Patrick Harvie calls on @scotgov to end relationship with 'unethical' firms linked to Paradise Papers

Paradise Papers underline need to examine the use of public money on firms involved in tax avoidance, says Harvie.

THE SCOTTISH GOVERNMENT should withdraw support from accountancy firms involved in activities relating to tax avoidance, Scottish Greens co-convener Patrick Harvie has argued.

Following the release of the Paradise Papers and revelations in the BBC and the Guardian concerning the role of firms Deloitte and PwC in designing ownership structures for US private equity giant Blackstone for the purpose of avoiding tax, Patrick Harvie told CommonSpace: “I’ve longed argued for the Scottish Government to go much further with its Fair Work agenda, and rather than simply encouraging good business behaviour, it should withdraw support from those firms with unethical practices.

“The Paradise Papers revelations underline the need for Scottish ministers to examine how appropriate it is that significant sums of public money are given to firms whose bread and butter appears to be helping the wealthy exploit tax loopholes.” Scottish Green co-convener Patrick Harvie

“The Paradise Papers revelations underline the need for Scottish ministers to examine how appropriate it is that significant sums of public money are given to firms whose bread and butter appears to be helping the wealthy exploit tax loopholes.”

Following calls from CommonSpace’s associated think tank Common Weal for the Scottish Government to examine the appropriateness of giving contracts to accountancy firms supporting tax avoidance activities, and for Revenue Scotland to declare whether an investigation into the matter would take place, a Scottish Government spokesperson told CommonSpace: “The Scottish Government has taken a simple, clear but robust approach to tackling tax avoidance for the devolved taxes. 

“The Scottish General Anti-Avoidance Rule (GAAR) is wider than the corresponding UK rule and allows Revenue Scotland to take counteraction against tax avoidance arrangements.” Scottish Government spokesperson

“The Scottish General Anti-Avoidance Rule (GAAR) is wider than the corresponding UK rule and allows Revenue Scotland to take counteraction against tax avoidance arrangements which are considered to be artificial, even if they otherwise operate within the letter of the law.”

GAAR was also cited by Common Weal’s head of policy Ben Wray on Wednesday: “While the purchase of the St Enoch Centre took place in 2013 before powers over Stamp Duty were devolved to the Scottish Parliament, Revenue Scotland must investigate whether its General Anti-Avoidance Rule is or has been broken by the opaque ownership structures designed by Deloitte and PwC with the specific purpose of avoiding payment of tax, including LBTT which falls under the jurisdiction of Revenue Scotland.”

READ MORE: Investigate accountacy firms supporting tax avoidance in Scotland and suspend any new Scottish Government contracts

The issue was also addressed at Thursday’s First Minister Questions, when Christine Grahame, SNP MSP for Midlothian South, Tweeddale and Lauderdale and Deputy Presiding Officer, expressed her “disgust” at the scale of tax avoidance in Scotland.

First Minister Nicola Sturgeon reiterated the Scottish Government’s position, again referring to the GAAR, and also pointing out that under current constitutional arrangements, the Scottish Government and Revenue Scotland unable to tackle tax avoidance beyond the scope of those taxes that have been fully devolved: Land and Buildings Transaction and Scottish Landfill Tax.

Sturgeon continued, calling on the chamber to support further devolution of tax powers to the Scottish parliament and arguing that the UK Government’s inaction on the issue of tax avoidance was a matter of “regret and shame”.

“Scotland is now establishing its right to tax. And at exactly the same time as it is doing so we can see the forces of international capitalism lined up to undermine Scottish taxation.” Professor Richard Murphy

While tax is not fully devolved to Scotland, should any of the parties concerned with the purchase of the St Enoch Centre be found to have broken the GAAR, there would be no barrier to the Scottish Government taking appropriate legal action.

Offering comment in light of Common Weal’s statement on Wednesday, the tax justice campaigner and chartered accountant Professor Richard Murphy, tax justice campaigner and chartered accountant who has recently published a report on the role of the ‘big four’ accountancy firms facilitating tax avoidance, said: “Scotland is now establishing its right to tax.

“And at exactly the same time as it is doing so we can see the forces of international capitalism lined up to undermine Scottish taxation.

“This is no minor issue. The Paradise Papers show that Scotland has to fight for the right to tax against those who would deny it, and its people, that power.”

CORRECTION: An earlier version of this article suggested that both Deloitte and PwC were involved in the case of Blackstone and Glasgow's St Enoch Centre. Only Deloitte was involved in advising a tax structure to Blackstone concerning the St Enoch Centre, whereas PwC advised Blackstone on the property of Chiswick Park in London.

Picture courtesy of the National Union of Students Scotland

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Comments

borderscott

Fri, 11/10/2017 - 09:40

Including their well known Edinburgh lawyers who also handle Scotland's biggest landowner's nominee accounts in the sunny parts of the world

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