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Are taxpayer-funded organisations enabling tax avoidance?

Here’s a story that’s nearly guaranteed to rattle the cage of any good taxpayer: funds collected by HMRC may be going to help enable multinationals avoid tax!

I truly hope this story isn’t true, because otherwise some heads are absolutely going to roll; the UK taxpayer funded Organisation for Economic Cooperation and Development stands accused of paving the way for multinaitonals such as Amazon, Hewlett Packard, and Google in order to help them shift profits to subsidiary firms located offshore in order to obviate the need for these firms to pay their fair share of taxes to HM Revenue & Customs. Meanwhile the lot of us poor plebeians working for a living in the UK have to jump through hoops to make sure we don’t end up wrongly accused of disguised employment because the current IR35 guidance is a complete joke – it’s just not fair in any way, shape or form.

The lid was blown off the whole OECD situation by financial and entrepreneurial news giant Bloomberg, which uncovered evidence that the Organisation was issuing massive amounts of guidelines in order to promote an activity referred to as ‘transfer pricing.’ Engaging in transfer pricing between subsidiaries of the same firm enables that company to transfer profits to a subsidiary located offshore in a country that has a reputation of a tax haven.

Now, it’s one thing if some independent organisation was providing the information to these multinationals. The problem here is that the OECD receives funding from the governments of a number of developed countries around the world, and UK taxpayers contribute nearly £10 million of the Organisation’s total funding; in other words, the Government, which has raised its voice on several occasions about how these dastardly multinationals have been pulling the wool over our eyes for far too long and owe the UK billions in tax revenue, are completely complicit in the deal by agreeing to fund the OECD to the extent that it does.

Not only that, but Chancellor George Osborne has actually praised the OECD in the past, remarking that he valued the economic advice and expertise the Organisation has offered the UK – and it only cost us £10 million out of pocket for that advice. Of course, there are some estimates that HMRC loses nearly £70 billion on an annual basis to tax avoidance, which means that we’re effectively shooting ourselves in the foot – if we could afford to buy a gun, that is.

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