Staying on the subject of Margaret Hodge’s hissy fit and in particular the evidence given to the Public Accounts Committee, by Edward Troup, HMRC’s Tax Assurance Commissioner and Jim Harra, the Director-General of Business Tax, there is a very important question that needs to be answered.
Margaret Hodge continued with her now familiar narrative of having a show trial or two for major companies who, in her eyes, don’t pay their ‘fair share’ of tax to the UK Exchequer – because despite trading here and generating impressive revenues a lot of the money is sent to another EU location in the form of transfer payments and the like. Hodge said to Harra:
It looks to me that you should be litigating. Why have you not chosen to litigate and test your powers? Why have you not litigated against one single internet company?
Make a few cases, a few show cases. It’s so bloody obvious.
Now, HMRC knows very well about the Thin Cap Group Litigation, with the subsequent European Court of Justice ruling on in March 2007, and how that makes Hodge’s demand impossible. It would therefore be pointless HMRC spending our money to pursue a case it already knows from case law there is no prospect of winning. So,
- Why did neither Harra nor Troup simply tell Hodge that European law allows what Google, Facebook, Amazon and Starbucks are doing?
- Why did they not explain to the committee that challenging the companies, in the way Hodge is demanding, falls foul of Article 63 of the Lisbon Treaty which declares that: “all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited”, and that: “all restrictions on payments between Member States and between Member States and third countries shall be prohibited”?
- What is it they are trying to conceal from the PAC, the media and the wider public through this refusal to state what the facts are, explaining that European law and treaties have primacy and have supplanted the UK’s tax sovereignty and that Westminster therefore does not have competence make the rules in these matters, thus putting an end to Hodge’s continuing witch hunt?
Something doesn’t smell right. It is such an open and shut matter that there has to be more to this than meets the eye. Surely it can’t just be a desire to divert attention away from the EU elephant in the room. Someone needs to call out HMRC on this so that the facts are aired in public in an open and transparent manner.
Then even the media might get curious and show more interest in this issue than repeating the ‘he said/she said’ exchanges, which leave people wondering why Parliament appears toothless, why no action is being taken by HMRC and why the corporates are continuing with their current tax arrangements within the EU.