Friday 11 November 2011

Financial transparency bill will help tackle the tax dodgers

Caroline Lucas's Tax and Financial Transparency Bill is due for a second reading on 25 November – but it needs our support.Blog by Caroline Lucas on FALSE ECONOMY LINK

The public services we all benefit from are funded by the taxes we all pay. It’s pretty straightforward. But that means people and companies who fail to pay the full amount of tax that is expected of them are starving our public services of funds. If we want to fight spending cuts, we must tackle that failure to pay the right amount of tax.

Taken together, more than £100 billion is currently being lost because of abuse of loopholes in the tax system, tax bills remaining unpaid and from illegal non-payment of tax. That’s why, earlier this year, I tabled the Tax and Financial Transparency Bill in Parliament, which is due to have its second reading in the Commons on 25 November.

A report published earlier this year by Tax Research UK estimated that regulatory failures by HM Revenue & Customs and Companies House mean that around 500,000 companies a year fail to pay their tax or file their accounts.

My Bill would ensure that banks have to provide details on all accounts they maintain for companies operating in the UK, so that HM Revenue & Customs and Companies House can chase those companies who do not file the returns they're obliged to make for the missing information – and the tax they owe.

The Bill would also require banks, companies and trusts that operate in the UK to publish details of how much tax they pay in all the jurisdictions where they operate. That means requiring them to reveal what use they make of offshore tax havens. Full transparency will enable the tax authorities (and the public) to make sure that these companies are paying the right amount of tax, and make it easier to close loopholes and crack down on tax avoidance. Who could argue with that?

Well, just because it’s fair and it makes sense, doesn’t mean it won’t need a huge amount of campaigning momentum – and political will – to challenge the vested interests which do so well out of tax dodging. To help channel that momentum, I’ve set up an e-petition on the Government’s website, which echoes the demands in the Bill. Everyone who is opposed to cuts in public services, and who thinks the same rules should apply to everyone when it comes to paying tax, should sign it. If we can gather more than 100,000 signatures, it will be considered for debate in Parliament.

A successful e-petition can achieve a lot by helping to build pressure for change, so please do sign the petition and keep circulating the link. With a coordinated effort, we can reduce tax avoidance and reduce the terrible harm it does to our crucial public services.

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