Is David Cameron misleading the public? He courts public opinion by promising to close loopholes that allow tax avoiding multi-nationals to funnel their profits to tax havens to avoid paying UK tax.
His empty promise to push them to “damn well pay” was exposed this week when the Government lobbied to protect tax havens that have been used by companies like Google.
Over the last 10 years, Google made estimated profits of £7.2 billion in this country.
Under the deal agreed between Google and HMRC, the company will pay £130 million in back taxes.
George Osborne hailed the deal as a “major success”.
The chancellor may view the company paying a three per cent tax rate as a good deal, but few taxpayers will agree. Google uses Bermuda as a tax haven.
The Conservative Government claims to want to prevent tax avoidance. Yet it does not support measures by the European Union to close the door on tax havens. Instead, our Government secretly lobbies the EU to remove Bermuda from the official tax haven black list.
Treasury ministers told the European Commission they are strongly opposed to sanctions against Bermuda.
An internal memo circulated to Conservative MEPs in Brussels allegedly describes measures against tax havens as “unhelpful”.
This appears to be another case of the Government saying one thing in public, while privately doing the opposite.
John Hayes, writing in this publication, spoke about the importance of tax revenues from companies which help to provide the public services on which we all depend. I couldn’t agree more.
It is important that all companies be required by Government to pay their fair share of taxes.
The Conservatives have been in power for six years, which is more than enough time for them to have taken strong action to deal with tax avoidance by multi-nationals like Google.
The time has come to stop blaming the previous administration and to take action.
Sweetener deals like the recent agreement with Google will not pass muster.
Ordinary tax payers, together with small and medium-sized businesses, pay their fair share, so why should the Government continue to let the multi-nationals off the hook?
Last month, Lincolnshire County Council sent a questionnaire asking us which services should be axed because of the huge cuts it faces in central government funding.
If large multi-national corporations were not allowed to avoid tax through schemes that create subsidiary companies which use dubious accounting practices to hide profits and channel money to tax havens, these brutal cuts would not be required.
Public services rely on individuals and companies paying their fair share of tax.
Mr Hayes has an opportunity to show his constituents that he takes a stand against tax avoidance by speaking out against the measures taken by his government to get Bermuda and other British territories removed from the EU blacklist of tax havens.
Joint European Union action is the best way to stop tax avoidance, so why is the Government trying to block it?