Apple's Tax-Avoiding Brand Image Is In Tatters, Again

Fuming doesn't even cover it. Take it from me. If you're not in the UK right now listening to how people are talking about tax avoiders like Apple, you'll have no idea how fed up the average citizen is with the US tech giants, and others who dodge their fair share of tax.

Last night's excellent Panorama programme was a surprise to many, but not me. Regular readers will know how much I despise Apple, Google and Facebook (to name the biggest three) for seeking ever-more elaborate ways to not play the tax game with a straight bat. Now, let's be crystal clear. Nobody is accusing the tech giants of breaking laws. The problem is that the laws are so crazily drawn up that a smart lawyer and accountant can drive a coach and horses through legislation to help the super-rich avoid tax. The authorities appear powerless. It takes a massive hack of secret documents before the public are made aware of just how unfair the system is.

The trick always seemed to be set up a company in an offshore tax haven and then pay yourself tax-free sums through loans that were, not surprisingly, not paid back. Last night's programme showed that another tactic is to not own a thing. Instead, all assets are put offshore and then people elect themselves to be the fund managers for what were previously their assets. They then issue a bunch of instructions to the fund to buy fancy houses, yachts and watches that they never own -- that the offshore funds owns -- so no tax is due. 

In the case of Apple, the finer details of how they go about their accounting was not made clear. However, the real revelation was that, as the BBC reports, Apple held a beauty parade of offshore tax havens once the whistle was blown in 2013 on its Irish fiscal arrangements which the tech giants was constantly refusing to admit was a "sweetheart deal." The BBC estimates the arrangements led to single digit corporation tax of between 2% to 5% and in one case led to a rate of 0.005%. 

The EU is now on to Apple's ruse and has asked the Irish government to demand €13bn in back taxes. The result? The BBC has chronicled the questions Apple was asking of offshore tax havens related to how they would handle the tech giants' $250bn offshore funds. These pretty much amounted to assurances that tax rates were virtually negligible and that the people signing the deal with them were likely to remain in power unopposed. The Channel Islands won the contest. 

Cue Tim Cook being quoted as saying they pay every dollar of tax they owe and a change in arrangements did not impact how much tax they paid. The choice of dollars is very interesting. They can't get away with the half of their income they earning in their homeland as they can outside. Not affecting tax levels is hardly a surprise, is it? If you've done everything to pay a negligible rate in the first place, changing those arrangements to carry on in that vein is hardly likely to have an impact. Apple's move was about protecting what it had. This was a means of holding onto its money and avoiding paying its way. Continuing this would always just see more of the same with no major move up or down on its negligible tax bill.

Mark these words -- people are very angry at billionaires who do everything they can to avoid paying the tax us normal people and businesses pay to fund hospitals and schools. And consider this. It's perhaps a long shot, but the current harassment claims circulating Westminster could lead to a handful of by-elections. If these influence the Tory "majority" bought with a billion-pound payment to Northern Ireland's DUP, then we could be in sight of another election within a year, because there are always a handful of by-elections held annually -- but add a scandal and you can imagine that hitting double figures.

As I say, it's only a long shot -- but if it were to happen, the Government will feel the wrath of people fed up with words and no action against Apple and the other tax avoiders. Jeremy Corbyn need only make this a pledge, alongside free trade with the EU and then repeat his commitment to free university education and the Labour party will sweep into power. 

The ball is in the Government's court. Failing to act will only add to the belief the Tories look after their rich pals to the detriment of the average person in the street. 

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