Struggles, United Kingdom

Tax corporations, not the poor

This will be one of many calls reverberating through the streets of central London on January 15th, as protesters plan to demonstrate against the 2.5% increase in VAT. The event’s organisers UK Uncut plan to meet outside the Vodafone store at 350 Oxford Street at 1pm and move on to various other sites to spread their message.

Sofia Ahmad

They want to draw attention to the fact that while ordinary households will be hit by the increase in VAT, wealthy corporations continue to avoid paying tax amounting to billions of pounds.

In line with the Coalition’s continual cuts, they have increased VAT from 17.5% to 20%; a move that came into force on January 4th. They insist this is a necessary measure in order to “balance the books” in the tough economic climate. Officials hope it will raise an extra £13bn in tax and thus reduce the deficit between the government income and expenditure which is forecast to reach £155bn by 2011. The Centre for Retail Research has found that the VAT increase will cost the average household £425 a year, while the British Retail Consortium recently suggested it could cost up to 163,000 jobs.

UK Uncut argues that by increasing VAT and ignoring other tax avenues affecting the large corporations “it costs the rest of us money by shifting the burdens of tax, often onto those least able to pay.”

Further to this they point to a recent report published by HMRC, which identifies an estimated £6.9billion in unpaid corporation tax, while the body Tax Research UK has estimated the total tax gap to be at least £120billion. Moreover the coalition have provided yet more fuel to incense protestors as they have announced that the mainstream corporation tax rate, which applies to the profits of large companies, will fall from 28% to 24% over the next four years.

In a recent BBC Radio 4 programme, some of the worst corporate tax dodgers were exposed, including Boots who are allegedly legally cutting their tax bill from over £100 million a year to £14 million a year by relocating to a post office box in Switzerland.

UK Uncut is calling for everyone to join in the protest on the 15th of January. They want to know where the justice is in hitting the ordinary person with the burden of the economic crisis while the wealthy corporation’s avoid paying billions of pounds in taxes. To find out more about UK Uncut, the planned protest or to download and print banners you can visit their site at www.ukuncut.org.uk.

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