It is estimated (Tax Research UK) that the value of tax avoidance by Britain's top companies is worth some GBP25 billion a year. This figure does not include tax avoided by rich individuals earning over GBP200 000 a year. A conservative estimate suggests that this is as much as GBP8 billion but does not include all the money these individuals hold offshore, which is impossible to quantify. Clawing back this money would have funded the GBP20bn fiscal stimulus package contained within the pre-budget report with billions left over.
The union is calling for a repatriation of the profits banks place offshore and have them subjected to UK tax; to close down structured finance operations and to end private banking advice sections designed to exploit tax loopholes.
Unite is demanding that the UK government close the loopholes that allow super-rich individuals and corporations avoid paying their fair share of tax. Working people are bailing out the banks and funding massive tax concessions for the super rich and Britain's top companies.
Unite joint general secretary, Derek Simpson, says:
"A commitment to make 2009 the year Labour gets tough on the tax havens would be met with delight by hardworking families.
For years super-rich individuals and corporations have undermined the UK's tax revenues and without decisive intervention from the government those same people would have destroyed our economy. Thanks to them our jobs and homes are at risk.
The taxes these corporations and super rich individuals avoid could go along way to boosting the UK economy during these tough times. The government must close the loopholes that allow the super-rich avoid paying their fair share of tax. It is also time for the banks to close down their private banking advice sections designed to exploit tax loopholes."
The union is calling on the government to force financial institutions to:
1) Close down their structured finance operations.
2) Repatriate their offshore profits and have them subjected to UK tax.
3) Close down their private banking advice sections designed to exploit tax loopholes.
According to Tax Research UK, the top 100 companies in Britain have on average reduced their tax payments on profits by 5% over the last five years. It is now believed that the effective tax rate of the top 50 companies is as low as 22% and this has all been done legally. Tax is avoided by way of tax relief, allowances and the absence of restrictions on the movement of capital to tax havens.
