Three of my favourite topics feature in this issue of the Denton Briefing – tax, Bond and beer. But not necessarily in that order and not necessarily for the right reasons. What is definitely welcome – and long overdue – is to have someone in the media reminding us that legitimate tax avoidance is not immoral and quoting Thomas Tomlin’s famous judgment from the 1930s: “Every man is entitled if he can to order his affairs so that tax … under the appropriate Acts is less than it otherwise would be.” It’s hard to argue with that. There are also some encouraging noises about the likely impact of Brexit on the UK and the good news from the OECD that some industrialised countries are now cutting taxes in an attempt to spur growth.
So finally it’s Bond and beer. I don’t recall Ian Fleming devoting much if any attention to Bond’s finances but I like to think that James was better advised than the “German Bond” seems to have been. But then again, if the German government only levies the equivalent of 4p on a pint of beer it should not perhaps be too surprised if some of its taxpayers are not in a condition to recall all their “offshore investments”.
Legitimate tax avoidance not immoral
A tone of righteous hysteria has crept into discussions of tax avoidance, writes Richard Dyson in The Daily Telegraph. Instead of attacking legislation – either for being poorly constructed or for taxing insufficiently – a moralising group (not only on the Left) is now rounding with McCarthyist fervour on those who wish not to pay needless tax. This drift into regarding legitimate tax avoidance as immoral or a failure of patriotic duty is dangerous, because it clouds the real problems in our tax system: over-complex, vague and bodged legislation. Taxpayers shouldn’t have to cough up voluntarily for deficiencies in law.
EU turns its sights on Amazon and McDonald’s
Amazon and McDonald’s are next in line to be brought to book by Brussels over alleged tax avoidance, says The Sunday Times. Fresh from ordering Apple to pay €13 billion in back taxes to the Irish state, the European competition commissioner Margrethe Vestager said she would soon issue penalties against the online retailer and the fast-food chain. Vestager has formally charged Amazon and McDonald’s with securing sweetheart tax deals with Luxembourg in breach of EU state aid rules.
Tax policies have turned from austerity to growth, says OECD
Industrialised countries have started to cut taxes in an attempt to spur growth, in a marked break with policy since the financial crisis, writes Vanessa Houlder in The Financial Times. The OECD has published its annual report on tax changes around the world, revealing that eight of the leading industrialised nations either lowered their corporation tax rates last year, or announced plans to do so. Japan, Spain, Israel, Norway and Estonia have all reduced theirs, while further reductions were announced by the UK, Italy, France and Japan. The OECD said the continual increases in labour taxes and value added tax that characterised the post-financial crisis era had stopped and “may even be reversing” as governments turn towards a search for growth. However several countries also raised tax rates on dividends and other sources of personal capital income, which “could be a response to a renewed focus on inequality and the differential tax treatment between labour and capital income”.
Brexit will boost UK economy, says Axel Springer chief
The head of German media giant Axel Springer has strongly backed the UK’s economy after Brexit from the European Union, saying the UK will be better off than the other member states within three to five years, writes Rachel Middleton in IBTimes UK. While conceding that the UK is likely to undergo short-term pain, including currency fluctuations and uncertainty in its property market, Mathias Döpfner said the UK would be a more attractive destination to foreign investors. “We should take it like a wake-up call for Europe to refresh its political approach,” he said. “I count on the pragmatism and the free-market orientation of the British people and they will find ways to attract foreign investment and be an important business hub.”
“German James Bond” goes on trial for tax evasion
Germany’s answer to James Bond faces what may prove to be the greatest challenge of his career as he goes on trial on charges of tax evasion, writes Justin Huggler in The Daily Telegraph. Werner Mauss, 76, a former intelligence agent described as a “living legend” in Germany, is accused of evading €15.2 million (£13m) in taxes on profits from offshore investments. The case against him centres on various offshore accounts he allegedly holds in the Bahamas, Luxembourg and elsewhere, which prosecutors say he failed to disclose to the German tax authorities. His name has also been connected to various offshore shell companies listed in the “Panama Papers”. Werner’s lawyers say the accounts were set up by various intelligence agencies and used for operations, including hostage releases. If convicted, Werner could face several years in prison. The trial is expected to last until December.
High duty rate blamed for UK beer consumption drop
The UK’s high duty rate on beer is blamed for further decline in the UK’s alcohol consumption rate, writes Ruki Sayid in the Daily Mirror. According to the British Beer & Pub Association (BBPA), annual sales of beer fell by 1.5% in 2015, representing a loss of 114 million pints from Britain’s pubs, bars and restaurants. Britain has fallen to 14th place in the league of beer-drinking nations. We sank 119 pints per head in 2014, compared with a 208-pint average in 1980, when we were among Europe’s biggest drinkers. The Czech Republic now tops the league with 253 pints, followed by Germany on 188. The UK slump has been blamed on duty. The government collects 52p in tax on every pint of beer sold in the UK, compared with just 4p in Germany.
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