This is How You Screw Tax Avoiding Corporations

This is genius.
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Ben Cohen
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This is genius.
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In what could prove to be a completely revolutionary idea, family owned shops in a small town in Wales town have decided to play corporations at their own game.

The residents in Crickhowell (see photo above) are copying complicated offshore arrangements utilized by large global brands which pay virtually no corporation tax on their income. The participants are aiming to spread their novel idea throughout the nation in a bid to send a message to the government that continued tax avoidance by large corporations will now have meaningful repercussions.

A BBC documentary crew has been following the shop owners and will  screen their efforts next year (via the BBC website):

In the BBC documentary, the owners of a smokery, book shop, an optician, bakery, and an outdoor adventure clothing shop, came together to find out how they could learn the tricks of business giants such as Starbucks, which was recently told it must pay back millions of pounds after European tax breaks were ruled illegal.

Jo Carthew, who runs a coffee shop in the town, said: "Until now, these complicated offshore tricks have only been open to big companies who can afford the lawyers' fees.

"But we've put our heads together, and worked out a way to mimic these big tax dodgers. It's jolly clever."

The residents of the town have also released a video with the following message:

We're a small town in South Wales that has had enough of big multinationals avoiding paying their fair share of tax.

So our small independent businesses have come together to take drastic action, and go offshore ourselves!

Visit the website www.fairtaxtown.com, read more and sign the pledge

In a statement, an official HM Revenue and Customs stated that:

HMRC enforces the tax rules fairly across the board irrespective of the size or structure of the business, and we are always happy to give advice and support to taxpayers who want to play by the rules.

The government is clear that multinationals must pay their fair share of tax so it has introduced new legislation to prevent multinationals from diverting their UK profits from the UK tax system and has invested additional funding in HMRC to tackle abuse by multinationals.

This of course, is very far from the truth given multinational corporations employ thousands of lawyers to continually exploit loopholes in the tax code. While the conservative government has claimed it will be clamping down on this, the exact opposite is true given they have deliberately rigged the code to benefit large corporations with a shift in the tax code that will, as George Monbiot writes, become "The greatest transfer of wealth from the poor and middle to the ultra-rich that this country has seen in a century." To put it in perspective, Facebook paid £4,327 ($6,589) corporation tax in 2014. Yes, that's $6,589 from a company worth over $200 billion.

If small businesses manage to emulate the behavior of larger corporations and take advantage of rules designed to screw them, there could be serious upheaval in the UK with the government forced to act in order to prevent a catastrophic loss of revenue. The shop owners in Crickhowell are not opposed to paying taxes, but they are opposed to paying disproportionately more than their corporate counterparts. As their new slogan states:

“Either we all pay tax or none of us do”.

Amen to that.

Image via Totally Locally Crickhowell