Oct 162012
 
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This is what the Guardian‘s poll claims about Starbucks’ UK operation:

The coffee chain company has used legal tax-avoidance tactics to pay as little as possible, paying £8.6m in taxes on a reported £3bn in UK sales since 1998, and nothing in the past three years. Is this OK?

At the time of writing this post, 93 percent of people say it’s not OK.  The other 7 percent are presumably employed by Starbucks’ clearly well-staffed tax department.

There’s more on this matter in the same paper today in an article which draws a wider conclusion:

The UK international tax system is failing us. HMRC say they can’t do anything about that: candidly I don’t believe them. They could stop sacking staff, for a start. But even if that were true they would still have a duty to point out the fact that the system is not working fairly and to suggest to ministers ways in which the system should be reformed.

For it’s not just Starbucks; there have been plenty of other high-profile cases.  After all, if the laws allow it, we can hardly expect managerialist organisations to feather anyone’s nests but their own.

It is, as Richard Murphy points out in the above quote, the system that is failing us.  And again, at least according to Murphy, HMRC has apparently thrown in the towel.

Well, I’ve had an idea which could help HMRC.  It’d almost certainly pull in a broad and crowdsourceable response and could even help to reduce the organisation’s own overheads.  This brilliant idea?

How about it promotes a Corporate Boycott mobile-phone app?

So how would this work?  Something along these lines:

  1. The objective of the app would be to allow consumers to compare and contrast the percentage of corporation tax paid annually in relation to turnover by a shop or company or other institution before a decision to purchase was made.
  2. The app would piggyback off public domain data already in the possession of HMRC which would allow such a comparison to be made.  A website could be set up which would allow web users to access the same data.
  3. Instead of consumers having to manually keep track of every company the media continues to reveal as the latest tax-avoider we knew nothing about, the app would do this automatically on our behalf according to criteria which could be set.
  4. Options could include sorting via sector; nationality of head office; philanthropic activities; community engagement; ratio between highest-paid and lowest-paid workers; salaries of executives; bonus arrangements; environmental awareness; and the percentage of internationally outsourced jobs.

Obviously, not all the information in point 4 would necessarily be in the possession of HMRC, but I’m sure there are enough open-data organisations out there who’d be perfectly happy to supply the missing information.

The advantages of such an idea?  It’d be entirely free-market driven by consumers.  HMRC wouldn’t need more staff to chase down tax avoiders or even evaders – as long as the data used was reliable, accurate and up-to-date enough, it’d be the consumers and purchasers who’d eventually bring the errant companies, corporations and organisations onside.

Downsides?  The veracity of the data would have to be absolute: imagine the legal implications if a company’s stock market value suddenly plunged because of an erroneous judgement the app simultaneously led millions of consumers to take.

So expensive data – but surely no more expensive than a credit crunch and resulting economic dislocation, millions of unemployed, people suddenly made homeless and a rapidly crumbling health, care and education infrastructure.

What do we say then?  Anyone want to work on this one?  Anyone in open data circles interested in doing the job which HMRC is clearly not up to all on its lonesome?


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  4 Responses to “Memo to HMRC: Corporate Boycott app required!”

  1. Point one: you are right to say that neither the tax system nor HMRC are fit for purpose.

    Point two: wouldn’t it be easier to have a far, far simpler tax system – ideally one that could be neither evaded nor avoided?

    If the answer to that is ‘yes’ then all (all!) we have to do is to define such a system. Stage one: scrap all existing taxes which puts far more money in people’s pockets. This is something I am working on and inviting help about. Just one small suggestion here: move tax from earnings to spending. Obviously not quite as simple as that but the present dog’s breakfast of taxes associated with earnings is inviting avoidance. Yes, tax heating oil, gas and electricity. Not all of it – but quite a lot of it. First ‘X’ units supplied to a house would be free of tax (‘X’ would vary depending on who lived in the house and whether or not it is a main residence). Next 2 x ‘X’ units taxed at, say, 5%: 3 x ‘X’ at 10% and so on and so forth. Live it up in a large house and you could be paying 100% on some of your power purchases. Oh, for businesses ‘X’ would have to be determined in a different way. It could be floor area, number of employees or some other factor. There are many other ways of taxing consumption.

    Yes, of course the costs would be passed on to consumers but there would be no fiddle-able corporation tax and, if the sums are done properly, most businesses would pay no more tax than they should now.

    • I *think* I like your idea quite a bit. Though I do wonder why it hasn’t been engineered to date.

      If there *were* any disadvantages for the big boys, however, it wouldn’t get round corporations playing one country’s tax system off another. And I think that’s an important point.

      Right-wing politicians might even say the suggestions you make were anti-wealth creators. An app like the one I suggest would have a simultaneous worldwide impact; would depend on consumers deciding freely what behaviours to accept and what to reject; and could easily be sold as part of an attempt to return corporate capitalism to that as-yet-to-be-achieved ideal of free-market behaviours. And most of us could agree on the value of sustaining the latter.

      I’ve just thought of another option for the app – you could sort by companies which use workfare schemes or not. Let it be understood, of course: the app could be just as valuable for people who agree with workfare as those who don’t. In its choices and its crowdsourced judgements, governments could have a good ongoing way of measuring how voters and consumers felt about issues such as those we’re looking to address.

      So those on the right of the political spectrum reading this post – don’t discard the app as prejudicial to your cause. There may be many people out there who actually believe that the rich are predominantly wealth creators and deserve not to pay any tax at all!!!

      And if you’re so certain of your point of view, let the market you so treasure take the final decision …

      ;-)

  2. [...]  Add comments Oct 202012   Over the past couple of days, I’ve already posted twice on this subject.  The multitude of tax-avoiding companies which currently populate the planet is [...]

  3. [...] of consumer boycotts these past few weeks.  First, there was the matter of tax avoidance on a massive and unheard-of scale.  More recently, we’ve finally got to the end of the long road which is the Leveson Inquiry, [...]

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