rationalskepticism.org

Strontium Dog wrote:

THWOTH wrote:Personally, I would have preferred the Coalition had lived up to its promises on corporate tax and tax-dodging rather than looking at ways to undermine and downgrade the rights of employees and relaxing regulation in the labour market.

Er, banning use of exclusivity clauses strengthens employee rights.

And introducing fees for employment tribunals, which has seen a 79% drop in cases from 45710 Sep-Dec 2012 to 9801 in Sep-Dec 2013, has stopped many people from seeking, and get justice.

Strontium Dog wrote:And happily, government has found the time to close so many of those tax loopholes that proliferated under Labour too.

How many, and where?

The effectiveness of those suppose reforms is somewhat disputed, but what isn't disputed is that HMRC are currently investigating two-thirds of the UK's largest corporations, including multinationals, and many over multiple issues.

What also isn't disputed is that the Chancellor has cut the main rate of corporation tax five times over his tern from 28% to 20% and which is estimated to cost about £7.8 billion a year by 2016/17. In his first budget Osborne made much of the fact that a year-on-year cut in the main corporation tax rate would be paid for by reciprocal cuts in capital allowances, which as you know are measures that allow firms to offset capital costs against their profits, and he duly reduced Annual Investment Allowance from £100,000 to £25,000. However, in his 2012 budget the Chancellor responded to heavy lobbying by increasing that allowance to £250,000 from 1 January 2013, and now that rate has been doubled, to £500,000, until at least December 2015.

After a review of the Controlled Foreign Company rules the Coalition has opted to apply a 5.75% rate on multinationals stockpiling cash in non-trading entities abroad - a very low rate, and one a fair bit lower the much trailed and hinted at 8% rate during the review. Conservative estimates put the cost the exchequer of this at £840m year-on-year compared to the previous system. The government have done nothing address tax-free profits on share dividends either. These are just examples, but I think it gives a fair impression of where the Coalition's economic interests lie.

The government is engineering a hole in the nation's finances and presiding over a rising corporate tax gap (c.£4.1bn from total receipts of c.£42bn for 2011, HMRC) at the same time as proudly boasting that the UK is fast becoming an environment with the lowest corporate tax regime of any G8 country.

Institute of Fiscal Studies, 2013 wrote:Corporate tax revenues fell sharply in the recession. Receipts were lower in 2011-12 than previously expected and they are not forecast to rise again until 2016-17. This is the result of a combination of discretionary cuts to the main tax rate and weak expected growth in taxable profits. By 2017-18, revenues are forecast to be at their lowest level as a share of national income and total receipts since 1984-85.

There has been renewed attention on corporate tax avoidance. The UK attempts to tax profits that are created in the UK. These can be hard to measure and firms have an incentive to manipulate ‘UK profit’ to avoid tax. How much is lost to corporate tax avoidance is not known.

Not only that but Mr Cameron pledged (we don't say 'promised' any more do we?) in this autumn's party conference speech to raise the threshold on the 40p income tax rate to £50,000 as well as raising the income tax threshold itself to £15,000 iff he wins power at the next election - which the IFS estimate will cost the UK a further £7.5bn a year.

I don't think banning exclusivity clauses in ZHC is going to achieve very much in the way of an overall benefit to Britain in the face of this kind of thing - other than perhaps encouraging more employers to further erode the balance of employment rights by downgrading the status of many positions from 'employee' to 'worker'.



http://www.bbc.co.uk/news/uk-politics-29433919
http://www.parliament.uk/briefing-papers/SN05945.pdf
https://www.gov.uk/government/news/hmrc ... g-business
http://www.ifs.org.uk/budgets/gb2013/GB2013_Ch10.pdf