Collecting Tax is about Political Will – Part 2

In part 1 of this feature, Boots, Heathrow Airport and Manchester United were given as examples of tax avoidance. These companies were purchased with debt, and the debt was loaded onto the balance sheet of the company so that tax relief could be claimed on the interest paid. This tax avoidance is, in reality, the taxpayer paying part of the purchase price for buying the company, but getting none of the profits!! However, loading the company that has been bought with debt, and then offsetting the interest on the debt against tax, is quite benign compared with artificially creating debt…