Tax dodgers to be named and shamed

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The Independent Online


Tax-avoiding corporations are to be named and shamed in a campaign to be launched by a coalition of lobby groups tomorrow.

The purpose of the campaign is to force governments to clamp down on tax-avoidance schemes that are estimated to cost the UK over £25bn a year in lost tax, and hundred of billions of pounds worldwide.

The Tax Justice Network is being supported by a group of non-governmental organisations including War on Want and the European Social Forum, as well as the Association for Accountancy and Business Affairs, an organisation that represents accounting academics.

Peter Coleman of War on Want said the plan was to expose "corporate irresponsibility" in tax affairs. It would look into individual companies that appeared to pay an unusually low amount of tax and expose them for the tactics they use to keep the taxman at bay.

Prem Sikka, professor of accounting at Essex University, said it was a problem that was costing Britain dearly. He put the lost taxes due to avoidance schemes at more than £25bn a year.

Under the last Conservative Chancellor, Kenneth Clarke, the Inland Revenue launched a "spend to save" scheme. This increased the number of staff put on investigations into large corporations in the hope of getting more tax from them. But the scheme has been wound down under the current Chancellor, Gordon Brown. He faces a shortfall of up to £7bn in his figures when he announces his Budget, according to a report published today by Deloitte & Touche, the accountants.

The analysis points out that increased defence spending due to the Gulf war, and the lower income that has resulted from falling company profits and thinner trading of shares on the stock markets, are leaving a hole in Mr Brown's calculations.

Deloitte expects the Chancellor to borrow up to £6bn to fill the gap, but he could also raise taxes by up to £2bn through some backdoor methods. One would be to adjust the bands for national insurance payments so they come into line with the income tax bands. This could raise £1bn and be sold by Mr Brown as a reform.

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