Dear Lord you\’ve got to hand it to hte man. His stupidity knows no bounds. His latest report.
Since 2009, HSBC and Barclays bank may well have underpaid UK corporation tax to the tune of £2.6 billion. This figure represents the difference between the tax the banks actually paid and what would have been due had they been taxed under what’s called a unitary taxation system. The data’s in a new report I have written with Meesha Nehru for the Tax Justice Network. As we argue, year on year, this is an extra £650 million that just two banks could be contributing to the Exchequer if we had a fairer corporate tax system in the UK. To put this amount into perspective, according to HMRC the total contribution of the banking sector in corporation tax (on income as opposed to the separate bank levy on debt) in 2011-12 was £1.3 billion.
And then they go on to look at profits and taxes in the 2009 to 2012 tax years. And they try to break out the UK paid taxes from the total global taxes. And amazingly they end up demanding that the two banks must pay much more in the UK. And they propose unitary taxation to make them do so.
At which three points occur.
1) The total effective tax rates don\’t look out of line. Indeed, Barclays appears to have paid 44% and 315% of total profits in tax in the past two years. Their figures not mine note. This means that any greater amount of tax paid in hte UK is only going to come from some smaller amount of tax paid elsewhere. This isn\’t about the banks being made to pay more. It\’s nationalism about who the tax is paid too.
2) They really are whazzocks though. What happened in 1007/8? Ah, yes, that\’s right, the greatest financial collapse since the 1930s, wasn\’t it. Banks made losses, humoungous great stinking losses. But not actually worldwide. HSBC did not make vast losses in its Singapore, Hong Kong or China business, did it? But it did in the UK. And yes, we can indeed carry forward losses: there\’s no possibility of a sensible tax system if you cannot. So comparing UK tax paid to size of UK business in a period when the UK business can use previous losses to offset UK tax bill is going to be, well, somewhere between a little odd and being a complete whazzock.
3) But if unitary taxation is the way to go then we absolutely do not need Ritchie\’s beloved country by country reporting, do we? For the whole point of that is to tax profits where profits are made. Which we don\’t do with unitary taxation. The fool.
It also rather amuses me that global tax paid is the current year charge to the accounts. Whereas with Barclays it is current year tax actually paid for the UK revenues. Corporation tax is paid in arrears lads……