Financial transparency bill will help tackle the tax dodgers

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.

JOIN THE FIGHT FOR A FAIRER TAX SYSTEM

A message from Caroline Lucas MP

Everyone understands the relationship between public spending and tax. The taxes we all pay are spent on the public services we all benefit from. But do enough people understand the relationship between public spending cuts and tax avoidance, tax evasion and unpaid tax?

It's pretty straightforward. People and companies that 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.

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. The main aim of the Bill is to 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 that do so well out of tax dodging. To help channel that momentum, I've set up an e-petition on the Government's website  that echoes the demands in the Bill.

Everyone who's 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. It's another way to push tax justice up the agenda in Parliament - e-petitions that gather more than 100,000 signatures have to be considered for debate in the Commons.

A recent example was the e-petition to release documents relating to the Hillsborough disaster, which successfully secured a debate, and prompted the Government to agree to petitioners' demands.

Even with enough signatures, e-petitions are not binding for the Government, but as Hillsborough shows, they can achieve a lot by helping to build pressure for change. 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 vital public services.

Caroline Lucas MP

SIGN THE PETITION HERE 

Lucas Bill Tackles Company Tax Scandal

A new Tax and Financial Transparency Bill, which could help the UK recover billions of pounds of lost tax by forcing companies to be more transparent in their accounting, is on the agenda for debate in Parliament on Friday 10 June.

The Bill, launched by the MP for Brighton Pavilion and Green Party leader Caroline Lucas in March this year, is due for its second reading in the House of Commons - and will also feature on BBC Radio 4's Decision Time programme tonight (8pm)

The Brighton Pavilion MP launched her campaign after posing a number of Parliamentary Questions to the Chancellor, in which she exposed the fact that H M Revenue & Customs is failing to prevent serious tax evasion which could amount to as much as £16 billion in lost tax.

Mark Serwotka, General Secretary of the Public and Commercial Services Union (PCS), said:

This bill goes right to the heart of the economic issues facing our country. If the Government was serious about protecting the most vulnerable people in our communities from the cuts, it would start investing in tax collection and proper regulation so that companies are not allowed to simply disappear without paying the taxes they owe.

 A report published by Tax Research UK  in March revealed that around 500,000 companies "disappeared" from the UK's Register of Companies in the year to March 2010 - with billions being lost to the Exchequer as a result.

Caroline Lucas MP believes that urgent measures are needed to stop companies that are formally dissolved from trading fraudulently, thereby undermining honest businesses who do pay their taxes.She is also calling for a requirement on multinational companies to publish information on where they make their sales, record their profits and pay their taxes, in order to ensure that corporations make a fair and proper contribution to society.

Caroline said:

The first aim of this Bill is to tackle the scandalous reality that around 500,000 companies every year appear not to be paying tax in the UK. Tax Research UK estimate that regulatory failures by H M Revenue & Customs and Companies House mean that around 500,000 companies a year fail to pay their tax or file their accounts.

A great many are simply struck off the Register of Companies as a result, never to be heard of again. It is thought that up to £16 billion of tax a year might be lost to the country as a result. This Bill would ensure that banks have to provide details on all accounts they maintain for companies operating in the UK so that H M 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.

Secondly, the bill would force companies to 'publish what tax they pay', requiring all companies filing accounts in the UK to include a statement on the turnover, pre-tax profit, tax charge and actual tax paid for each country in which they operate, without exception.

If they only trade in the UK, this has no impact on them. This information would, however, mean that the answers to the questions asked of Barclays Bank earlier this year about where it earned its profits, how much profit was recorded in tax havens, and where it paid its taxes could be answered for all companies trading internationally.

The Brighton Pavilion MP added:

This information is vital if we are to ensure that multinational corporations make a fair and proper contribution to our society. Companies cannot opt out of corporate social responsibility - and paying tax to the country that provides them with their opportunities to trade is an essential part of it. You can't be socially responsible and accountable unless you say where you are and what you do in each place that you trade.

Caroline's Tax and Financial Transparency Bill will feature as the main topic of discussion in BBC Radio 4's Decision Time programme tonight (8 June 2011) at 8pm with Nick Robinson. Caroline will be joined in the debate by former Trade Minister Lord Digby Jones, Sir Nicholas Montague, former head of the Inland Revenue, Michael Jacobs, a former special adviser in the Treasury and Number 10, and Fraser Nelson, editor of the Spectator. The programme will be available to listen again here: http://www.bbc.co.uk/programmes/b011pkqn