What it says on the TIIN?

May 16, 2012

While I’m on the subject, let’s look at what the Government actually told us about the Controlled Foreign Companies “reform” that Panorama mentioned.

You’ll have noticed this blog is called TIINtax – so let’s look at the TIIN, the “Tax Information and Impact Note” published with the Controlled Foreign Companies proposals.

First of all there were some “interim improvements”. When they were announced they were supposed to reduce the tax received in the UK by about £50 million and then year on year “the impact on receipts is expected to be in the low £10 millions.” Then the TIIN was revised to clarify that we’re giving away tax of around £25 million a year – enough to pay for, what, an extra couple of thousand nurses?

And now we have CFC “full reform”. The TIIN for that says quite openly that

A controlled foreign company is an overseas company controlled by United Kingdom residents which pays less than three quarters of the tax which it would have paid on its income had it been resident in the UK

Yes, folks, we’re looking at a special tax regime that applies to companies that are owned in the UK but paying less tax than they would have done if they’d been operating in the UK. And…

No tax will be due in respect of a CFC if the company satisfies any one of the statutory exemptions or exclusions.

Yes, what we mean by “reform” of the special rules that apply to these companies is… that we’ll invent some nice simple rules that keep them out of UK tax altogether. There ought to be a “ka-ching!” noise that you can insert into a website for moments like that.

Look at the top line of the table of impacts in the TIIN. This is how much tax we are giving away (all right, how much less tax will be due under these rules than if we didn’t “reform” them).

2013-14 -175 million
2014-15 -450 million
2015-16 -690 million
2016-17 -805 million

I don’t have the software to draw that as a graph in a blog post but imagine it – and, in your mind’s eye, while you’re following the numbers upwards, what do you think we’ll be giving away (sorry, “reforming”) in 2018? 2019?

As Graham Black, President of the ARC Union, said on Panorama: it’s like legalising murder and then saying your crime figures have fallen!

Posted in Bit of politics |

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