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HMRC throws the book at Bank of Ireland for tax avoidance

Her Majesty’s Revenue & Customs put its foot down recently by choosing to hold Bank of Ireland accountable for its £30 million corporation tax bill.

When the taxman says it’s had enough with firms both large and small getting away with murder when it comes to tax avoidance through legal loopholes, it means it. Bank of Ireland learned this the hard way after it was caught trying to avoid paying its taxes – specifically taxes on a £91 million gain made by Bristol & West, one of its subsidiaries.

B&W tried to weasel out of the tax bill by a swap contract transfer to another subsidiary of Bank of Ireland, gambling that the massive tax bill would simply vanish into thin air because the original contract was cancelled and then surreptitiously replaced with a brand new, nearly identical one, especially since one of the firms that were involved in the swap wasn’t within a new tax regime, unlike the other company. However, as soon as HMRC caught wind of this bit of legal prestidigitation, the taxman immediately took the bank to task by dragging Bank or Ireland into court – and lo and behold, a judge said that there was no loophole in the tax law that permitted the bank to just erase it £30 million tax bill.

This is a major victory for HMRC and, by extension, all the rest of us who have to pay our fair share of taxes while all these massive firms get to rely upon tax avoidance schemes of dubious legality in order to cling to their ill-gotten gains. I don’t know about you, but I’m tired of hearing about how all these multinationals end up getting away with hardly paying any taxes to HMRC – or even get away with not paying any tax at all – especially since those extra funds could be a much-needed boost to Treasury coffers in a time of austerity!

So Bank of Ireland isn’t exactly Amazon or Starbucks, and it wasn’t funneling its pre-tax profits to offshore accounts in the Cayman Islands or anything like that, but the principle remains the same: they were trying to get away with not paying their fair share. At £30 million that’s an absolutely massive chunk of revenue, and while i’s a high figure the tax avoidance efforts of multinationals are closer to being in the billions of pounds instead of just the millions; still it’s better than getting nothing at all out of the firm!

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