38 Degrees Logo38 Degrees Logo 38 Degrees Logo

Posts Tagged ‘George Osborne’

Interview with Nicholas Shaxson: Part Two

March 18th, 2011 by

Nicholas Shaxson, tax expert and author of ‘Treasure Island: Tax Havens And The Men Who Stole The World’, a book described as the “most important of the year”, noticed 38 Degrees’ campaign against tax dodging. He asked if 38 Degrees would be interested in doing an interview with him. 38 Degrees members came up with the questions, this is the second all three instalments of his replies:

How does the UK relate to other countries in the world for tax dodging? if we are one of the “dodgiest” countries then is it relative to high corporation tax which other countries don’t have? (Ihmya Boydfriend)

Nicholas Shaxson: When we are talking about the UK, there are two things that are happening. The first is: the UK tax authorities are losing money as wealthy individuals and corporations stash their money in tax havens, evading or avoiding tax on their income. George Monbiot’s recent excellent article in The Guardian is about a shift that may be underway that would make matters worse.

George Osborne has the power to crack down on tax dodgers

Photograph by altogetherfool (Flickr)

The second is that the UK is a tax haven in its own right. And it is doing two main things. One the one hand, it’s creating all sorts of tax exemptions, offering secrecy and other attractions that suck money in from elsewhere, so that the residents of other countries can dodge taxes or whatever. On the other hand, and more importantly, it runs a network of tax havens around the world – this picture of the world’s tax havens, with the British ones in blue, gives an idea. About half the global offshore system is, in one way or another, British. These tax havens channel huge sums of money, and the business of handling that money, in to the City of London. It may be bank deposits in Jersey being sent up to HQ in London; it may be a crosss-border business deal being routed through UK havens and the business of setting it all up being outsourced to London; it may be a dictator’s assets being provided with a secrecy structure laddered through Gibraltar, Cyprus, Luxembourg, the Caymans or whatever – with the ultimate asset: the bank account, or the luxury house, or the painting – actually held in London.

So there’s money flowing in two directions. Money is being lost to tax havens elsewhere. Meanwhile, Britain’s tax haven network around the world is sucking money back in. But it’s crucial to understand – this is the key point – that the money coming back in does not make up for the money being lost. The money coming in is going to the City and it’s creating too-big-to-fail banks; a financial sector that has the government and taxpayers by the throat; property bubbles and real estate speculation. Are we really any better off than say the French, German, Swedes, as a result of these vast inflows? I’d say no – we have a far more unequal country, more very wealthy people, but more poor people too.It is in this sense that one can talk about Britain as the “dodgiest” country, I think. It’s not about our tax rates, really. It’s about our role running half the world’s tax havens.

I believe about 2 thirds of the worlds tax havens are British territories. Is this true? (Mike Dorey)

NS: As I mention above, the figure is about half. That’s the Tax Justice Network’s estimate. It’s not just them, though: Conservative MP Mark Field, one of the tax havens’ staunchest defenders, recently was quoted as having said:

“Half of the top 30 offshore financial centers are British dependencies or territories.”

One can quibble a bit with the share, but not much.

Can the government actually have any control over, for example, Jersey and any other “colonial” posessions that are operating tax havens? (Peter McCrone)

NS: Very good question. You have the three Crown Dependencies –Jersey, Guernsey and the Isle of Man – and then the 14 Overseas Territories – seven of which are tax havens: Anguilla, Bermuda, British Virgin Islands, the Cayman islands, Gibraltar, Turks and Caicos, and Montserrat. Wikipedia calls the latter “remnants of the British Empire that have not acquired independence or have voted to remain British territories.” These places are partly controlled by Britian – the Queen appoints the governor, for example – but also partly separate: each has its own limited form of local politics and elections. Britain’s role is understated and it doesn’t like having to show its power: it prefers this slight distance that allows it to say “there’s nothing we can do” when something ugly breaks the surface. Every now and then Britain’s hand behind the scenes is revealed – such as when governance in the Turks & Caicos got so crooked that Britain had to impose direct rule.

This British underpinning is absolutely crucial. When the Bahamas became fully independent from Britain under premier Lynden Pindling in 1973, the money fled in droves to the Cayman Islands. “It wasn’t that Pindling did anything to damage the banks,” noted offshore lawyer Milton Grundy. “It was just that he was black.” If the jurisdiction is under the queen, the financiers are reassured. Britain could transform the offshore system overnight, if it chose to.

I’d like to know if the British government really would like to deal with the loopholes? (Lisa Howarth)

NS: I think that the answer is, generally, only up to a point. The Monbiot article I cite above is an example of which way this is going – this really is an effort to give corporations what they want, and let the ordinary British taxpayer pay the taxes they won’t pay. It’s not just the current government either. Gordon Brown promised in 1997 to crack down on tax havens before he came to power, and then did very little indeed. This is ultimately about the City protecting its interests, which means protecting the tax havens, to attract the inflows. Also, as regards the outflows, my book in the last chapter outlines how the British tax authorities steadily changed their culture away from a process of really trying to get corporations to pay their way, into one where corporations became “clients” and it was important to keep them happy.

You can follow Nicholas Shaxson on twitter at: http://twitter.com/nickshaxson

Nicholas Shaxson also recomends Richard Murphy’s Blog
and this Tax Justice Blog

 

You can read part one of the interview here.

You can read part three here.

Posted in 38 Degrees Blog Posts

Tags: , , , , ,

Interview with Nicholas Shaxson: Part One

March 3rd, 2011 by

Nicholas Shaxson, tax expert and author of ‘Treasure Island’, a book described as the “most important of the year”, noticed 38 Degrees’ campaign against tax dodging. He asked if 38 Degrees would be interested in doing an interview with him.  The office team then asked 38 Degrees members wanted they wanted to know about tax-below he has answered some of the questions members have asked him:

Nicholas Shaxson

Photograph by 38 Degrees

Gerry Smith: Could you please explain the difference between tax avoidance and tax dodging? If the only difference is one is legal and one is illegal how do we pressurise our MP’s into changing the tax laws so both are illegal?

Nicholas Shaxson: Technically, the main distinction that is made is between tax evasion – which is by definition illegal – and tax avoidance, which is by definition legal, but also by definition involves getting around the spirit of the law: what our democratic representatives intend when they set up tax laws. Between the poles of evasion and avoidance there is a huge grey area, a spectrum between the legal and the illegal. Multinational corporations that use tax havens tend to inhabit this grey area.

Tax dodging is a popular term which to me means the whole lot: evasion, avoidance and the grey area in between. I prefer an alternative term, which is tax cheating.  I think that effectively puts the finger on exactly what is going on here.

Lauren Young: How much could we save if they just paid their tax?

NS: The so-called UK tax gap – taxes that are recognised but go unpaid, outright tax evasion, and tax avoidance – is estimated at 40 billion pounds per year by HMRC; and at 120 billion per year by Richard Murphy,who has done a lot of pioneering work on this. It would never be possible to collect all this, but many billions, and possibly tens of billions, is a reasonable estimate of what might be possible. This could not go all the way towards making up for the huge cuts now being instigated – but it could go a long way. It is a genuine and big alternative to cuts.

Avril Wooster: If someone resides in U K, has a business in UK, how can they not pay their due taxes in UK?
Robin Rowles: Is there any reason why our taxation laws can’t say “If you live in the UK, work in the UK, do business in the UK, or as an individual or as a corporate entity take any income from the UK, you pay UK taxation”?

NS: Generally, companies can’t cut their tax bills to zero, because the government puts in defences against offshore tax avoidance. Company lawyers put in place new schemes to get around those defences, though, and the government creates new defences against those. And so on. This game of cat and mouse is one reason why tax systems get so complex.

Take a business that is resident in the UK and which has its headquarters here, and which has subsidiaries all over the world. In theory, should pay taxes on all its worldwide income, with allowances made for taxes already paid to other countries. But it’s not as simple as that.

Imagine the company has a subsidiary in a tax haven, which earns $100 million but pays no local tax (because it’s in a tax haven.) In theory, the UK resident company should pay UK taxes on its tax haven profits. But there is a big fly in this ointment: if it structures its tax affairs in certain ways, it may only pay those taxes in practice once it has repatriated those profits back to the UK. Meanwhile the money that it keeps out there in the tax haven will sit there, untaxed. This is known as deferred tax – tax that should in theory be paid one day, once the income is repatriated to the UK – but in practice it often never gets paid at all. It has been called a ‘tax-free loan from the government, with no repayment date.’ One third of the UK’s largest companies pay no tax.

With respect to individuals, the big gift that the UK makes to wealthy people is the so-called “non-dom” rules, under which certain classes of people who are resident in the UK but not “domiciled” in the UK (this is a rather vague test that depends on where your heart lies) get to pay tax on their UK income only, but pay no tax on their worldwide income. So of course, vastly wealthy people come to London, make sure all their income is realised overseas, and get all the benefits from living in our country while making sure that other people pay for all the services they rely on. The non-dom rule should be simply scrapped.

You can follow Nicholas Shaxson on twitter at: http://twitter.com/nickshaxson

Nicholas Shaxson also recomends Richard Murphy’s Blog
and this Tax Justice Blog

Posted in 38 Degrees Blog Posts

Tags: , , , , ,

We’ve decided where our Artful Dodger tax ads should go next

February 28th, 2011 by

George Osborne as the Artful Dodger

Photograph by 38 Degrees

Last week we ran a poll to decide where our Artful Dodger tax ads go next. The most popular suggestion was to run them in national newspapers with over 12,000 of the 15,000 votes. The other two options with fewer votes were billboards and bus stops in cabinet members’ constituencies and local election hotspots.

Last time we ran our ads in the papers, we really upped the pressure on the government to tackle tax dodging. The ads were talked about in newspapers and on BBC and Sky breakfast TV. On Sky, our ads even put a minister on the spot when the presenter asked “why are you fiddling about with VAT when tax dodging costs us £120bn?”

What else could we do to up the pressure? If you have any ideas, please share them below:

Posted in 38 Degrees Blog Posts, Clampdown on Tax dodgers

Tags: , ,

Our letter to the Independent

January 11th, 2011 by

Here’s a letter David sent to The Independent newspaper last week. They wrote a great article about us recently, which you can read here.

David’s letter was to clarfiy that 38 Degrees is independent of any political party, because there was a sentence or two in the article that might have made that slightly unclear.  You can see the letter we sent in below.

Sir,

Your article ‘New media give popular protest a fresh voice’ (Tue 5thJan) about 38 Degrees  Artful Dodger adverts highlighting tax-dodging was a great boost to our members’ campaign. But there was one thing we’d like to clarify.

Your article said that “Tory advisers [...] could be forgiven for thinking that the advert was the latest attack from the Labour Party”. 38 Degrees is independent of all political parties. Our members support different political parties including, in some cases, none at all.

Many of our members were disappointed with last Labour government’s record on tax dodging too. The Artful Dodger adverts focused on George Osborne because as Chancellor he could something about tax dodging but, at the moment, he’s choosing the avoid the issue.

Yours faithfully, David Babbs, Executive Director, 38 Degrees

Posted in 38 Degrees Blog Posts

Tags: , , ,

Artful Dodger ads are causing a stir

January 6th, 2011 by

George Osborne has been splashed across the papers the past couple of days in his new starring role as the Artful Dodger. Together, we came up with the idea for a cheeky ad to get people talking about tax dodging and we’ve done just that. We’re exposing the scandal of tax dodging and making sure we all know the truth about how much we really lose each year to super-rich tax cheats. We always said we wanted to get everyone talking: politicians, journalists and members of the public.

George Osborne as the Artful Dodger

Photograph by 38 Degrees

The past few days have been really exciting: the phones in the 38 Degrees office haven’t stopped ringing. On Tuesday morning, you might have seen David on Sky News or BBC News talking about our ads. In fact our ads put a government minister right on the spot in a Sky News interview. Our advert was held up to challenge them directly with the presenter asking “why are you fiddling about with VAT when tax dodging costs us £120 billion?”

Together, we’ve pushed the issue of tax dodging up the agenda and the media and blog coverage over the past few days proves it. Here are some of the highlights:

Daily Mirror: “George Osborne branded the Artful Dodger”
http://www.mirror.co.uk/news/top-stories/2011/01/05/george-osborne-branded-the-artful-dodger-115875-22826906/

Independent: “New media give popular protest a fresh voice”
http://www.independent.co.uk/news/uk/politics/new-media-give-popular-protest-a-fresh-voice-2176107.html

Guardian Politics Live Blog: 12.12pm
http://www.guardian.co.uk/politics/blog/2011/jan/04/politics-live-blog

Irish Times: “Billboard campaign to target avoiders and evaders of tax”
http://www.irishtimes.com/newspaper/world/2011/0105/1224286779740.html

Media Week: “Newspapers spike ad targeting Osborne’s tax record”
http://www.mediaweek.co.uk/news/rss/1047846/Newspapers-spike-ad-targeting-Osbornes-tax-record/

Left Foot Forward: “Mail and Telegraph pull anti-tax-dodger ads”
http://www.leftfootforward.org/2011/01/mail-and-telegraph-pull-anti-tax-dodging-ads

If you spot any interesting blog posts or articles post them in the comments below so that we can all read them.

Posted in 38 Degrees Blog Posts

Tags: , , ,

Download & use the “Crack Down on Tax Dodgers” Ad

January 6th, 2011 by

Over the last few days lots of people have asked if they can download and use the “Crack down on Tax Dodgers” ad. That is of course absolutely fine!

If you want to download it and use it on your blog, facebook, twitter or something else just click here to download it then let us know how you use in the comments below.

Here’s how the ad looks:

George Osborne as the Artful Dodger Ad

Photograph by 38 Degrees

Posted in 38 Degrees Blog Posts

Tags: , , , , ,

Daily Mail Group & Telegraph pull our Tax Dodger Ads

January 4th, 2011 by

This morning our “George Osborne The Artful Dodger” tax dodger ad was meant to run in the Metro, Guardian, Indepdendent and the i.

It has become clear that the Daily Mail group of newspapers (which includes the Metro) pulled out of running our ads at the last minute – they were meant to appear in the Metro this morning but there was no sign of them. We’re trying to find out what their excuses are and will update this blog post with the latest developments.

The Telegraph also refused to run the ad.

You can view the ad here: on page 28 of the i, page 18 of the Independent and page 14 of the Guardian.

Update 1: Left Foot Forward have more details here

Update 2: Here’s the ad

George Osborne as the Artful Dodger Ad

Photograph by 38 Degrees

Update 3: If you want to complain about our ads being pulled you can email the editors at the papers that didn’t run the ads here: managingeditor@dailymail.co.uk (Daily Mail); telegraphenquiries@telegraph.co.uk (Daily Telegraph); news.london@ukmetro.co.uk (Metro)

Update 4: We’ve just heard from the Metro why they refused to print our ad. Here’s a copy of the email they sent:
“I gave it the OK before Christmas, but said it would have to be pulled if there was any controversy, and now Conservative HQ are on the attack over the ‘tax dodger’ claims.
“I don’t have a problem with the group advertising with us but obviously we don’t want to run anything that could be viewed as libellous.”
And here’s David’s response:
“It’s a bit implausible that they were genuinely worried about libel – we had been told that the adverts had been looked at and approved by their libel lawyers several days earlier, they’d been looked at and approved by 38 Degrees libel lawyers several days before that, and several other papers felt comfortable running them.”

Posted in 38 Degrees Blog Posts

Tags: , , , , ,

George Osborne: the dodgiest dodger of them all?

December 6th, 2010 by

Here’s a blast about tax dodging we sent out to our members today:

George Osborne

Photograph by altogetherfool (Flickr)

Dear friend,

George Osborne is a pretty convincing Artful Dodger! He’s certainly good at dodging the issue of tax cheats. 38 Degrees members have helped come up with an eye-catching advert to put our Chancellor on the spot, and face the question he’s been trying to avoid: why won’t he get tough on tax dodging?

VAT goes up on the 4th of January. That day, George Osborne will be doing the media rounds, claiming there’s no alternative to a VAT hike and cuts to our schools and hospitals. He’ll claim “we’re all in this together” – but the truth is that some of the richest currently pay far less tax than the rest of us.

We can break through his spin and change the debate with attention-grabbing ads on the same day. Instead of his carefully rehearsed spin, we’ll ensure that everywhere George Osborne goes he’ll be asked tough questions about tax dodging.

George Osborne keeps telling us that our national debt is all down to benefit cheats and bloated public services. But that’s not the whole story. Up to £120bn is lost to tax cheats every year. That’s 15 times more than benefit cheats cost us! It’s more than the entire NHS budget and over three times the amount we spend on schools. If money is so tight, why doesn’t George Osbourne want to tackle tax cheats?

George Osborne seems to think tax dodging is okay. He does it, as do senior Tories like Sir Philip Green and Lord Ashcroft. He made a secret deal with Vodafone to write off £6bn in tax. He stays silent whilst businesses like Kraft announce new plans to dodge tax. And now he wants to give massive tax breaks to corporate giants. He says ‘we’re all in this together’. But the reality is he is refusing to make the super-rich pay their fair share.

If we raise enough money to get these ads all over the papers, it will create a media stir and help expose ‘we’re all in this together’ as a hollow soundbite. We’ll put the issue of tax dodging where George Osborne can’t avoid it – in our national press on the day of the VAT tax hike.

We’ll need to raise £20,000 to get our ads in all the papers.

Thanks for getting involved,

David, Hannah, Johnny, Charlotte and the 38 Degrees team

PS. Since 38 Degrees members voted to launch a campaign on tax dodging, we’ve really started a debate! One writer in The Observer got so fired up that he wrote a whole comment piece about us, the most viewed article on the whole website! And only this week, ActionAid and The Guardian exposed the company behind Grolsch and Peroni beer as tax dodgers. We’re proving that when we work together we can force tax dodging up the agenda. Please donate now to put George Osborne on the spot on the day that VAT goes up: http://www.38degrees.org.uk/artful-dodger.

Posted in 38 Degrees Blog Posts

Tags: ,

Tax avoidance: George does it too?

October 28th, 2010 by

A few weeks ago 38 Degrees members voted in their thousands for us to work together to push the government to do more to crack down on tax dodgers.

But in the Comprehensive Spending Review, George Osborne failed to do this. He announced lots of cuts but no real new plans to deal with tax dodging. In fact, the cuts included cuts to tax inspectors who should be tackling tax dodging.

Meanwhile it has been revealed in a Channel 4 Dispatches documentary, also reported in the Daily Mail and The Telegraph, that three cabinet ministers including Osborne use loopholes to avoid paying tax. Many 38 Degrees members have asked: how we can trust our Chancellor to be doing all he can to close tax loopholes, when he’s profiting from the loopholes staying open?

Our campaign against tax dodging is likely to be a long one. We are going to have to keep the pressure on for some time to turn the tide on the government’s relaxed attitude to tax avoidance. Thousands of 38 Degrees Members emailed their MP to tell them that the Treasury should crackdown. Hundreds have suggested their ideas for our own tax cheats advert campaign spoofing the government’s own benefit cheats adverts. And our petition telling George Osborne it’s time he started paying his own tax is growing really fast.

Campaigning against tax dodging is not going to be an easy win, but we definitely can’t rely on the politicians to do it without us. People power is our best bet for winning this campaign.

Posted in 38 Degrees Blog Posts

Tags: , , , ,

Tax Cheats Petition is on George Osborne’s desk

October 19th, 2010 by

38 Degrees volunteers Eleanor and Rob visited the Treasury today and handed in the Crack Down On Tax Cheats petition.

Over 13,000 members signed the petition and now your signatures and comments are sitting on George Osborne’s desk. We’re calling on him to protect the resources of the men and women who are trying to catch the super-rich bankers and billionaires that cost us £42 billion in lost tax.

Thousands of 38 Degrees members discussed and voted on what we should do about the cuts. Together we chose to campaign on super-rich tax dodgers who have avoided paying billions.

Now, when Osborne is finishing making his final decisions about the Comprehensive Spending Review, he and his team will know about our campaign and that we won’t stand for him making life easier for rich tax dodgers.

Posted in 38 Degrees Blog Posts

Tags: , ,