Housing

Quote: DaveO "Well its pretty obvious some companies indulge in aggressive avoidance and some do not. Those not as aggressive will still be at it to a degree. If you think the consolidated accounting of group profit that determines how much tax BP pay here isn't being reduced by transfer pricing or other avoidance measures I think you would be wrong.

Either way it has nothing to do with the corporate tax rate and the fact you seem to think they pay their full whack rather undermines your argument it should be reduced. Why reduce it if the likes of BP pay up?

No they have not. This tells you why.

rlhttp://fullfact.org/factchecks/labour_50p_tax_rate_millionaires_leave_country-28645rl

What also happened was the reverse effect of the forestalling mentioned in the link above when the current govt announced it was going to drop the top rate.

Instead of forestalling people deferred incomes so they were not taxed on it until after the rate went down. So having deferred it the tax revenue took a jump in the year they elected to pay up as they declared more taxable income that year than when the 50p rate was in force.

So people elected to be taxed in 2009-10 tax year on projected liabilities for 2010-11 when they would have got hit with the new 50p rate.

Then in 2011-12 when it was in force they deferred income because they were told it going to drop.

Net result? Tax revenue in 2009-10 and 2012-13 jumps in net terms compared to the period the 50p rate was in force.

Had the 50p rate remained in force the effects of forestalling and deferring income would have disappeared.

What that means it was not a reduction the rate that caused a jump in tax revenue due to some ludicrous notion all these high earners were suddenly spurred onto ever greater entrepreneurial effort or all rushed back to the UK having up sticks and left.

It happened because our idiotic governments (plural) announced the changes in advance allowing people to indulge in tax avoidance. And yes the Labour govt was stupid not to realise announcing the increase to 50p in advance would would result in forestalling.

My cynical view is the Tories didn't make a similar mistake by announcing the reduction in advance. The tip off was deliberate.

Both governments lost out on tax revenue by allowing individuals to declare taxable income when it suited them by giving them ample warning. Incompetence or deliberate policy?

The fact the Tories claim it is proof a lower rate increases revenue is clearly an outright lie as it ignores these factors.

Now they will spin it the way they do because they are happy to peddle such misinformation but what about you? Is that what you are doing or did you just swallow the propaganda hook, line and sinker?'"

Point 1 you admit some companies will pay tax at reasonable rates - BP paid 12bn in 2012 - even though they have the option to relocate to a zero tax environment?

Second point you also admit that the tax take has increased - for whatever reason.

That is all that was required - no need for all the fog-knitting