In just over a month’s time, the Chancellor of the Exchequer will stand up at the Despatch Box and deliver his Budget.
At the same point last year, the Chancellor announced he would save £5 billion by tackling aggressive tax avoidance and evasion.
Unfortunately, the government’s rhetoric doesn’t match its actions. The online tech giant Google and HMRC came to an arrangement where the company would pay £130 million in back taxes following a six year investigation.
Experts have suggested this could mean an effective tax rate of just 3 per cent. I know many businesses up and down the country who would be very interested in a similar arrangement if this were the case.
I also doubt whether the millions of people who have recently submitted their tax returns and paid what was owed would think the Google deal was a “major success” as George Osborne claimed.
As HMRC reached this deal behind closed doors and maintains that tax affairs are private, the detail of it will never be made public.
If George Osborne is so confident the agreement is a “major success”, how has he measured this? Is anything more than zero a great achievement in his book?
It’s right that the Public Accounts Committee has launched an inquiry into this arrangement and HMRC’s role in all this.
I know from my work on the Committee and through speaking to local businesses that the performance of HMRC still leaves a lot to be desired.
Honest, hard working people who want to get through to HMRC to pay their taxes often face lengthy waits on the phone.
That’s if they can get through at all -; in our recent report we found that at one point only half of all calls were even being answered.
We need a tax system that is straightforward and fair to everyone, not one where big international companies can afford expensive tax accountants to reduce their tax bills while small businesses in Sunderland cough up.
This article was originally posted on the Sunderland Echo’s website on 3rd February 2016. You can view it here.