Ban non-UK based corporations operating in the UK if they haven't paid corporation tax to the UK over 2 years

Posted on 10-01-19 by Shoayb Number of votes: 0 | Number of comments: 3

There are corporations operating in the UK who buy & sell their products/services in the UK but because of their accounting wheezes haven't paid corporation tax to the state in years.

 

In the link below is this company which hasn't paid taxes:

 

https://leftfootforward.org/2018/03/heres-how-caffe-nero-made-2bn-in-sales-but-did-not-pay-a-penny-in-corporation-tax/

 

Excerpt from above link:

 

"Accounting and tax losses in company accounts rarely connect with any commonsensical understanding of economic loss...Caffe Nero is part of a maze of companies...Some of Caffe Nero's competitors are known to have reduced UK taxable profits through intragroup purchases/sales and royalty payments..Since December 2006, the issued share capital of the company has remained static at £2.024m. This limits the ultimate loss that shareholders may have to absorb if the business was to cease. The remainder of the acquisition price was funded by a variety of bank and intragroup loans. External loans have periodically been refinanced"

 

Now clever accountants will always be around & a future Labour government may close many of these loop-holes but the danger is this would become a game of 'whack o mole' (e.g. every loop-hole closed another is found & exploited).

 

So I propose the following solution: 

 

1) If a non-UK based corporation reports for more then 2 years that it can't afford to pay either it's corporation tax or the pension liabilities of it's UK employees then that corporation automatically lose the right to buy/sell it's products or services in the UK untill it successfully resolve it's tax bill & pension liabilities. 

 

2) That when such a business loses it's right to operate in the UK that prior to all it's operations being closed in the UK it's UK workers/front-line employees be allowed to buy at a discount it's premises & machineries as well as be given it's UK client list so those employees can run premises/machinary of that business as a 'worker co-op' in exchange for the UK tax authorities (i.e. HMRC/Treasury) writing off their tax bill & pension liabilities.

 

And if that corporation refuses?

 

Seize their UK premises & machinary as well as not only fine the hedgefunds/equityfund owners of that corporations according the size of their company turnover but also blacklist everyone of their board members from ever operating a business venture (e.g. being able to sit on the executive boards of UK-based corporations, their hedgefunds/equityfund company having any stake in a UK private firm that has a government contract like with the NHS) in the UK again.

 

The behaviour of some of the corporations operating in the UK has been nothing but disgraceful in all the accounting tricks they play to reduce their tax bill to the state to miniscule size but in some case, like NeroCafe, they take this abuse further & not pay any corporate tax at all and it is this a future Labour-run Treasury needs to clamp down severely.

 

Want your blood to boil even more? Read the article below by professor Prem Sikka on how Thames Water runs it's accounting scame & tell me if things need to change.

 

https://leftfootforward.org/2017/10/multinational-companies-are-using-this-loophole-to-avoid-millions-in-corporation-tax/

 

And here's how Nike run it's little accounting scam:

 

https://uk.reuters.com/article/uk-eu-nike-tax/nikes-dutch-tax-status-investigated-by-eu-commission-idUKKCN1P415V?il=0

 

4) That Labour create a special 'corporate tax avoidance' unit for it's Treasury team & permanently appoint professor Prem Sikka on how to reform the UK corporate tax code to stop this type of abuse.

Referring to: Economy, Business and Trade

The Economy, Business and Trade Policy Commission develops Labour's economic and business policy, including industrial strategy and international trade.

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