UK government builds Vodafone Bypass with tax money

The government is building a new piece of road for the super rich
in London, so that they don't have to set foot on democratic
soil as they travel from Knightsbridge (the Royal borough) to
their offices in the City of London (owned by the Corporation).

Unfortunately, the UK government is using our money to do so
because the Vodafone Bypass is also the unwritten rule
whereby Vodafone and other grandees get to offshore their
money before paying any tax.

checkit:
VODAFONE BYPASS


Lib dems

Why is the UK government encouraging companies to use tax havens?

By Adrian Sanders MP
31st August 2012 - 2:46 pm

Plans by the government to change Controlled Foreign Companies (CFC) rules are threatening to deny the developing world billions of pounds in tax revenues. The current CFC rules discourage UK companies from using tax havens, by requiring them to pay UK levels of corporation tax whether they are based in the UK or abroad. This system discourages the practice of profit shifting and protects the tax incomes of both the UK and developing countries.

The changes were proposed in the Budget earlier this year and will mean that companies will only be charged full corporation tax when using tax havens if UK tax revenues are threatened. In spite of calls by the IMF, UN and World Bank for the government to look into how this will affect countries in the developing world, the government have refused. The Treasury argue that

“It is not sustainable for developing countries to protect their revenue using our tax rules, a much better way is to build their capacity and capability to collect the tax that they are due.”

To an extent this statement is true, building up the ability of developing countries to collect their own tax is the way forward. But the government’s new CFC rules will reduce the income of many countries. Considering the fact that tax revenues are a much more sustainable income for countries than aid it would be sensible to build up the capacity of these countries to collect their own tax revenues before thinking about changing the CFC rules. According to ActionAid, African governments receive more than ten times more income from tax revenues than from aid. However, this will inevitably fall once the new rules come into force, with the developing world losing out on up to £4billion.