FEATURE: Tax avoidance and tax evasion UK Uncut
UK Uncut are committed to playing a part in building a powerful grassroots mass movement, able to resist the Tory-led Government cuts at every turn. They believe the cuts will dismantle the welfare state, send inequality sky-rocketing and hit the poorest and most vulnerable hardest. Their campaign has shown that there is anger at these cuts, that the idea of mass apathy is a myth and that people are willing to do more than just join a Facebook group to stand up and defend what they believe in.
1. What is the difference between tax evasion and tax avoidance?
The basic difference between tax avoidance and evasion is that the former is legal while the latter is illegal. Tax avoidance happens when an individual or company chooses a course of action which results in the wrong amount of tax being paid, in the wrong place and at the wrong time. Tax avoidance is fundamentally an unjust activity, as it offers advantages to rich individuals and multinational companies to reduce their tax bills in a way never intended by parliament.
2. Who pays corporation tax? The corporation, its owners, or the people who buy its products or services?
Corporations are not people, they are legal entities which exist to maximise profits for shareholders. Corporation tax is levied on the profits of companies as they can only make money because of the existing social infrastructure. Without roads, emergency services and schools corporations couldn ' t operate. But many corporations are trying to get out of their social obligations through tax dodging.
3. What is the problem with the current tax model?
Their are many problems, but the main one is that the tax system is skewed in favour of big business. For example, multinational companies operating in different countries are treated as if they are all separate for tax purposes, despite the fact that that they operate as one global company. This allows companies like Starbucks to move money from Starbucks UK to Starbucks subsidiaries in countries with low tax rates. Tax havens are also a massive problem, as their secrecy allows rich individuals and companies to hide their money from tax inspectors.
4. If most tax avoidance is because taxpayers exploit loopholes, why do governments create those loopholes?
Many of these loopholes aren’ t intended by parliament, companies pay lawyers and accounts to trawl through tax law finding loopholes they can exploit. But this government is
revolutionise. it 20