HMRC hasn't prosecuted a single company for enabling tax evasion in six years, a new investigation found this week.
The tax authority was given criminal enforcement powers in 2017 to prosecute companies that help people to evade tax. At the time, then prime minister David Cameron said that these new powers would “send a clear message to the corrupt that there is no home for them here”. Yet they have never been used. This casts serious doubts over whether HMRC is preventing and deterring corporate tax avoidance. So what has led to HMRC being so toothless? Outgunned and outmaneuvered As I told The Observer, HMRC is routinely outgunned by the private sector. They simply don’t have the resources to prosecute rich and powerful corporate players. Criminal prosecutions, especially against big corporate legal teams, take time and money. Yet HMRC is chronically underfunded and understaffed. As we reported last year, a Parliamentary committee slammed the government for underfunding HMRC. They estimated that £42 billion could be missing in unpaid tax. And that for every £1 invested in HMRC investigations, £18 was recovered in additional tax. The government should give HRMC the resources it needs to pursue tax evaders. The new revelations, based on research by the Bureau of Investigative Journalism and TaxWatch, will only increase pressure on them to do so.
Photo by Evangeline Shaw on Unsplash
This week some of the world’s wealthiest and most influential decision-makers are meeting in the Swiss Alps resort of Davos. This is for the annual World Economic Forum meeting, an exclusive Glastonbury festival for the rich and powerful. Over 100 billionaires are registered to attend the event, alongside more than 2,500 other attendees, including heads of states, senior politicians and business leaders. The Chancellor Jeremy Hunt, and his opposite number, Shadow Chancellor Rachael Reeves will be in attendance. Given Hunt and Reeves’ trip to Davos, our friends at the JustMoney Movement are asking people to sign on to their open letter to them, calling for fairer taxes to tackle inequality. You can sign the open letter here. Stark inequality The Davos meeting brings into sharp focus the astronomic inequality of wealth in the world. This week Oxfam released a report that shows the five richest men have doubled their fortunes in the last 4 years, while almost 5 billion people are getting poorer. With such eye-watering collective wealth on show in Davos, it shines a light on just how much money could be raised for public spending if progressive taxes on wealth were introduced. Our Head of Advocacy and Policy, Rachael, spoke with Carole Walker on TimesRadio earlier this week. Check out the clip from the interview, and share it here.
Taking a stand
We’re not the only ones making the case for fairer taxes. Our friends at Patriotic Millionaires UK are putting their collective influence to work to make the case for higher taxes on wealth. In fact, they’ve organised a letter signed by more than 260 millionaires and billionaires imploring politicians to be brave and implement a tax on extreme wealth. A poll of high net-worth individuals in G20 countries found that nearly three quarters of millionaires support higher taxes on wealth. Actor Brian Cox, the star of TV show Succession, is supporting the letter and said: “We are living in a second Gilded Age, billionaires are wielding their extreme wealth to accumulate political power and influence, simultaneously undermining democracy and the global economy. It’s long past time to act.” While extreme wealth is on display in Davos, we are pushing ahead with our plans for the year to keep banging the drum for fair taxes to invest in Britain.
Happy New Year from the team at Tax Justice UK
Despite inflation figures falling, food prices are still far too high, bills remain unaffordable for millions, and waiting lists for crucial services are soaring. With public services in a downward spiral, and multiple crises affecting the lives of people in every corner of the country, this can’t continue. Things need to change. Election looming The prime minister has strongly suggested there will be an election in the second half of the year. Britain will be joining over 50 countries, representing more than 40% of the global population, heading to the polls. 2024 is being dubbed the year of democracy. This presents us with an opportunity to make the case for a progressive tax system that works for all of us, rather than a handful of the richest. It’s an opportunity to put pressure on the parties vying for power to prioritise fair taxes that would raise funds to sort out the state of the country. Far too many ultra-rich individuals and wealthy corporations get away without paying their fair share of tax. A fair tax system For too long tax has been described as negative, or something to be avoided. Sometimes seen as a penalty for hard work, or a bug-bear to raise with family and friends. But what if we turn it on its head? Our job at Tax Justice UK is to make the case for tax as a force for good. A tool that can turn around the fortunes of this country. A way to raise revenue to end the era of foodbanks and decimated public services. Tens of billions can be generated that can be ploughed back into Britain to benefit each and every one of us. Whether funds are used to train new doctors and nurses or teachers, invest in the sustainable economy, or revitalise our towns and cities, fairer taxes can build Britain back up. Increasing taxes on wealth and closing unfair tax loopholes are key to making the tax system fairer. With 2024 being a year that could see great change, we need to bang the drum even louder for fair taxes. We will make our voices heard in the run up to the election that fairer taxes will be essential to lift Britain up. We will keep getting on the news, and into newsrooms to make the case for wealth taxes and closing unfair loopholes. Our message will be heard in Westminster as part of our plan to influence politicians, and we’re going to push back against attempts to scale back or abolish taxes that raise vital revenue from the wealthiest. Together we can continue building an unstoppable force for fair tax this year, and every year after. |
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