How companies use inter-country ruses to dodge tax

Companies dodge tax like rats dodge peckish weasels. Which at first glance is not unreasonable. But when it comes to tax the weasel has been hamstrung by tax legislation carefully designed by governments around the world to be feeble and loophole ridden. 

Governments simultaneously collude and compete with one another to provide gaps that expensively advised companies can drive their earnings through. Providing highways and byways for companies like Amazon, Google and Starbucks to shift UK profits to low tax countries thereby comprehensively dodging UK tax. 

One such gaping loophole is to finance a company with debt instead of equity. An example of this is provided in a report by Richard Murphy, the tax campaigner, on the devices used by Npower to dodge paying tax in the UK. 

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Rip-off News round-up. Our pick of the last week's media (Thu 15th August)

UK wages decline among worst in Europe

UK average hourly wages have fallen 5.5% since mid-2010, adjusted for inflation. In 2009, the average public-sector worker earned about £16.60 per hour, which dropped to about £15.80 in 2011, the IFS said. Meanwhile, hourly pay for private-sector workers in 2009 was just over £15.10 and dropped to about £13.60 in 2011. Across the European Union as a whole, average wages fell 0.7%. Only Greek, Portuguese and Dutch workers have had a steeper decline in hourly wages, the figures showed. The GMB union said "Employers paying low wages get taxpayer subsidies in the form of tax credits to assemble a workforce for them to make decent profit margins." BBC NEWS

Serious Fraud Office admits losing thousands of documents linked to BAE investigation

The Anti-fraud unit says last year it accidentally sent 32,000 pages obtained as part of investigation into defence firm to the wrong person. 3% of the documents have not yet been recovered. The documents had been compiled during a six-year investigation into allegations that BAE had paid bribes around the world to secure lucrative arms contracts. GUARDIAN

US fast-food workers in vanguard of growing protests at 'starvation' wages

Dozens of profitable Wall Street-listed fast food and retail chains are being rocked by unprecedented workforce- and consumer-led protests. The one-day protests struck not only McDonald's, Wendy's and KFC but also more expensive retail stores such as Nike, Macy's and Victoria's Secret. Last month McDonald's made headlines after it published a guide budget for employees living on the minimum wage – a gesture that backfired after the firm's own calculations showed survival on what it paid was only possible with a second job or if you live without a food budget or heating. GUARDIAN

Official youth unemployment nudges 1m as think-tank claims it's more like 1.3m - and HALF have never done a day's work

The so-called claimant count fell by 29,200 in July - the ninth consecutive monthly drop - to 1.4million, the lowest since February 2009. Total unemployment, including those not eligible for benefit, fell by 4,000 in the quarter to June to 2.5million. But unemployment among 16 to 24-year-olds increased by 15,000 to reach 973,000, while the number of people out of work for more than two years rose by 10,000 to 474,000, the highest since 1997. DAILY MAIL

Gas and electricity bills could rise by £140 before winter (despite energy companies making £3.3bn profits since last election)

Labour said the figures show that David Cameron has not done enough to crack down on profiteering by gas and electric firms. According to Ofgem’s latest Electricity and Gas Supply Market Indicators, the typical domestic dual fuel bill now stands at £1,420 a year, compared to £1,105 in May 2010 when David Cameron became Prime Minister. DAILY MAIL

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"Go home or face arrest"... Ever wondered what's on the other side of that van?

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Graphs at a glance: see which government departments spend more than half their total staffing budget on consultants: it's outsourcing in all but name

If you thought the only way to outsource public services was to hand them over wholesale to Capita and G4S you'd be wrong. For some years government departments' use of consultants and interim staff has de-facto outsourced central government functions to a staggering degree. 

This has actually been most stunning in the period before the current Conservative-Liberal coalition government, a time when Labour were in power. Maybe the current coalition government no longer needs to hire so many consultants for hospitals, schools and prisons. After all the hospitals, schools and prisons themselves are being handed over wholesale to the consultants, not to advise on but to own and extract profits from. Even if the new owners do hire consultants, they aren't on the government's books.

Data below is from the National Audit Office's (NAO's) report "Central government's use of consultants and interims". Here we found a truly gob-smacking graph showing the cost of consultants was 40% or more of total staff costs in the Departments of Transport, Education, Energy, and the Home Office. 

What is a minister to do? Given the choice of public servants serving the public, or a consultant hand-picked, hired, paid, bonussed, and under threat of being fired by the minister himself?

Is it a coincidence that the departments most enthusiastically shovelling public money into private purses, Transport; Energy; Education; Health, are the heaviest users of consultants?

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Rip-Off News round-up. Our pick of the last week's media (Thu 8th August)

Tax evasion prosecutions focus on middle classes, not the rich and corporates

A total of 617 people were prosecuted in the financial year 2012-13, up from 302 the previous year, with more white-collar businessmen and women and landlords being hit. Rather than individuals who owe hundreds of thousands of pounds, HMRC is chasing people like doctors, dentists, lawyers, construction contractors, restaurant owners and buy-to-let investors who have not declared amounts in the tens of thousands. Investigators have been focusing more on middle-class tax-evaders rather than the super-rich, who are harder to prosecute. As part of the 2010 Spending Review, Her Majesty’s Revenue and Customs (HMRC) was given an extra £1 billion to tackle tax avoidance. TELEGRAPH

More than a million UK workers are on zero-hours contracts with no guarantees of shifts or work patterns - four times official estimates

The Business Secretary Vince Cable fears zero-hours contracts are being abused after research suggested a million people could be working under them. However, he pointed out that in many cases the level of flexibility offered by the contracts suited employees. "It can work for the worker as well as the employer," he told the BBC. ONS stats also say 21.7m are working full time and 8.1m part time. BBC NEWS

Attack on rip-off 0844 GP phone numbers that can hit patients with unexpected charges of up to 41p per MINUTE

The NHS Choices website, which describes itself as the ‘front door to the NHS’ has been found guilty by the Advertising Standards Authority of promoting these expensive GP numbers without spelling out the cost involved. More than 900 GP practices across the country use 0844 numbers despite official guidance from the Department of Health and the NHS hierarchy that they should not do so. Callers with a mobile can be charged up to 41p a minute to reach these numbers – more than double the figure for a normal geographic number beginning 01 or 02. Many people dialling their local GP from a landline would get the call free under their call package, however dialling an 0844 number can generate a charge of 5p a minute plus a 13p set-up fee. Some of the income from the calls goes direct to the GP surgeries to subsidise the cost of their telephone systems. DAILY MAIL

Workers 'set to lose £6,660 from their wage packets between 2010 and 2015'

Workers will be earning £1,520 a year less by 2015 than in 2010 - amounting to a loss of £6,660 in real terms over five years. The total would be enough to pay for the average family weekly shop for a year and a half or buy a small car, according to the Labour party, which based the figures on analysis of Office for Budget Responsibility forecasts. The figures also reveal a widening north-south income divide, with real wages now 8.1 per cent lower in Yorkshire and the Humber compared with a 5.5 per cent fall in the south east. DAILY MAIL

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Welcome to low pay Britain

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Graphs at a glance: households in fuel poverty tripled in a decade

From a report by the Parliamentary Select Committee on Energy and Climate Change:

"Rising energy costs are the major factor in the upward trend in fuel poverty; the table below shows the movement in domestic gas and electricity prices since the low point of the early 2000s. The most recent official statistics indicate that 3.5 million households in England were fuel poor in 2010 and the Government has estimated that 3.9 million households were in fuel poverty in 2012."

 

It will not have escaped your notice that the steepest rise was during the previous Labour governments. Something the Tory-LibDem coalition has failed to reverse.

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Graphs at a glance: mortality rises by 19% in England's winter. One in five of these excess deaths are caused by cold homes.

UPDATE NOV 2016: In 2012 so-called “avoidable” winter deaths were at 24,000. Since then the death rate has almost doubled. According to the latest ONS figures, almost 44,000 “excess” deaths were recorded for the winter of 2014/15. This was the highest number recorded since 1999, with 27% more people dying in the winter months compared with the non-winter months. The majority of deaths (36,300) occurred among people aged 75 and over, with cold weather and underlying health conditions cited as key causes. Virulent strains of winter flu, along with housing conditions and energy bills, are also thought to be contributing factors.



From a report by the Parliamentary Select Committee on Energy and Climate Change, here is an extract of evidence provided to the Select Committee by the National Pensioners Convention:
 

"Every year, mortality rises by 19% in the winter months in England. This amounts to an average of 27,000 “excess” winter deaths (EWDs); 90.8% of which last year were in the over 65 age group.

The majority of these deaths occur among older people, especially women, and those with underlying health problems. However, they are not people who would have otherwise died at that time. Most deaths are due to cardiac disease, strokes and respiratory problems, not hypothermia.

The Marmot Review Team also found there was a greater risk of death in colder housing than in the warmest housing, estimating that 21.5% of all excess winter deaths could be attributed to cold homes.

Excess Winter Deaths

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Office of National Statistics says numbers on zero-hour contracts is 250,000. Chartered Institute of Professional Development says it's 1m

Fee, KJ and Chris look for evidence...

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Rip-Off News round-up. Our pick of the last week's media (Thu 1st August)

Bamboozling bills, a spineless watchdog and policies that cripple the poorest: MPs slam energy market that fails hard-pressed households 
The damning report by MPs slams the energy giants for lack of transparency around profit margins. It also lays into the regulator, Ofgem, for not forcing suppliers to be more open about profits, and says energy efficiency funding does not go far enough to help vulnerable. It adds that energy bills are set to rise further. DAILY MAIL

Lewisham hospital cuts plan ruled unlawful by judge

Health secretary Jeremy Hunt's plan to reduce A&E and maternity services at Lewisham hospital has been overturned at the high court. Hunt’s proposed changes were part of a wider shakeup of services in the capital after the financial collapse of the neighbouring South London Healthcare NHS trust, which went into administration after it started losing more than £1m a week. The case was won by the Save Lewisham Hospital campaign, a community-based group made up of and supported by patients, community groups, GPs, hospital doctors, nurses and other health professionals. Their law firm, Leigh Day, said "These difficulties were caused by disastrous PFI contracts entered into by South London, which were costing £60m a year to service. The court found Jeremy Hunt had acted outside his powers by trying to make Lewisham pay for the financial problems of its neighbour." GUARDIAN

Sports Direct: 90% of staff on zero-hour contracts
Retail chain's 20,000 part-time workforce do not know how many hours they will work each week and have no holiday or sick pay. Meanwhile 2,000 full-time staff are about to cash in bonuses of up to £100,000. Bosses at Sports Direct, the UK's biggest sports retailer, were this month hailing their bonus policy for full-time staff as that of a model employer. The four biggest supermarkets in Britain, Tesco, Asda, Sainsbury's and Morrisons, said they do not use zero-hour contracts. Other retailers to confirm that they do not employ staff on these terms include Argos, B&Q, Homebase, John Lewis and Marks & Spencer. GUARDIAN

Government attempting to overturn verdict against its employment schemes
In what has come to be known as the Poundland case, the Department for Work and Pensions will argue that the supreme court should overturn the unanimous verdict of three appeal court judges this year that almost all of the coalition government's employment schemes were operating unlawfully. GUARDIAN

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