Monday, 12 October 2015

Taxpayers' Alliance and corporation tax

There is a fantastic quote from the Taxpayers' Alliance in this BBC story about Facebook that makes explicit the trouble they have as a "taxpayer" body commenting on this issue.

"Taxpayers will be justifiably confused and angry about this tax bill. But Facebook is right to say that it is complying with UK law, which shows that the problem lies with our complex tax code, and that is what politicians should address as a matter of urgency. We have to ensure our taxes are simple to eliminate loopholes, and that taxes are low to increase our competitiveness, so that companies choose to base themselves here."

So taxpayers will be justifiably angry that Facebook is paying so little tax, but Facebook is right to pay so little tax, and our politicians need to make sure that corporation tax is low so that companies like Facebook operate here. Pick the bones out of that one as they say. The lack of a clear message from an organisation whose messaging is usually very straightforward (and effective) should tell you that they struggle with this issue.

The bottom line, as most people know, is that the TPA is a right-wing pressure group masquerading as a body that represents taxpayers. Ideologically its position is that low taxes, including low corporate taxes, are good. Which is fine, but that means they find it really hard to articulate a position on corporate tax avoidance that is both in line with their real views and doesn't muck up their populist campaigning stance. Really when they see Facebook paying (chuckle) £4327 in corporation tax the TPA don't see a problem, because the company is simply 'optimising' it's tax planning in line with the law. But they know they can't say that out loud because (rightly or wrongly) most actually-existing taxpayers will think Facebook is taking the piss. Hence you get that tortured quote above.

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