Taxation neeedn't be taxing. But it is.
I've decided to move the accountancy practice offshore.
Nicolson Accountancy EU Sarl will be based in Luxembourg, and the Stornoway office will become an 'order fulfilment centre'.
I will employ literally a brace of people in Luxembourg, one to answer the phone and one to spend all day taking money to the banks, and as there is no tax to pay in the UK, I can cut prices by over 20%, driving the competition into the wall.
I'll then fill this gap, by getting a Scottish Government grant to expand the premises and bring employment to an unemployment blackspot; that I have helped create.
Alternatively, I'll mortgage everything I have. Lend it all to a British Virgin Islands company, who lends it back to the UK company at double the interest rate I pay. I'll get a tax deduction on all this interest on money I borrowed but don't actually need, whilst the BVI company will earn it all tax-free and pay of my mortgages and give me a very nice lifestyle.
Any spare cash will be lent back unnecessarily to the UK company in a tax-deductible/tax-free circle that continues until UK Corporation Tax becomes zero. At this point, I'll trumpet my multi-million pound investment in Scotland, and be invited for tea at Bute House (which will appear on the official record).
The former, is of course, the Amazon style; and I didn't appreciate the full extent of their tax manipulation until this week, thinking that my spend was recycling in the UK. It's not.
According to the Guardian, there are 2,265 employed by Amazon in the UK, and 164 in Luxembourg covering the entire EU. But the UK seems bizarrely unprofitable, generating a mere £3m in taxable profits compared to an expected £100m.
The second is the News International structure, with debt used to move profits around. It is surprisingly easy to do this, and has recently been enshrined in law as completely permissible - for large companies multi-nationals only.
So the correct and fair question that needs ananswer is: What will be the tax position of these two examples in an Independent Scotland?
Are we to become a "tax haven" as Francis Maude was rightly pilloried for aspiring to, or will we follow the Scandanavian model and insist on profits earned being tax here?
The SNP cannot remain silent on this, or try and deflect to the current taxation policies in the UK, for the very simple reason that we are supposed to be looking forward to a bright new future, not building a future based on past mistakes.
Political parties have to issue manifestos that address the real issues, or they will find themselves flailing about, in the same way that MacNeil did with a Shetland opt-out from Independence.
This is the biggest decision in many generations, and no-one seems prepared to try to come up with answers to some of the key questions and that, I am afraid, is just not good enough. If 50 years of waiting, and 5 years in power are not long enough to find coherent answers then there is something far wrong.
Are the politicians too emotionally in hock to the multi-nationals to ever consider the impact on the wider economy of a grant-shopping, grant-hopping, local-economy destroying giant?
Are we to become a nation of over-taxed individuals, flipping burgers and packing books to pay the taxes for the social services, whilst the multi-nationals take the profits tax-free to Luxembourg and the Caribbean?
Or is the country going to take it's share of taxable income from the multi-nationals and build schools, Universities, roads and a sense of a viable future?
The absence of any kind of answer is - sadly - very telling, and will result in an eroded Scottish tax base, as the moderately wealthy emigrate in search of a better balance between taxation and standard of life; and the wealthiest emulate the multi-nationals.
Nicolson Accountancy EU Sarl will be based in Luxembourg, and the Stornoway office will become an 'order fulfilment centre'.
I will employ literally a brace of people in Luxembourg, one to answer the phone and one to spend all day taking money to the banks, and as there is no tax to pay in the UK, I can cut prices by over 20%, driving the competition into the wall.
I'll then fill this gap, by getting a Scottish Government grant to expand the premises and bring employment to an unemployment blackspot; that I have helped create.
Alternatively, I'll mortgage everything I have. Lend it all to a British Virgin Islands company, who lends it back to the UK company at double the interest rate I pay. I'll get a tax deduction on all this interest on money I borrowed but don't actually need, whilst the BVI company will earn it all tax-free and pay of my mortgages and give me a very nice lifestyle.
Any spare cash will be lent back unnecessarily to the UK company in a tax-deductible/tax-free circle that continues until UK Corporation Tax becomes zero. At this point, I'll trumpet my multi-million pound investment in Scotland, and be invited for tea at Bute House (which will appear on the official record).
The former, is of course, the Amazon style; and I didn't appreciate the full extent of their tax manipulation until this week, thinking that my spend was recycling in the UK. It's not.
According to the Guardian, there are 2,265 employed by Amazon in the UK, and 164 in Luxembourg covering the entire EU. But the UK seems bizarrely unprofitable, generating a mere £3m in taxable profits compared to an expected £100m.
The second is the News International structure, with debt used to move profits around. It is surprisingly easy to do this, and has recently been enshrined in law as completely permissible - for large companies multi-nationals only.
So the correct and fair question that needs ananswer is: What will be the tax position of these two examples in an Independent Scotland?
Are we to become a "tax haven" as Francis Maude was rightly pilloried for aspiring to, or will we follow the Scandanavian model and insist on profits earned being tax here?
The SNP cannot remain silent on this, or try and deflect to the current taxation policies in the UK, for the very simple reason that we are supposed to be looking forward to a bright new future, not building a future based on past mistakes.
Political parties have to issue manifestos that address the real issues, or they will find themselves flailing about, in the same way that MacNeil did with a Shetland opt-out from Independence.
This is the biggest decision in many generations, and no-one seems prepared to try to come up with answers to some of the key questions and that, I am afraid, is just not good enough. If 50 years of waiting, and 5 years in power are not long enough to find coherent answers then there is something far wrong.
Are the politicians too emotionally in hock to the multi-nationals to ever consider the impact on the wider economy of a grant-shopping, grant-hopping, local-economy destroying giant?
Are we to become a nation of over-taxed individuals, flipping burgers and packing books to pay the taxes for the social services, whilst the multi-nationals take the profits tax-free to Luxembourg and the Caribbean?
Or is the country going to take it's share of taxable income from the multi-nationals and build schools, Universities, roads and a sense of a viable future?
The absence of any kind of answer is - sadly - very telling, and will result in an eroded Scottish tax base, as the moderately wealthy emigrate in search of a better balance between taxation and standard of life; and the wealthiest emulate the multi-nationals.
13 comments:
hmm, interesting.
Closing down tax evasion would certainly be the right thing to do in a time with 3 million unemployed, cuts to essential public services, millions of others in precarious employment, massive national debt.
Taking the model to its full extent, the distribution of all capital investment will ultimately be through ERDF funding which, without the necessity for a council anymore, locally elected Eurocouncillors can spend the grant on anything. The grant will literally be a cash handout as normal which does not have any strings attached such as ROI or any other output measures. why change a culture? This should keep regions in economic balance which is easy to control where there will be no "boom and bust" . The money can then be returned to the Europot after buying more stuff online from Amazon. At least its delivered to your door the next day so lets not forget they do provide a fantastic service which many companies should try to match.
Another chip on the shoulder charge at the SNP! If you believe this is wrong why are you saying the SNP should come clean? Why not the Tories and LibDems who are actually in a position to change things now? You have become a right Cupid stunt.
Anon 3:38. One of the poorest examples of the SNP cyberNazis in action. No answers so they resort to personal abuse.
Actually I'd like to see multi-nationals paying their fair share of taxation, which means at least the same tax rate as individuals.
If we start giving away huge tax cuts, then how do we fund the Public services?
10:38am
Attacks without answers really prove that you don't have any.
This is a well thought out posting which asks how an Independent Scottish Government will deal with tax evasion and maximisation of tax revenues for the betterment of Scotland.
In the big new world you won't have the Lib Dems, Tories or Labour to blame so you had better come up with some tangible sensible answers real soon.
p.s. swearing is the language of the uneducated.
2.38 and 11.21 (if they are different people) are the typical anti SNP cyber attack mutts. They both have a go at 10.38 (I think) and immediately make accusations of a fascist nature, of swearing and of not having any answers. 10.38, meanwhile, has proffered the possibility that, as the corporation tax is controlled in London, then the parties in charge down there have reponsibility for changing the rules (Labour cannot hide either - they had 13 years in which to do something). And, as none of these parties has expressed an interest in giving Scotland its independence then they should be asked how these loopholes should be dealt with NOW and not how the SNP think a future government in and independent Scotland might deal with it in the future. There are many parties that support independence should they not be asked the same question? Why not ask the question in its other form of all the supporters of the status quo? Because attacking the SNP is the only goal of this blog (whether that is Angus scratching that chip on his shoulder or merely having fun with you Labourites) and that makes it a poor place for debate.
Angus,
This was actually an interesting read and then I cringed when you couldn't help but make it an anti snp rant.
Shame.
Re - 10.38
Isn't it amazing how every single measured criticism of the SNP is treated as 'a chip on the shoulder charge'? It is also deeply worrying ...
Especially when it coincides with questions about what will happen to that party after independence. Will Scotland go the way of that disastrous example of the arc of prosperity, the Republic of Ireland and have our party system based solely on attitudes to and for independence? Or will it emerge as a genuine multi-party state espousing different attitudes across the political spectrum?
At present, this isn't even being discussed - but before we step into that wide blue younder, it certainly needs to be - NOW!
10:38 poor response from the Duty SNP Counter-blogger
I am becoming more and more worried about this seperatist attitude of all discent is not to be tolerated or labled as anti Scottish etc.
I voted SNP before but no longer trust them. Not long before they betray the voters who trusted them to keep the wind factories away by the look of it too.
SNP duty blogger here.
Sorry I'm late - had Easter off!
2.38, 11.21, 9.08, 9.44, 10.24
Poor response from the Labour Duty blogger
Are we seriously discussing the possibility of a future government in Scotland possibly having control of Corporation Tax and what it may do about unfait loopholes and NOT asking the government that CURRENTLY controls the tax what it intends to do?
Anything for a dig at the SNP! Are you people so blind that you cannot see that every single nonsense story you put out there AND THEN continue to support only weakens you?!? Remember David Cameron's anti SNP/Indendence stuff in January? Remember hundreds of new SNP members every week? Please keep up the good work!
3:20
With that anger I believe you are an off duty SNP Duty Blogger
lack of activity on this blog
no full moon
any correlation?
Re - 3.20
Clearly you've had a lot longer than Easter off.
If you could read, you might have noticed that Angus asked the question of the present Government first of all, even mentioning Francis Maude.
It was only after this that he asked the SNP questions of their policy and what might happen if or when independence was achieved.
Surely, anyone with an IQ level above the average SNP blogger would see that this was quite a legitimate and fair question to be asked.
But no... That lot think it's unfair that they should be held to account in the same way as any normal political party is. Instead, the bloggers come out in force. Freedom of thought is muzzled and silenced. Paranioa rules ok.
Sad - and extremely worrying!
Post a Comment