Agenda item

Tax Avoidance by Multinational Companies

It was moved by Councillor Jack Clarkson, seconded by Councillor John Booker, that this Council:-

(a)       calls on the Coalition Government to prevent tax avoidance by multi-national companies every year, of which it is has been estimated that the UK Treasury alone loses up to £12 billion a year, monies that could be spent on public services, welfare, health, education and the armed services, to better the people of this country;

(b)       notes with disappointment, that whilst ordinary people face falling household income and rising costs of living, some multi-national companies are avoiding paying billions of pounds in taxes from a tax system that fails to make them pay their fair share;

(c)        believes that developing countries and the UK alike would benefit from a fairer tax system where multi-national companies pay their fair share;

(d)       condemns the use of tax havens by some UK companies which is rife, with many of the FTSE companies routinely using tax havens;

(e)       calls on the UK Government to take on a lead role in creating a fairer tax system to end tax dodging by multi-national companies, and to prevent Corporation Tax avoidance which is unjust as it harms ordinary people around the world, increasing poverty and inequality;

(f)        believes that local authorities would benefit from a fairer tax system where multi-national companies pay their fair share, enabling authorities to provide quality public services; and

(g)       calls on the Government to listen to the strength of public feeling, and to act to end the injustice of tax dodging by large multi-national companies in developing countries and the UK.

Whereupon, it was moved by Councillor Ben Curran, seconded by Councillor Harry Harpham, as an amendment, that the Motion now submitted be amended by the addition of a new paragraph (h) as follows:-

(h)       further supports the following proposals set out by the Shadow Chancellor, the Rt. Hon. Ed Balls MP in June 2014 to tackle tax avoidance and calls on the Government to implement them:

(i)         closing loopholes, particularly the “Quoted Eurobond Exemption” that’s estimated to lose the country up to £500 million a year, that allows companies to move their profits to tax havens abroad - as part of this, Labour will table an amendment to the Finance Bill pressing the Government to act on this loophole;

(ii)        making the tax system more transparent so we know who owns firms and how much tax they pay - under this strand of the policy, Labour will require all UK Overseas Territories and Crown Dependencies to publish the names of beneficial owners of companies;

(iii)       putting a stop to dormant companies by requiring an annual confirmation of dormancy - currently, dormant companies can be used to avoid filing Corporate Tax returns, this means they can trade for up to five years without paying tax; Labour also plan to look into asking banks to automatically inform HMRC when there is activity in supposedly dormant accounts;

(iv)       strengthening the National Audit Office to scrutinise tax reliefs and find when they are abused to avoid tax;

(v)        working with ‘developing’ countries to tackle tax avoidance - this will include ensuring such countries, which are often affected by tax avoidance (in particular, through the extraction of natural resources), are part of global talks on tax reforms; and

(vi)       finalise proposals to deem construction workers as employed for tax purposes if they meet relevant employment criteria.

On being put to the vote, the amendment was carried.

It was then moved by Councillor Ian Auckland, seconded by Councillor Andrew Sangar, as an amendment, that the Motion now submitted be amended by:-

1.         the relettering of paragraph (g) as a new paragraph (h) and the insertion of the following words at the start of that paragraph:-

            “recognises that there is always more that can be done and therefore…”

2.         the addition of a new paragraph (g) as follows:-

(g)       is proud that Liberal Democrats in Government have taken tax avoidance seriously and that as a result of Liberal Democrat influence:

(i)         33 tax loopholes have been closed;

(ii)        1,000 new tax investigators have been employed;

(iii)       £9 billion has been clawed back through deals with Switzerland, Liechtenstein and the Channel Islands;

(iv)       262 banks have signed up to the Code of Practice on Tax, stopping them from promoting tax avoidance;

(v)        an extra £1.4 billion has been raised by using better data to detect fraud; and

(vi)       10 times more people have been prosecuted for tax evasion than in 2010;

On being put to the vote, the amendment was negatived.

The original Motion, as amended, was then put as a Substantive Motion in the following form and carried:-