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Tax avoidance distorts the market Tax avoidance distorts the market
(4 months later)
The elaborate and artificial structures used by Starbucks and other multinational groups do not only save them tax (You do evil, MPs tell Google, 17 May) – they also give them a built-in competitive advantage, because the same dodges are not available to domestic competitors in the markets in which they make their money (such as the UK). So why not hit them using not tax law but the Competition Act? The companies in such groups are ostensibly trading at arm's length – otherwise HMRC would disallow the charges which divert profits to the chosen tax-shelter. But there are also clearly concerted practices which have the effect of distorting competition. Should not the Office of Fair Trading be taking action using the remedies available to it to nullify this unfair benefit?
Tony Ridge
York		The elaborate and artificial structures used by Starbucks and other multinational groups do not only save them tax (You do evil, MPs tell Google, 17 May) – they also give them a built-in competitive advantage, because the same dodges are not available to domestic competitors in the markets in which they make their money (such as the UK). So why not hit them using not tax law but the Competition Act? The companies in such groups are ostensibly trading at arm's length – otherwise HMRC would disallow the charges which divert profits to the chosen tax-shelter. But there are also clearly concerted practices which have the effect of distorting competition. Should not the Office of Fair Trading be taking action using the remedies available to it to nullify this unfair benefit?
Tony Ridge
York
• Presumably the FTSE 100 groups who do not use their tax-haven subsidiaries for avoidance or evasion will, as public companies, publish the fine details of the transactions. (Top firms condemned for prolific use of tax havens, 13 May). To legally reduce UK or OECD taxable profits, the deductions must be (1) commercial terms; (2) arm's-length; (3) commercially necessary (4) not tax-dodges – otherwise HMRC can retrospectively deny decades of claims. I estimate that of the global $21tn of tax-evasion-capital-flight, more than $2tn (five million jobs for 10 years) has been illicitly siphoned from the UK. HMRC must repatriate it.
Noel Hodson
Oxford		• Presumably the FTSE 100 groups who do not use their tax-haven subsidiaries for avoidance or evasion will, as public companies, publish the fine details of the transactions. (Top firms condemned for prolific use of tax havens, 13 May). To legally reduce UK or OECD taxable profits, the deductions must be (1) commercial terms; (2) arm's-length; (3) commercially necessary (4) not tax-dodges – otherwise HMRC can retrospectively deny decades of claims. I estimate that of the global $21tn of tax-evasion-capital-flight, more than $2tn (five million jobs for 10 years) has been illicitly siphoned from the UK. HMRC must repatriate it.
Noel Hodson
Oxford
• The role of accountants and advisers is to legally find the best ways to understand and use the tax regime to the best interest of their client (100 of UK's richest people concealing billions in offshore tax havens, 10 May). To agree with Jennie Granger at HMRC, most accountants will be acting legitimately and there should be nothing to fear. A "crackdown" on tax evasion is however necessary and this leaked data provides the perfect opportunity for David Cameron to show the public that he's serious – turning his words into action ahead of the G8 summit.
Adam Harper
Association of Accounting Technicians		• The role of accountants and advisers is to legally find the best ways to understand and use the tax regime to the best interest of their client (100 of UK's richest people concealing billions in offshore tax havens, 10 May). To agree with Jennie Granger at HMRC, most accountants will be acting legitimately and there should be nothing to fear. A "crackdown" on tax evasion is however necessary and this leaked data provides the perfect opportunity for David Cameron to show the public that he's serious – turning his words into action ahead of the G8 summit.
Adam Harper
Association of Accounting Technicians
• My blood boiled reading about Amazon receiving more grants than the corporation tax they paid. What is this government playing at? My business partner and I set up Firebrand 12 years ago and tried to get funding from regional development agencies. We drew a blank. So we funded the business ourselves. We now employ 50 people in the UK and have offices in Denmark, Sweden, Holland and Germany employing another 50. All of it without a penny from any UK government or the EU. We've always paid our taxes – we've never offshored our activities to avoid tax, although we could have. We invest in the UK and EU with no incentives or support from the state. Good old Amazon, making millions from the UK taxpayer and getting more back from the government than they pay in tax. What a strange world we live in. Some of us struggle to do the right thing for the good of the country and our long-term futures.
Robert Chapman
Firebrand Training, London		• My blood boiled reading about Amazon receiving more grants than the corporation tax they paid. What is this government playing at? My business partner and I set up Firebrand 12 years ago and tried to get funding from regional development agencies. We drew a blank. So we funded the business ourselves. We now employ 50 people in the UK and have offices in Denmark, Sweden, Holland and Germany employing another 50. All of it without a penny from any UK government or the EU. We've always paid our taxes – we've never offshored our activities to avoid tax, although we could have. We invest in the UK and EU with no incentives or support from the state. Good old Amazon, making millions from the UK taxpayer and getting more back from the government than they pay in tax. What a strange world we live in. Some of us struggle to do the right thing for the good of the country and our long-term futures.
Robert Chapman
Firebrand Training, London
• Couldn't the EU agree a uniform rate of corporation tax to be levied by all of its members – including their overseas dependencies? Sorry, Ukip.
Keith Potter
Gunnislake, Cornwall		• Couldn't the EU agree a uniform rate of corporation tax to be levied by all of its members – including their overseas dependencies? Sorry, Ukip.
Keith Potter
Gunnislake, Cornwall
• Amazon exemplifies the Thatcher dictum of "no such thing as society". Their behaviour is not only contributing to the parlous state of our welfare and NHS but is also destroying small businesses. I predict the party that can propose a workable solution to this problem will win the next election.
Stephen J Decker
Chelmsford, Essex		• Amazon exemplifies the Thatcher dictum of "no such thing as society". Their behaviour is not only contributing to the parlous state of our welfare and NHS but is also destroying small businesses. I predict the party that can propose a workable solution to this problem will win the next election.
Stephen J Decker
Chelmsford, Essex
• I'm furious Simon Jenkins should so casually deploy that loaded pejorative "strident" to Margaret Hodge, chair of the public accounts committee (Comment, 17 May). She is not strident: she is determined, forthright and intelligent. More to the point, she is an effective champion of the people inside parliament – and we have damned few of those these days.
Catherine Rose
Olney, Buckinghamshire		• I'm furious Simon Jenkins should so casually deploy that loaded pejorative "strident" to Margaret Hodge, chair of the public accounts committee (Comment, 17 May). She is not strident: she is determined, forthright and intelligent. More to the point, she is an effective champion of the people inside parliament – and we have damned few of those these days.
Catherine Rose
Olney, Buckinghamshire
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