Tax authorities accused of siding with corporations over public

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HMRC has been accused of siding with corporations rather than individuals by a parliamentary select committee. The influential Public Accounts Committee (PAC) issued a damning verdict on the skewed priorities of Britain’s tax authorities, accusing them of indulging the tax avoidance of major corporations and the super rich at the expense of individuals and small business.

The recent slew of tax avoidance scandals has raised major questions about HMRC’s relationship with big business. With the likes of Starbucks, Amazon and Google systematically avoiding tax through an abstruse smokescreen of loopholes and extraordinary ‘negotiated settlements’ that see billions written off over lunch with Vodafone, it seems that yet again, the average citizen is losing out.

The PAC accused officials of ‘holding back’ from using legal methods and their full powers to pursue corporations and wealthy individuals, perhaps subscribing to the Boris Johnson school of adulation or indeed dazzled by their hospitality. Margaret Hodge, the committee chairwoman said

“HMRC holds back from using the full range of sanctions at its disposal,” said Ms Hodge. “It pursues tax owed by the smaller businesses but seems to lose its nerve when it comes to mounting prosecutions against multinational corporations.”

Inequality is an ugly thing – whether it be astronomical wealth gaps or the selective application of rules. If Joe Bloggs miscalculated his tax liability, the head of HMRC is unlikely to take him out to lunch, tell him not to bother with half of it and offer him a flexible payment timeframe. So why should corporations enjoy such ‘understanding’? If one wishes to continue flogging the ‘we have to create a friendly business environment or these firms will migrate’ argument that is so regularly wheeled out to defend the indefensible, then legislate for it with a mandate. What seems so obscene is that even with a ‘business friendly’ tax model, HMRC seems incapable of enforcing even the light touch regulations that do exist.

And all of this on the day that Iain Duncan Smith walked out of a Parliamentary debate on food banks. The debate had been triggered by a 150,000 strong petition but the minister clearly felt the proceedings unworthy of his time. Even the speaker John Bercow – a former Conservative said that the view that it was a disgrace there was no minister there “may be widely shared”. The guffaws from the Conservative benches did nothing to convey the impression that ‘we were all in this together’.

Does anyone else remember Iain Duncan Smith’s relentless pilgrimages to underprivileged areas before the Tories took office. His photo op Road to Damascus moments about poverty. It leaves almost as sour a taste as our tax system.

Written by Cyrus Bozorgmehr - Google+ Profile - More articles by Cyrus Bozorgmehr

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