http://www.blogger.com/template-edit.g?blogID=27684744 ARTYFACTS: Artful Dodgers – creative industry, creative accountancy and tax evasion

Friday, June 22, 2012

Artful Dodgers – creative industry, creative accountancy and tax evasion

So some of the most prominent performers of the black art of tax dodging are those in our much lauded ‘creative industries’. Jimmy Carr has sought redemption through Twitter but the secret’s out. The whole rotten industry is rife with tax evasion. It’s endemic.
Let’s be clear here. The losses to the economy through these dodges are in the many billions. More importantly, paying tax is part of being a citizen, someone who recognises a fiscal and moral responsibility towards the community they live in, and earn a living from. These people are to be despised for playing the same game as those rich crooks in Greece, who see tax as optional. If tehre's a lesson to be learned fron Greece, it's that states that pander to this view become failed states.
Next time we hear a liberal platitude from a comedian, actor or filmmaker, let’s look for the Janus-face, of public virtue and private vice. Next time you pay to see one of these clowns, or watch a movie, ask whether the money you’ve paid is being salted away in Luxembourg, Jersey or Virgin isles. If you want to read how it's done, I recommend Treasure Island by Nicholas Shaxson. He uncovers these places, often under the British flag, where tax crime become indistinguishable from hard-core organised crime.
Film makers seem to be the biggest scam artists of the lot. Five senior RBS staff were arrested this year for using film tax relief schemes and the system is widely known in the system to have descended into activity that borders on (or simply is) crime. Film tax fraud is estimated in a Times article this week to amount to £5 billion a year, or around 1p on the standard rate of income tax. There are 600 schemes under inquiry from the HMRC as we speak. It’s become a racket for the rich, who invest, then pull out early or switch to Luxembourg company to avoid tax.
As for those wuderkinden from Amazon, Apple, Google and Facebook – cut the crap about doing no evil. Not paying tax is evil – get your headquarters out of Luxembourg. Then there’s the mobile phone industry with Vodaphone being among the worst tax offenders on the planet.
Meanwhile, Assange, who was well ahead of the game here, publishing the names and account details of tax evaders from Swiss banks, and sparked off some real political action on this front, has had his means of funding cut off from the major credit card companies, even Paypal. Unbelievably, Amazon refused to host the site.
On the whole, most of these industry sector tax relief schemes simply open the door for fraud. This is why we need to be wary of the recently announced tax relief schemes for TV production, animation and games. Let's not be fooled into thinking that the 'trickle-down' economy has worked. As tax writer David Johnston says, "A quarter century of tax cuts has not produced 'trickle-down' but 'Naigra -up'".

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