David Cameron slammed ‘clever’ Contractor Accountants who aid tax avoidance for big companies and rich individuals. He said that there was an army of clever Accountants conspiring to “rip off working people and plunder their natural resources” by tax avoidance schemes.
“We can see the results” he said “The government cronies get rich â€“ some beyond their wildest dreams of avarice â€“ while the people stay poor. But actually, all this matters massively to developed countries too. When trade isnâ€™t free we all suffer because of tax avoidance.
â€œWhen some businesses arenâ€™t seen to pay their taxes that is corrosive to public trust. When shadowy companies donâ€™t play by the rules that drives more box-ticking and regulation and that makes life harder for other businesses to make a profit.â€
Cameron’s objective is to try to get the world’s countries to unite against companies who sell a lot in a country but pay no, or little, tax by loading up costs there so that there is no, or little, profit. He is also targeting the specialist contractor accountants who come up with onshore or offshore schemes that see their clients pay very little tax. This is tax avoidance.
Although his campaign may seem a good idea he is taking a bit of a risk here. Firstly, his father Ian made the family fortune by being one of the first to indulge in tax avoidance this way by setting up offshore schemes in places like Switzerland and Panama to avoid paying tax and to profit from helping others to avoid tax. Indeed David Cameron’s inheritance came largely from money made from tax avoidance.
Also his Chancellor, George Osborne, has a Â£4.5m offshore trust. His father-in-law Lord Astor also operates offshore tax avoidance schemes and the Conservative Party’s major donor Lord Ashcroft does the same.
Think Twice Contractor Accountants
When attacking the companies who don’t pay much tax in the UK he is also taking a chance. Many of those employ thousands of people who pay billions in income tax. Companies already here may think twice about expanding here in this climate. Also, companies thinking of coming here may think twice about it now.
So, if Cameron succeeds in getting the world to tackle tax avoidance then it is worthwhile doing. However, if he doesn’t he is hurting Britain by scaring off companies who may have employed people who would then pay income tax and stop claiming benefits. So, this is not the kind of thing to do without knowing whether you have a chance of succeeding or not.