaf of bread with evading VAT?

May we all take it that you are the result of 'education, education, education'?

Fergus Pickering

What I don't understand, Jonathan Burke, is that if it were as easy as you say it is to take sacks of gold from wicked big companies why didn't your lot do it in the thirteen years they were in power? Or are they not your lot? Who ARE your lot? The SWP? International Marxists? How do YOU vote? Or do you vote at all?

KRodgers

Major Plonquer, a well chosen name considering *your* lack of education. The following will give you the information you need http://goo.gl/exSVj

The fact that you think you can equate someone obeys the letter and the meaning of the law with someone who finds loopholes in laws and uses them to evade tax really shows your inability or unwillingness to understand the issue.

If you understood the basic legal precepts of anti-avoidance measures, or were even aware that they are in place in many countries, I am sure you would have saved the rest of us the time it took to read those 3 silly paragraphs of yours.

May *we* take it that 'private education, private education, private education,' didn't really prepare you for the world you are now in.

Nick

I'll take them a bit more seriously when they occupy the Guardian for their tax evasion

Tim Worstall

K Rogers:

Try reading the actual report.

"1. Why did Vodafone put aside over £2.2bln to pay the UK tax bill if it was so clear that it would only amount to a little over £1.2bln?

Because provisions in accounts have to be for the very worst that could possibly happen. So the provision is wjhatever it is that HMRC is actually claiming, not what you think the court will actually rule.

2. Why had the dispute been going on with HMCR (aka the Tax Man) for so long - since 2000 when Vodafone purchased Mannesmann?

Because there is a conflict between UK law and EU law. And it takes that long to get such a case to resolve sduch a conflict through the various levels of the court system. It went to hte Special Commissioners (a tax court) where vodafone won. Then to hte High Court, where Vodafone won. Then to the Court of Appeal, where it was more like a score draw. That all just takes years and years.

3. Was the reduced amount of tax that Vodafone paid in any way connected to them hiring an ex HMCR official who had been in charge of tax on big business in 2007?

No.

But do remember, UKuncuts first claim was that Vodafone dodged £6 billion in tax. Which is so howlingly wrong that not even you are attempting to claim that now, are you?

KRodgers

Your last comments first; I am not a member of UK Uncut and I have never claimed any amount to be correct, also it was Private Eye who originally said "the tax figure from the takeover was likely to be £6bln", this was reached by an ex HMRC official and is said to be a reliable estimate of what Vodafone should have expected to pay.

Unfortunately you failed the simple quiz I placed before you, the correct answers are as follows:

1. Vodafone expected the tax bill to be in excess of £2bln and had set £2.2 aside for that purpose.

2. You are partially correct, however right up to the point where HMRC suddenly caved in and dropped the amount to £1.25bln Vodafone had been expecting to pay more. It is no coincidence that George Osborne was making a visit to India the day after this agreement was reached. Part of Osborne's brief was to take Vodafone's corner in their dispute with a tax problem with the Indian government.

3. Hard or impossible to prove, but it seems likely that the ex HMRC official had briefed them fully about how to better negotiate with HMRC, otherwise what would be the point in poaching him from HMRC in the first place!

Just to be clear, I am against tax avoidance by anyone as I have always paid my taxes. I am not just against the big names mentioned by UK Uncut, I am also against avoidance by the likes of Guardian Media Group; just to clear up the confusion of an earlier poster.

Mr Oulton

"3. Was the reduced amount of tax that Vodafone paid in any way connected to them hiring an ex HMCR official who had been in charge of tax on big business in 2007?

No."

Proof please.

"UKuncuts first claim was that Vodafone dodged £6 billion in tax. Which is so howlingly wrong that not even you are attempting to claim that now, are you?"

Again, proof please. It's no good to simply state it's "howlingly wrong" with no evidence to back it up. The £6bn figure was quoted in a series of reports in Private Eye, calculated by former HMRC officers. One of whom, who had worked on the very investigation, described the eventual £1.2bn as an "unbelievable cave-in".

The true fact is we will never know the precise figure but I am inclined to believe, given the facts, Vodafone ended up paying much less than they could have done.

Jonathan Burke

@Major Plonquer – Clearly it is you who fails to understand the basic legal precepts of UK tax law, since tax ‘evasion’ is, indeed, against the law and therefore ‘punishable’:

“HM Revenue & Customs is committed to targeting tax evasion. We know some people don’t pay their fair share of tax and that some businesses get undercut by others not paying tax”

So you are aware, then, ‘evasion’ in this context is understood to mean the deliberate non-payment of tax where there are no legal means of ‘avoiding’ tax through the use of loopholes.

Your ‘driving’ analogy makes little sense and your example of the pensioner buying the loaf of bread is entirely invalid on the basis that bread is VAT exempted – so there is no tax to avoid or evade.

Clearly, a more appropriate question would have been whether or not I would advocate a legal distinction in anti-avoidance legislation between corporate avoidance measures and tax relief on, say, pension contributions. The answer would be yes, on the basis that the former represents a net loss to the exchequer resulting in lower tax revenues for investment in public services, while the latter reduces the individual’s dependency on public services and welfare payments over the long term (representing a net saving to the exchequer).

Perhaps this is what you mean by ‘education, education, education’?

@ Mucker & Fergus Pickering

I agree, the 1997-2007 Labour governments were terrified of making the case for progressive taxation and failed to do so. As a ‘rank and file’ member of the Labour Party, I am one of many critics of this kind of ‘feather-bedding’, which has contributed to the largest tax gap in UK history.

@ Nick

I agree, tax evasion is reprehensible, especially when engaged in by people who purport to be opposed to it.

Steve Tierney

UKUnCut is just the latest name for the rabid left. They'll be called something else next week, but it'll be much the same people.

They should change their name to UKSpendSpendSpend. Makes as much sense.

Conservative Libertarian

>>I think we all remember what happened when the banks had fewer regulations imposed on them.<<

Economic Illiteracy alert!

Fatbloke on tour

NH

You have to love your brass neck on this, the IEA were the original right wing, dog boiling mentalists.

They always complain about tax but they never tell thbe other side of the question, that if the private sector is unhappy about the tax take they should not sell their goods and services to the public sector or public sector employees.

The answer is full transparency.
Companies should detail who they pay corporation taxes to, the jurisdictions and the amounts.

As for your tripe about capital being very mobile, what about consumption? If we don't buy there is no profits.

And it gets worse when you start to bring VAT and income tax into it.

Companies only pay employers NI.
Their employess pay tax, you only collect it.
Consumers pay VAT, again you only collect it.

A civilised society needs civilised business practices.

Tax evasion vs Tax avoidance is a moving boundary. If UK companies spent more time trying to improve their products and services rather than try to get one over the taxman and UK civil society they might get on better in the real world of international markets rather than the current situation where they are being monstered by foreign competition.

Fernando

You can’t argue that HMRC are push-overs when so many companies have or are in the process of relocating their head quarters to avoid the rigours of the UK tax system.

KRodgers: “I am against tax avoidance by anyone as I have always paid my taxes.” Does that mean you have and always will structure your affairs so as to pay the maximum amount of tax? Are you some kind of masochist? I don’t like the use of evasion and avoidance as if they were interchangeable. They are not. One is illegal; the other is prudent. We all manage our affairs to obtain the best lawful advantage. We have holiday properties which are owned and managed by my wife as her marginal tax rate is lower than mine. Is that avoidance? If a company has a product which can be structured in such a way as to avoid VAT and therefore be sold more cheaply to the customer is that avoidance? A loophole is just a gap in the law. If it was not intended, the government should make sure the law is correctly drafted. Are you saying that HMRC should ignore the law and act arbitrarily?

I’m sure you are correct that Vodaphone received some good advice from the ex-HMRC official. But again, what is wrong with that? I consult an ex-planning officer when trying to get planning consent for a new outbuilding. I expect him to know the procedures, the timetables and the issues likely to interest officials, which I do not. I receive advice on VAT from an ex-member of Customs and Excise for much the same reason. Are you trying to stop people selling their expertise? Are you implying that there was something underhand?

GDT

@ Fernando,
quite right.

Tim Worstall

"Again, proof please. It's no good to simply state it's "howlingly wrong" with no evidence to back it up. The £6bn figure was quoted in a series of reports in Private Eye, calculated by former HMRC officers. One of whom, who had worked on the very investigation, described the eventual £1.2bn as an "unbelievable cave-in". "

This is actually discussed in the report. Which is why I suggest you go read it.

Once you've done so delighted to reopen discussions.

Cynic

@ KRodgers "Just to be clear, I am against tax avoidance by anyone as I have always paid my taxes." I'm a pensioner, KR. I try to avoid as much tax as possible so I can eat and heat my house. To me it's plain commonsense not to pay more than I absolutely have to, even though I have always paid my taxes. In my view, I can decide much better than the government how to spend my own money. Or are you just plain ignorant of the difference between avoidance (which is perfectly legal) and evasion (which isn't)?

Salviati

UK Uncut has much more intellectual depth than this puff piece for offshore multinational corporate interests. The article merely repeats the lie that Vodafone was being made liable for UK tax on profits made by Mannesman (its German subsidiary). This is total bunk. They were using a common offshore trick of booking profits in Luxembourg (a tax haven) from a leveraged buyout; the aim being to avoid both German and UK tax.

Since the publication of Nicholas Shaxson's book, 'Treasure Islands', UK Uncut now has a manifesto. What amuses me most is that Spectator readers seem to think we are a bunch of naive unemployed anarchists. Long may you continue to underestimate us. The truth is that nearly all of us have jobs (sometimes well paid and highly responsible ones), many of us run our own small businesses and most of us are highly educated graduates - I have a PhD.

We know a lot more about tax avoidance (legal and illegal), global finance and the offshore system than corporate PR officers would like us to know, and a damn sight more than your average Spectator reader.

KRodgers

In reply to Fernando and Cynic,

Yes, I pay all my taxes and I am happy to do so. I don't try and avoid any taxes ever and there is a very simple reason for it; I believe that it's my duty as a citizen and resident of this country. I expect to be taxed on my income so as to help provide services that are used by all. If anyone wants to be part of our society then they should pay their fair share. Those of us that are more fortunate either by chance, ingenuity or hard work have a duty to repay the community that allows us to be a part of it.

The vast majority of people who avoid *or* evade tax are those that are greedy.

john

Warren Buffett
The rich are always going to say just give us more money and we'll just go out and spend more and it will trickle down to the rest of you...That has not worked for the last 10 years and I hope the American public has caught on...

john

Warren Buffett posted the above comment on his Facebook account on the 25th November 2010.

Geo

To Verity:

"Why does the left always use nursery school lettering? I think it would make an interesting PhD dissertation.

Obviously, they think the faux naif aspect will safeguard delicate people from feeling threatened by literacy."

Mmm, yes, akin to the Conservative Party tree logo, which looks like the crayon drawing of a preschooler.

bart

Deary me you right wing nutters make me sick, so ignorant and deluded