Thursday, 27 November 2014

Crazy Idea 14 - Audit every company!

When I first began looking at the Government budgets last year I was shocked at how little Corporation Tax the Government receives. Look at this breakdown of estimated Revenue from the Government’s 2013/14 budget:

The vast majority of income will be from your salary and mine. Income Tax and National Insurance bringing in 43%. I’m unsure how much VAT is generated by citizens but even if we guess at a quarter, that brings our share of revenue to over 51%. Then of course, don’t forgot to add in Council Tax...

Contrast this with the spending forecast from the same budget year:

Would you agree with me that Social Protection and Health are justifiably two of the biggest costs? Together accounting for half of all government spending. It seems reasonable to me that we the people put in fifty percent and take out fifty percent.

Of course at £357 Billion, the half we get back is far bigger than the £306 Billion we actually pay the government through our income tax and national insurance and VAT...

We have many profitable companies in the UK, so, why is it that we only get £39 billion in corporation tax?

Back in 2012 The Independent published this article: Britain's missing billions: counting the true cost of corporate tax avoidance. Their leading paragraph: "Yesterday's public finance figures were a tale of two countries: the public paid more and corporations paid less." (CI014A)

That was 2012, has the situation improved? According to International Business Times: "In the year to April 2013 – the latest available data – the so-called "tax gap" (the difference in the amount of revenue HMRC should collect in tax and the amount it actually does) rose by £1bn to £34bn." (CI014B)

With the revelations over the last few years of how much turnover some large corporations generate compared to paying little or no corporation tax, it is past time that all companies were audited, starting with those that generate the most revenue and pay the least tax. (CI014C)

Any company that posts a loss or fails to make a profit should be fully audited.

But why stop there? The fact is that several major companies have only started paying tax over the last couple of years as a result of public scrutiny, prompted in part by petitions raised by campaigning organizations. Check out these petitions:

Sum Of Us: HMRC: Stop making secret tax deals with the super rich (CI014D)

Sum Of Us: Tell Caffe Nero: pay your taxes! (CI014E)

When Starbucks go from paying no UK corporation tax to paying ten million, one has to ask whether even that ten million is covering up some clever accounting practice that allows the company to pay less tax in the UK than a more honest company would pay. (CI014F)

Would it really be a crazy idea to audit every company?

No company should be allowed to get away without paying their fair share of tax!

Do post your own crazy ideas or feedback on mine in the comments below and sign up to my mailing list below to be notified of future posts.

Why should my crazy ideas have any relevance to the economy? I'm the author of The Great Scottish Land Grab, a novel that imagines a fairer future for Scotland where the poor are empowered to change their destiny. I'm director of my own limited company: Goal 31 Ltd and I've over seven years experience working for government and financial organisations. Also, just like you, I'm a taxpayer and for some crazy reason I think that entitles us to have an opinion and for that opinion to be acted on by the government.

As I wrote at the start, I am making my 100 crazy ideas freely available. It seems unjust to propose ideas to fix the economy and then prevent people from freely reading those ideas. 100 Crazy Ideas to Fix the Economy will be published once the craziness is complete.

I can be found on Twitter: @my100goals or on Facebook: There's a short bio here.

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(CI014A; The Independent;

(CI014B; International Business Times;
(CI014C; The Guardian;

(CI014D; Sum Of Us;

(CI014E; Sum Of Us;

(CI014F; The Guardian;

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