This is a similar problem in the US as well. Naturally it's not possible as an individual, but for corporations, it's the status quo. Even worse, the GOP will support the corporate efforts to hide income and avoid taxes because that's how they think you grow an economy. Business is doing this all over the world yet nobody ever calls them out. As regular people are left with the bill for the recession and corporate leaders still have their pockets stuffed with cash from those high times, perhaps it's time to re-think what's fair.
An extensive Guardian investigationhas examined the accounts of the UK's biggest companies - many of them household names - and discovered a series of sophisticated tax strategies which, critics say, amount to an almost unstoppable tide of perfectly legal corporate tax avoidance.
The veil of confidentiality that covers these tax avoidance schemes is so difficult to penetrate that nobody knows exactly how much tax goes missing each year. But HM Revenue & Customs estimated that the size of the tax gap could be anything between £3.7bn and £13bn. The Commons public accounts committee put it at a possible £8.5bn and the TUC said £12bn.
UK listed companies are not required to set out exactly how much UK corporation tax they actually hand over to HM Revenue & Customs. When the Guardian asked each FTSE 100 company to provide this information only two offered a response.
Similarly each company was asked what its official policy on so-called tax planning is and how this is implemented. No company was prepared to answer the question directly. However, the investigation, which we publish over coming days, has established that:
• The UK-based drinks giant Diageo plc has transferred ownership of brands worth billions of pounds, including Johnnie Walker, J&B and Gilbey's gin, to a subsidiary in the Netherlands where profits accrued virtually tax-free. Despite average profits of £2bn a year, it paid an average of £43m a year in UK tax - little more than 2% of its overall profits.
• Two major drug firms have shifted ownership of their brands to tax havens in the Caribbean. Their UK operations can then be made to pay royalties for the use of the trademarks, reducing their profits and the amount of tax due in this country.
• An internationally renowned corporation has structured itself so that it is now simultaneously a British public company, tax-resident in Amsterdam, but whose brands are Swiss-owned.
