GOVERNMENT CONTRACTOR FILTERING MILLIONS IN OFFSHORE ACCOUNTS TO AVOID TAX – For the last few months the public has been bombarded with news reports of Google, Amazon and Starbucks avoiding paying corporation tax on their UK profits.
It is now revealed that Telereal Trillium, which has a £3.2 billion Government contract to managed Government buildings, is funneling £163 million of its post-tax profits to a base in the British Virgin Islands in order to avoid paying tax on share dividends.
Telereal Trillium did in fact file its full UK corporate tax liability in 2012 but used a number of loopholes to filter £163 million in post-tax profits, in the form of share dividends, to a parent company in the British Virgin Islands.
It has been calculated that £673 million has been funneled to its offshore owner since 2010 and its accounting records clearly shows a number of ‘shell’ companies are being used to filter funds to avoid tax.
David Cameron has made a number of statements over tax avoidance and has referred to the practices as under-handed and shadowy and yet despite his rhetoric nothing has been achieved in order to halt the surge in the number of companies using various loopholes in tax legislation, which allows them to avoid paying tax.
I’m sure the British taxpayer will be once again shaking their heads in disbelief at the greed and immoral practices used by companies but this latest event is certainly going to stick in their craw considering that the vast profits Telereal Trillium makes comes directly from the taxes they are unable to avoid.
Telereal Trillium provided a statement to the press in which they announced that the Work & Pensions Department, who are responsible for awarding the contract, are fully aware of their accounting practices of which have never been questioned.
Members of the press have been asking the Works & Pensions Department for a response but unfortunately they have declined to comment.
There are a few things here that really disturb me:
1. Why does the Government award contracts to companies that actively avoid paying tax?
2. Why is the Government so incapable of creating legislation that could prevent such unscrupulous tax avoidance practices?
3. Why is our Government permitted to declining from giving a statement? Are our Ministers no longer accountable to the public?
It is not unreasonable to think, considering the recent ‘cash for questions’ scandals that some Ministers are profiting from awarding companies like Telereal Trillium with such lucrative contracts.
Writing legislation is in fact highly complex and I would challenge anyone to find a Minister or MP with enough intelligence to write tax legislation. This is evident in the fact that tax legislation is primarily written for the Government by accounting and tax specialists; such as KPMG.
These firms then pass on their detailed knowledge to their clients, such as Telereal Trillium, Google, Starbucks and Amazon. This in turn exposes our Government Ministers and MPs incompetence further and yet despite their continuous failings rarely do we witness a resignation.
Finally Minister’s don’t like to admit they are incompetent and therefore often refuse to answer question that the public have interest in. Unfortunately we don’t live in a democracy and Minister’s and MP’s will often treat the public with contempt in order to hide their corruption practices or blatant incompetence.
Do you think Government should refrain from hiring outside tax advisers in order to create tax legislation or is this the only viable option consider the incompetence of Ministers and MPs? Please leave your comments below.